The reserve price at a Queensland auction: who sets it, who hears it

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Kooky

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

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Every auction turns on a number that almost nobody present is allowed to know. The reserve price decides whether the hammer can fall, whether the seller's own bids are still permitted, and the exact moment a crowd on a front lawn stops watching a negotiation and starts watching a sale. It is also the number that produces the most confusion, because bidders hear phrases such as "on the market" without being told what has just changed.

Queensland regulates the reserve more closely than most people expect. The rules sit in the Property Occupations Act 2014 and the Property Occupations Regulation 2014, and the Office of Fair Trading explains them on the Queensland Government's pages for auctioneers, sellers and buyers. This guide follows the reserve from the first conversation between seller and auctioneer to the fall of the hammer: who chooses it, what the auctioneer must do before recommending one, where it is written down, what may be said about it in public, and what happens on either side of it. It describes the general rules. How they apply to a particular sale depends on the appointment and the contract for that sale.

Office of Fair Trading, "Auctioning a property", Queensland Government, page updated 1 July 2026.

What a reserve price is

The Queensland Government's page on selling by auction describes the reserve as the minimum price the seller is prepared to accept. It works as a floor. Below it, the seller is not obliged to sell to anyone, whatever the size of the crowd or the enthusiasm of the bidding. At it or above it, the position reverses: the seller must accept the highest bid.

That second half is the part sellers sometimes overlook. A reserve is not an asking price and not a hope. It is a promise, made in advance, that a bid at that level will be taken. The government's guidance for sellers puts it plainly: once bidding passes the reserve, the highest bid must be accepted as the sale price, and seller and buyer sign the contract straight away.

The reserve should not be confused with three other figures that circulate around an auction. The agent's appraisal is an opinion of what the property might fetch. The seller's hoped-for price is whatever the owner would be delighted to get. The opening bid is simply where the bidding starts. The reserve is the only one of the four with legal consequences.

The seller sets it, and the auctioneer has to ask

The reserve belongs to the seller. The Queensland Government's guidance says the owner sets it, with the agent's help, and that it must be put in writing. The agent or auctioneer can recommend a figure. They cannot impose one.

The auctioneer cannot stay silent on the subject either. According to the Office of Fair Trading's page on auctioning a property, the auctioneer must ask the seller whether they want to set a reserve. The question is a legal duty, not a courtesy. The same page gives the consequence of a seller's refusal: the auctioneer must then tell the seller in writing that they will be obliged to accept the highest bid.

Failing to do so is an offence. The Office of Fair Trading's page, as updated on 1 July 2026, puts the maximum penalty at $34,540.

Behind this sits a broader rule in the Property Occupations Regulation 2014, whose conduct provisions require a property agent to act in line with the client's written instructions on the price and terms of a sale. The Regulation gives the example of an agent who markets a property at a price or on terms other than those the client authorised. Applied to an auction, the instruction that matters most is the reserve: it is the seller's figure, and the auctioneer works to it.

The market evidence behind a recommendation

Sellers rarely arrive with a reserve already in mind. Most ask the person they have appointed what the figure ought to be, and Queensland law attaches a condition to the answer.

Before recommending a reserve, the Office of Fair Trading says, the auctioneer must give the seller either a comparative market analysis or a written explanation of how the market value was assessed. A comparative market analysis, usually shortened to CMA, is a document that sets the property beside others that have sold. To count, it must compare at least three properties that are similar to the one being auctioned, that sold within 5 kilometres of it, and that sold within the previous six months.

Those three tests are easy to meet in a suburb of similar houses and hard to meet for an unusual property or a thinly traded district. The rules allow for that. Where three such sales cannot be found, the auctioneer must instead give the seller written advice on the market value, together with the reasoning behind it.

The effect is that a recommended reserve always comes with paper. A seller is entitled to see what the suggestion rests on, in a form they can keep, check against their own knowledge of the street and show to someone else. The decision stays theirs. The CMA is evidence for it, not a substitute.

A CMA is prepared for the seller, not for the public. The Office of Fair Trading says it may be given to potential bidders only if the seller agrees in writing.

