After the hammer falls in Queensland: contract, deposit and settlement

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Most of what is written about auctions stops when the hammer comes down. For the person holding the winning paddle, that is the moment the real obligations start. Within minutes there is a contract to sign and a deposit to pay, and none of the usual escape routes of a private sale are available. A few weeks later the balance of the price is due, whether or not the buyer's plans have gone the way they hoped.

This guide follows a Queensland auction purchase from the fall of the hammer to settlement day. It covers what the buyer signs and when, why there is no cooling-off period and usually no conditions, how the deposit is asked for and paid, what the seller must have disclosed before the bidding ended, what the Queensland Government says can happen to a buyer who does not settle, and the identity checks that agents now carry out under federal anti-money-laundering law. It draws on the Queensland Government's published guidance for auction buyers, the Office of Fair Trading's page on cooling-off, the government's page on the seller disclosure scheme, and AUSTRAC's guidance for the real estate sector.

It is a description of the general rules. The contract for a particular property sets the terms that bind that sale, and a solicitor or conveyancer is the person to read it.

Queensland Government guidance on buying at auction and on cooling-off periods; AUSTRAC guidance on delayed initial customer due diligence for real estate.

The contract is signed on the spot

The Queensland Government's guidance for auction buyers puts it in one sentence: a successful bidder must sign a contract immediately. There is no taking the document home, no overnight read and no week to think about it.

The sale itself is made in the bidding. The same guidance explains that the seller sets a reserve price, which is the lowest price the seller will accept. Once bidding reaches the reserve, or if there is no reserve, the property is on the market, and the highest bid from that point buys it. The contract signed afterwards records a sale that has already happened. It is not an offer the buyer can still withdraw.

This is why the government's advice puts so much weight on the days before the auction. Its list of preparation for bidders includes getting a copy of the contract in advance and seeking legal advice on its terms and conditions. A buyer who reads the contract for the first time at the signing table is reading something that can no longer be negotiated.

The general page on contracts of sale adds a useful reminder of what the document contains: the price, when the deposit is to be paid and when settlement will take place. In a private sale those three things are negotiated between the parties. At auction the price is set by the last bid, and the other terms are the ones the seller offered the property on.

No cooling-off period, and one exception buyers miss

In an ordinary residential sale in Queensland, the buyer has a cooling-off period of five business days. The Office of Fair Trading's guidance explains how it works: the period starts when the buyer receives the contract signed by both parties, it ends at 5pm on the fifth business day, and a buyer who cancels within it gets the deposit back, less a penalty of up to 0.25 per cent of the purchase price that the seller may keep.

None of that applies to a home bought at auction. The Queensland Government's auction guidance says so directly: there is no cooling-off period for buying at auction.

The Office of Fair Trading lists a second case that catches people out. The cooling-off period also does not apply to a private treaty contract signed within two business days after an unsuccessful auction, when the buyer was a registered bidder at that auction. A registered bidder who negotiates for a passed-in property on the Saturday afternoon, or on the Monday, is therefore in the same position as someone who bought under the hammer. Someone who was not registered to bid, and signs a contract for the same property in the same two days, is not caught by that exception.

Unconditional usually means exactly that

The second difference from a private sale is the absence of conditions. The Queensland Government's page on contracts of sale describes the conditions a private buyer commonly asks for: approval of finance, a satisfactory building inspection, or the sale of the buyer's current home. If a condition is not met, a contract made subject to it can come to an end.

At auction, the government's guidance says, the terms of sale usually require bidding on an unconditional basis. A winning bidder cannot later rely on a loan that was refused, an inspection that turned up a problem or a change of mind. The same guidance says a successful bidder must complete the purchase regardless.

The word "usually" matters. The terms of an auction are set by the seller, and a buyer who needs something different has to raise it with the agent before the auction, not after it. Whatever was agreed beforehand is what the buyer signs.

The deposit: how much, and in what form

The deposit is paid at the signing. The Queensland Government's guidance does not fix an amount. It tells buyers to ask the agent before the auction how much deposit will be asked for, expressed as a percentage of the winning bid, and how it will need to be paid.

On the form of payment, the guidance says that a personal cheque, a bank cheque or a deposit bond is usually acceptable. It leaves the final word to the agent and the seller, which is why the question belongs on the list of things to settle before auction day. A bidder who arrives without an accepted means of paying the deposit has a problem that begins the moment the bidding ends.

Because the deposit is a percentage of a price nobody knows until the last bid, buyers generally work it out at their own limit. As a worked example only, a deposit of 10 per cent on a winning bid of $900,000 would be $90,000; at 5 per cent it would be $45,000. Those percentages are illustrations, not a Queensland rule. The figure that applies is the one in the terms of the auction.

The general contract page makes a related point about private sales that helps explain the auction position. A part deposit handed over with an offer does not secure a property, because the seller can still refuse the offer. At auction there is no such stage. The deposit is paid on a contract that already binds both sides.

What a buyer should have checked before bidding

Everything a private buyer would normally do during a finance or inspection period has to be done before the auction. The Queensland Government's guidance sets out the preparation in two groups.

The first is about the buyer's own position:

1. Inspect the property.
2. Arrange finance.
3. Obtain a valuation.
4. Research the market.
5. Get a copy of the contract.
6. Seek legal advice on its terms and conditions.

The second is about the property. The guidance names a title search, building and pest inspections, a land tax clearance search and, where there is a swimming pool, a pool inspection. The Office of Fair Trading also publishes a residential property auction bidder checklist for the purpose.

