Should I Sell My House By Auction

July 2022 - If selling a house at auction either on-site or in agency auction rooms, it pays to be aware of the process up front so get prepared.

Before agreeing on an auction as a method of sale, you should be aware of the company auction success rates 'under the hammer' and the days to follow (which is common), what auction fees will cost, what the pros and cons are, how to set a reserve sale price, what the rules for bidding on the day are and campaign timeframes.

Scroll to view auction pros and cons.


Selling a house at auction very much depends on your property type and location; your real estate agent's competence and consideration of other factors impacting the effectiveness of the auction process and your sale price.

For example, if there are fewer buyers in the market, how will your real estate agent reach the serious buyers? Do you need to target overseas buyers and therefore need an internationally focused real estate agent.

There are many questions to ask a real estate agent that are often overlooked such as their auction success rates.

House auctions are designed to create buyer competition but in 2022 the percentage of properties selling under the hammer has reduced with fewer bidders and often only one. But for some vendors, auctions can still be the favoured option depending on your location, the type of property you are selling and the valuation, so don't discount selling a house at auction altogether. Just be informed.

There are other methods of sale available if selling your house by auction is not your preference such as tender, deadline sale, by negotiation and buyer enquiry over. Real estate agents are obliged to explain these all to you at the point of presenting their property appraisal and prior to signing an agency agreement to list your property for sale.

Scrutinising real estate appraisals is all part of the process so we have produced a checklist list here that you can use to help with this.

If you need help to compare licensed real estate agents who have been vetted, Agent Finder NZ can provide you a list of vetted agents all at no cost. Find out more about this.


Besides real estate commission fees and advertising costs, there is also the auctioneer’s fee.

The cost of selling a house at auction varies but can range from $400 and $1200 (for the auctioneer). Some real estate companies don't charge an auction fee at all.

Prior to signing any agency agreement to list your property, all real estate fees should be itemised and approved by you - no surprises.

Get an indication of your likely real estate commission and fees here.

Selling a house at auction

The outcome of a house auction is wholly dependent on a real estate company's quality systems and agent competence. Find out how to compare agents and real estate appraisals objectively.


The success of selling a house at auction is heavily reliant on your choice of real estate agent and company, the auctioneer, their experience, competence and ability to guide you through the auction process with integrity.

Live Auctions More Common

Many auctions are done live online using video calls or other platforms which has resulted in many properties being sold site-unseen by ex-pats returning to New Zealand to live or people living out of the district and unable to travel.

Reliable Communication

Property auctions can be stressful and disconcerting so good communication by your real estate agent needs to be present throughout, from the time you sign an agreement to list to having a game plan in place if the property is passed in at the auction right through to settlement.

Buyer engagement

Real estate agents may work with several buyers from near or far who have registered interest, making sure they are prepared and keeping them engaged through to auction day. Agents should give you regular updates about buyers including post-viewings.

Fostering buyer competition

In the advent of a pre-auction offer, real estate agents should skillfully use it to foster competition among the other buyers.

Confident negotiator if passed in

Often vendors end up in negotiations with a buyer post auction after the property is passed in when the reserve price had not been met. Your real estate agent needs to be a confident negotiator, especially important for selling top end homes where hundreds of thousands of dollars can be at stake.

Scroll down to learn about time frames, pre-auction offers, pros and cons and more tips about the auction process.

Sell Home By Auction


  • Pressure to auction: People can feel pressured by a real estate agent to sell by auction. Agents are required to explain all methods of sale and most will make a recommendation.
  • Pre-Auction offers: Buyers can make an offer before the auction if the vendor wants this. However, this should be indicated in the advertising, for instance “unless sold prior.”
  • Sole Agency: Sole agency agreements are best for auctions.
  • Price Range: Have a price range in mind – your best-case scenario, your still acceptable price and the price that might not thrill you but you’ll take it. Keep it close to your chest.
  • Change of mind: If you decide not to auction your house, you can change your mind but best to do so prior to commencing any advertising. You may have to cover any costs if you back out too late. If you have already signed an agency agreement you should also make any changes in writing for both parties to amend the method of sale and re-sign. Make sure you keep a signed copy.
  • Phone bidding: Bids can be phoned in and buyers tend to be more comfortable with this than prior to Covid which was predominantly in-house.
  • Bid Increases: The auctioneer can set the amount by which bids should increase.
  • Post auction negotiation: If the property doesn’t sell at auction a sale price can be negotiated afterwards.
Sell My House At Auction


Marketing timeframe: Properties are advertised on average for 3-6 weeks before auction day. This is usually determined by the property type you are selling such as a luxury home you are wanting to attract international buyers for, a lifestyle block or a development-zoned property in Auckland.

The most common timeframe for marketing a residential property is around four weeks.

Auction day brought forward: If you receive a pre-auction offer and are happy with it, the auction day can be brought forward. Such an offer would become the new reserve price and becomes the first bid at auction.

Auction cancellation: House auctions can be cancelled if a sale and purchase agreement is signed following a pre-auction offer.

Auction day final bid: Buyers may arrive early to look through the property again. The auction starts when the auctioneer calls for an opening bid and ends with the ‘Call Down’ in which the auctioneer will generally offer the property to the highest bidder three times. The auctioneer calls ‘for the third and final time’ and then announces that the property is ‘SOLD’.

People can bid at any time during the call down.