Selling without a reserve

A seller may decline to set a reserve at all. It is lawful, and it is the riskiest way to run an auction.

The government's page for sellers spells out the consequence in a bracket that is worth reading twice: the highest bid must be accepted even if it is well below the seller's expectations. It adds that the agent must formally caution the seller against proceeding this way.

With no reserve, two protections vanish together. The seller loses the right to walk away from a low bid. And because seller bids are allowed only up to the reserve, a sale with no reserve leaves no room for them.

Where the reserve is written down

The reserve exists on paper before auction day, and not only in the seller's instructions. The Property Occupations Regulation 2014 requires an auctioneer to keep an auction contract book at their registered office. Before an auction, the auctioneer must enter the details of the property and its owner, the reserve price, any special conditions and the proposed date, time and place of the sale.

The book is completed afterwards. Once the auction is over, the auctioneer records the date of sale and a description of the property, with the buyer's details if it sold. If it did not sell, the entry is the highest bid. The Regulation sets a maximum of 10 penalty units for a breach of these record-keeping duties.

The requirement matters for a simple reason. Because the reserve is recorded before the first bid is called, there is a dated record of what the seller had agreed to accept. If anyone later asks whether a seller bid was made above the reserve, or whether the property was truly on the market when the auctioneer said so, the book supplies one half of the answer and the record of bids supplies the other.

What bidders may and may not be told

The reserve is confidential, and so is almost every other indication of price. This is the area where the wording of the official guidance repays care.

On the reserve itself, the Queensland Government's page for buyers says the auctioneer is allowed to tell bidders whether or not the seller has set a reserve, but must not tell them the figure. The Office of Fair Trading's page for auctioneers says the same thing from the other side: the reserve must not be disclosed, though acknowledging that one exists is permitted. The government's older page for sellers, last updated in October 2020, is worded more tightly and says the auctioneer must not indicate whether a reserve has been set. The two more recent pages agree with each other, and both allow the existence of a reserve to be acknowledged.

Price guides are banned outright. The buyer page states that it is illegal for a seller or their agent to give a price guide for an auction property. The Office of Fair Trading explains the reasoning: a guide may mislead consumers when the final price turns out to be very different. This is why a Queensland auction listing carries no figure, and why an agent asked "what do you think it will go for?" before an auction should decline to name one.

There is one technical allowance. An auctioneer may supply a price to an online listing site purely so that the site can sort the property into search brackets. The condition is that the site shows a set statement saying the property is being sold by auction or without a price, and that a price guide therefore cannot be provided.

During the auction, the Office of Fair Trading adds, the auctioneer must not disclose an estimate of the property's value either. What a bidder can lawfully see, if the seller consents in writing, is the comparative market analysis: a list of recent nearby sales from which they can draw their own conclusion.

Seller bids stop at the reserve

The reserve also marks the limit of the one kind of bid that does not come from a buyer.

Queensland allows the seller to bid at their own auction. The government's page for sellers describes the auctioneer accepting bids from the seller to raise the price, and such a bid is commonly called a vendor bid. The Property Occupations Regulation 2014 attaches two conditions. If the seller, or someone acting for the seller, makes a bid, the auctioneer must disclose that fact to the other bidders. And the auctioneer cannot accept a bid from the seller's side that is above the reserve.

The Office of Fair Trading's summary is that vendor bids are permitted only up to the reserve and must be publicly disclosed each time. The disclosure is the safeguard. Everyone in the crowd hears that the bid just called came from the seller, and can treat it as information about where the seller wants the price to be, not as evidence of another buyer.

A seller bid that is not announced, or one made once the reserve has been passed, is on the wrong side of the line. The government's buyer page uses the term false bid for a seller bid above the reserve, and describes dummy bids, made by the seller, an associate or someone planted in the crowd to push the price up artificially, as illegal.

The Regulation's bidders register supports the same aim. The auctioneer must tell prospective bidders that only registered bidders will be accepted, record each one's name and address with satisfactory evidence of identity, give each a unique identifier such as a numbered card, and keep the register for at least five years. Every genuine bid therefore traces back to an identified person.