One piece of information buyers cannot get is a price guide. The government's guidance states that it is illegal for a seller or the seller's agent to give a price guide for an auction property, although a comparative market analysis may be provided if the seller approves. Budgeting for an auction therefore rests on the buyer's own research and valuation, and the budget has to hold the deposit, the balance and the costs of buying.

The cost of these checks is spent whether or not the buyer wins. That is one of the real differences between the two methods of sale, and it falls on every serious bidder, not only the successful one.

What the seller must disclose before the hammer

Since 1 August 2025, Queensland has had a mandatory seller disclosure scheme under the Property Law Act 2023. The Queensland Government's page on the scheme says it applies to sales of residential property, commercial property and vacant land, and that the seller must give the buyer key information about the property before the contract is signed.

For a private sale, that means before the buyer signs. For an auction, the government's page describes the disclosure as being available before the hammer falls. A bidder should therefore expect to see the disclosure statement and its certificates among the auction documents, and has good reason to ask for them early.

The statement has four parts, and it is as important to know what it leaves out as what it contains.

The exclusions are the reason the government's pre-auction list still includes building and pest inspections. The disclosure statement tells a buyer about the title, the planning position and certain notices. It does not say whether the house is sound or whether the street has flooded.

The scheme also gives the buyer a right that survives the lack of cooling-off. According to the Queensland Government's page, a buyer may be able to terminate the contract if the seller did not give the disclosure at all, or if the information was inaccurate or incomplete. In the second case the buyer must show that the matter was material, that the buyer was not aware of it, and that the buyer would not have signed had it been disclosed correctly. That is a demanding test, and whether it is met in a given sale is a legal question.

There are exceptions to the scheme. The government's page lists sales to the State or a government body, to a listed corporation or to a party related to the seller, and sales above $10 million where the buyer waives disclosure.

Identity checks under the anti-money-laundering rules

Since 1 July 2026, real estate businesses have had obligations under the federal Anti-Money Laundering and Counter-Terrorism Financing Act 2006, which is administered by AUSTRAC. For an auction buyer, the practical consequence is an identity check by the agency that sold the property.

AUSTRAC's guidance for the sector explains why the buyer is involved even though the agent works for the seller. When a business brokers the sale of real estate, both the seller and the buyer are its customers for the purposes of the law. A seller's agent begins providing a regulated service to the seller when the agency agreement is signed, and to the buyer when it is reasonably expected that the transaction will proceed.

The ordinary rule is that an agent must complete the steps to know a customer before starting to provide the service. Auctions do not fit that neatly, and AUSTRAC says so. Its guidance notes that when real estate is sold at auction, the buyer may only be known after the fall of the hammer, and that the short time between the end of the auction and the signing of the contract will often not be enough to complete the checks. In that situation the agent may delay them.

The delay has conditions and a deadline. AUSTRAC's page on delayed initial customer due diligence says a business may delay only where that is essential to avoid interrupting the ordinary course of business and where the additional risk is low. For real estate, the check on the party the agent is not acting for must then be completed within 28 days after the exchange of contracts, or at least three days before the day first agreed for settlement, whichever comes first. AUSTRAC adds that civil penalties may apply to a business that does not verify the information in time.

What will the buyer be asked for? AUSTRAC's guidance on individual customers says a business could collect the person's full name, any other names the person is commonly known by, date of birth and residential address. Identity can be verified with a primary photographic document such as a current driver's licence or passport, or with a non-photographic document such as a birth or citizenship certificate together with a second document showing name and address. The business must also confirm that the person matches the document, in person, by video call or with biometric matching.

Where someone bids or signs for another person, AUSTRAC says the business must establish the identity of the representative and their authority to act, which may be shown by a document such as a power of attorney. A buyer purchasing through a company or a trust should expect further questions; those cases are outside the scope of this guide.

The seller is checked as well, and earlier. AUSTRAC's guidance says the agent must complete the checks on the party it acts for before it starts providing the service.

From signing to settlement, in order

Put together, the sources describe a sequence with very little slack in it.

The settlement date is one of the terms the Queensland Government says every contract of sale contains. It is in the contract the buyer was able to obtain before the auction, which is one more reason to read that document in advance and to show it to whoever will be handling the conveyancing and the loan.

Between signing and settlement, the work is mostly done by others: the buyer's solicitor or conveyancer, the lender, and the seller's representatives. The buyer's part is to answer their requests promptly, including the agent's request for identity documents, because each of those steps has to be finished before the date in the contract.

If the buyer cannot settle

The Queensland Government's guidance is blunt about what a winning bidder takes on. It says a buyer may be forced to pay:

• the amount of the winning bid, regardless of whether the buyer had access to the money;
• the cost of re-auctioning the property;
• any shortfall between the buyer's offer and the winning bid at the next auction.

In plain terms, a buyer who walks away can be held to the price, and if the seller sells again for less, can be asked to make up the difference along with the cost of selling a second time. The guidance does not describe these as automatic. What a seller can recover in a particular case depends on the contract and on what happens next, and that is a matter for legal advice on both sides.

The list explains the tone of the rest of the government's advice. Arranging finance comes before the auction because a refusal afterwards does not release the buyer. Inspections come before the auction because their results cannot be used to end the contract. Setting a budget comes before the auction because the last bid is a debt.

At a Queensland auction the thinking time comes first. After the hammer, the buyer's remaining decisions have already been made.

For sellers and agents, the same rules are what make an auction sale dependable: a signed, unconditional contract and a deposit on the day. For buyers, they are the reason the weeks before the auction matter more than the minutes after it.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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