Negotiation bid: If the property fails to sell it is “passed in”. The sale can continue through negotiation with a buyer either on the day or in the following days with many sales completed within 24-48 hours.

Should I Sell My Home By Auction


Heightened marketing: The success of your auction can be largely dependent on how strong your marketing campaign is. Your real estate agent should talk to you in detail about the marketing plan before it goes live.

Valuation: Getting a full valuation by a registered property valuer can be helpful to both you in knowing what the reserve price should be and to the auctioneer for guidance on auction day.

Open homes or private viewings: 2-3 open home days are held to help market your home. If you prefer private viewings over open homes, discuss and agree your preference with your real estate agent prior to signing off your marketing plan.

Managing buyer interest: Prospective buyers usually register their interest with your real estate agent and receive a property auction pack which covers property marketing information along with the sale and purchase agreement and terms and conditions.

The sale and purchase contract: There are special sale and purchase agreements for selling by auction.

Communication: Prior to auction day, your real estate agent should be in regular contact, keeping you up to date with buyer interest, any issues and the state of the property market.

Due diligence: Intending bidders do their due diligence before auction day including building inspections and finance approval. A real estate agent should help guide them to do this and on time.

The reserve price: The reserve price is usually set just before auction day. It is kept confidential between yourself, your agent and your auctioneer. We recommend you have a support person with you when setting the reserve and to advise your property lawyer.

The auctioneer: Auctioneers should be introduced to you and your property, understand its features and know how much buyer interest there is. They will want to know about things like building inspections and water tightness and should discuss the reserve price with you prior to the auction.

Auction day: If you can, you should attend the auction to answer any last minute questions on things like variations to the settlement date and the deposit amount. The auctioneer may want to consult with you on your wishes if bidding stops before the reserve. You have options such as lowering the reserve.

Vendor bids: The auctioneer can use vendor bidding to start the auction or get movement toward the reserve price. These can be made either by the auctioneer or real estate agent. They must be clearly identified as vendor bids by the auctioneer and are only allowed if the property has a reserve price and that hasn’t yet been reached. For more information see the legal section below.


Sell A House At Auction

Pros of selling your house by auction

  • Buyer attraction: Some say they attract more buyers because people aren’t put off by an asking price.
  • Bidding wars: Auctions can achieve great prices due to excitement, competition and bidding wars.
  • Maximum offers: Buyers are thinking about the maximum they can afford to bid rather than how low they can negotiate the price.
  • Focussed buyers: High profile advertising and the fixed term can focus buyers on the property.
  • The reserve: Buyers don’t know your reserve.
  • Conditions free: Buyers cannot make conditional offers so the sales contract is not subject to inspections or finance, however they can approach you to vary the terms of the auction or the settlement date. Lack of conditions saves time, work and money.
  • Sale completion: The winning bidder must complete the sale as it is legally binding.
  • No pressure to sell: If the property gets lower than expected bids the reserve price protects you.
  • Fast: Auctions are one of the quickest ways to sell a property.
  • Serious bidders: Buyers have to do due diligence beforehand so will be serious buyers at the auction.

Cons of selling your house at auction

  • Highest price? House auctions do not always achieve the highest price possible. Other methods of sale allowing for upward negotiation may get a higher price.
  • Privacy: Auctions are public and anyone can attend. There are other more private methods of sale, such as tender.
  • Extra cost: Anywhere from $400 to $1200 for the auctioneer and the focus on high profile marketing can be more costly.
  • Stressful: Auctions can be nerve wracking due to their fast pace.
  • Buyer deterrents: Auctions can rule out potential buyers who aren’t able to secure finance by auction day while some may be deterred due to the competitive nature of the bidding. Potential buyers tend to assume auctions will rise to a price beyond their means. Registering to attend may also put off some.
  • Cooling off: During the wait for auction day, buyers may find another house and quickly make an offer.
  • Regret: If your price only just makes it over the reserve price, you may be disappointed and by then it will be too late.
  • Buyer tactics: When bidding against each other, bidders will only bid enough to get higher which may not be their best price.
  • Buyer bargain: While it is currently a seller’s market, in other conditions buyers have admitted they would have paid a much higher price for the home.
  • Failure to sell: Not every property will sell on auction day, although a sale is often negotiated shortly afterward.
  • Relisting expense: If your house doesn’t sell at auction and you need to relist it, you will be facing even more expenses.
Sell House Auction Should I

legal obligations in the auction room

Illegal bidding: It is illegal to use dummy or shill bids to persuade genuine bidders to raise their bid. This is when people who appear to be genuine are bidding on behalf of the seller. Vendor bids can be placed done by the auctioneer or real estate agent to move bidding toward the reserve price but must be clearly identified as such.

Terms and conditions: The auctioneer will read them aloud before the auction and announce the reserve price.

Other legal matters: No matter the method of sale, selling property is a legal transaction and real estate agents need to understand a range of legal issues including the Anti-Money Laundering Act. They need to adhere to their Code of Conduct and follow the law.

Failure to complete: If for some reason either the vendor or buyer can't complete the sale, it will become a legal matter. Always consult with your lawyer prior to an auction.

Got a question? Send an enquiry, we're here to help.

Disclaimer: The content of this researched article is general in nature and not intended as a substitute for specific professional or legal advice on any matter and should not be relied upon for that purpose.

Updated July, 28 2022 by Trish Willis | Member of the Property Institute of NZ (IPAC)

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