What "on the market" means

The phrase is the public sign of a private fact. The Office of Fair Trading defines it this way: once bidding meets or exceeds the reserve, the property is on the market, vendor bids cease, and the seller must accept the highest bid.

Three things therefore change at the same instant.

1. The seller can no longer refuse. Whoever holds the highest bid when the hammer falls is the buyer.
2. The seller's side can no longer bid. From here every bid is a buyer's.
3. The bidder who is in front is committed. If nobody goes higher, they have bought the property, with no cooling-off period.

An auctioneer who announces that the property is on the market is telling the crowd that the bidding has reached the seller's figure, without ever stating the figure itself. Bidders can work out that the reserve lies at or below the last bid. They cannot tell how far below.

That announcement matters to buyers for a reason set out on the government's buyer page: there is no cooling-off period when buying at auction. A successful bidder cannot withdraw because of an inspection result, a finance problem or a change of heart, and must sign the contract immediately. The auctioneer announces the deposit required and how it may be paid as part of the conditions of sale.

A worked example

The figures below are illustrative and are not market data. Assume a seller has set a reserve of $900,000 in writing, that two bidders have registered and been given cards 7 and 12.

The opening bid sits $120,000 under the reserve, and nothing obliges the seller to sell at any of the first four calls. The vendor bid at $850,000 is lawful because it is below $900,000 and because the auctioneer says aloud that it is the seller's. When card 7 bids $900,000 the reserve is met. From that call the auctioneer could not accept another bid from the seller's side, and the seller is bound to take the best bid on the floor. Card 12's bid of $905,000, which is $5,000 above the reserve, buys the property.

Change one line and the outcome changes entirely. Had the bidding stopped at card 12's $870,000, the property would have finished $30,000 short of the reserve and the seller would have been free to decline.

When bidding stops short of the reserve

If the highest bid is below the reserve, the property is passed in and no sale takes place under the hammer. The seller's guidance on the Queensland Government site says the owner does not have to sell, and may choose to enter into negotiations with a bidder.

Those negotiations happen under different rules from the auction. The reserve no longer binds anyone: the seller can accept less than the figure they set, hold out for it, or ask for more. Whatever is agreed becomes an ordinary contract, with one feature carried over from the auction. The government's buyer page says the absence of a cooling-off period also applies to a private treaty purchase made within two business days of an unsuccessful auction, where the buyer was a registered bidder. After that window, the cooling-off period applies as it would to any other sale.

The Regulation's confidentiality rule bends slightly here. An auctioneer must not disclose who the bidders are, except to an inspector or a court, but may identify a bidder to the seller or the seller's agent where that is needed to negotiate after the auction or to complete the sale.

Can the reserve change before the hammer?

This is the question sellers ask most often on auction morning, and it is the one the official guidance answers least directly. None of the three Queensland Government pages read for this guide describes a procedure for raising or lowering a reserve once it has been set.

What the sources do establish is the framework around the question. The reserve is the seller's decision. It must be in writing. The auctioneer must act on the client's written instructions about price. The reserve is entered in the auction contract book before the auction. And the auctioneer may not accept a seller bid above the reserve, nor refuse the highest bid once the reserve has been met.

Two conclusions follow from those rules without stretching them. First, any change to a reserve is the seller's instruction, and the law's insistence on writing, both for the reserve and for instructions on price, points to a change being recorded in writing as well. Second, there is a point after which the question no longer arises: once a bid has met the reserve the seller set, the seller is bound to accept the highest bid, so a reserve cannot be lifted to escape a bid that has already reached it.

The wording that governs a particular sale is in the seller's appointment of the auctioneer and in the conditions of sale announced at the start. A seller who wants the freedom to adjust the figure during the auction, and a bidder who wants to know how the conditions deal with seller bids and disputed bids, will find the answer in those documents and not in a general guide.

The reserve is the one price at an auction that is never spoken, and the one that decides everything spoken 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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