AUCTION GUIDES · 7 MIN READ
Vendor bids explained
A bid made on the seller’s behalf, by the auctioneer, against the people trying to buy the house. Legal everywhere. And the number you are allowed differs by state more than almost anyone realises.
Short answer
A vendor bid is a bid the auctioneer makes for the seller to push bidding toward the reserve. It is legal in every state provided it is announced. What differs is how many you get: New South Wales allows exactly one, South Australia allows three, Victoria sets no numeric limit.
Key takeaways
- A vendor bid is legal. A dummy bid is not. The difference is disclosure.
- NSW permits one vendor bid. SA permits three. VIC permits one or more with no stated cap. QLD and WA permit them up to the reserve.
- Every state requires the auctioneer to announce a vendor bid at the time it is made.
- A vendor bid cannot be used at or above the reserve. Above it, there is nothing for it to do.
- Co-owner bids are a different mechanic with different rules, and they are routinely confused with vendor bids.
What a vendor bid actually is
A vendor bid is a bid made by the auctioneer on behalf of the seller. Nobody is buying anything. It exists to move the number upward, usually because the bidding has opened well below the reserve or has stalled short of it.
It is one of the few mechanics in Australian property where the seller is a participant in the bidding rather than an observer of it, and it is the part of an auction that buyers most often misread.
A vendor bid is the auctioneer telling the room, out loud, that the seller wants more than this. It only works because it is announced. Take away the announcement and it is fraud.
Ben Williams, Founder
Used properly it is a legitimate tool. An auction that opens $200,000 below the reserve has to travel somewhere, and a vendor bid establishes a floor that a genuine buyer can then bid against without feeling they are bidding against themselves.
Vendor bid or dummy bid
These get conflated constantly, including by people in the industry. They are not the same thing and one of them is a criminal matter.
| Vendor bid | Dummy bid | |
|---|---|---|
| Who makes it | The auctioneer, on the seller’s behalf | The seller, or an associate acting for them, posing as a genuine buyer |
| Is it announced | Yes, and it must be | No. Concealment is the entire point |
| Is it legal | Yes, in every state, subject to conditions | No. Prohibited in every state |
| What it does to buyers | Tells them the reserve has not been reached | Makes them bid against a phantom |
The line between the two is disclosure, not intent. An undisclosed bid on the seller’s behalf is a dummy bid whatever it was meant to be.
Ben’s insightThe reason the distinction matters to a vendor rather than just a buyer: if you bid from the crowd at your own auction, or ask a friend to, you are the one breaking the law. Not the agent. Victoria says this plainly. Vendors who want to influence the bidding need to do it the declared way, through the auctioneer, or not at all.
Vendor bids exist because the reserve is hidden. So does the commission.
See what the percentage takes on your sale price, and what the same auction looks like on a flat fee.
See what you’d keepHow many you get, by state
This is where it gets genuinely surprising. Most people assume auction rules are broadly national. They are not. The permitted number of vendor bids ranges from one to unlimited depending on which side of a state border the property sits.
| State | Vendor bids permitted | Key conditions |
|---|---|---|
| New South Wales | Exactly one | The auctioneer must clearly state it is made on behalf of the vendor. The right to make it must be notified in the conditions of sale, displayed before the auction. |
| South Australia | Up to three | Each must be below the reserve and clearly announced as a vendor bid. |
| Victoria | One or more, no stated limit | Only the auctioneer may make them. The auctioneer must declare before bidding starts that vendor bids may be made and how, then announce each one as it is made. |
| Queensland | Up to the reserve | Once bidding reaches the reserve, a further vendor bid becomes an illegal false bid. Each must be announced. |
| Western Australia | Up to the reserve | The intended number must be shown in the conditions of sale, and is usually declared at the start of the auction. |
Sourced from each state’s consumer regulator, August 2026. Auction rules are set at state level and change. Confirm the current position for your state before your campaign.
Ben’s insightRead that table as a buyer for a second. In Sydney you can face one announced vendor bid. In Adelaide you can face three, all below the reserve, all legal, all disclosed. Same auction format, same word used to describe it, materially different experience. Nobody tells buyers this and almost nobody tells vendors either.
General information, not legal adviceAuction conduct is regulated at state level, the rules differ meaningfully, and they change. This page describes the position as published by each state’s consumer regulator in August 2026. Confirm the current rules with your agent, your conveyancer, or your state’s consumer affairs or fair trading body before relying on them.
How they must be announced
Every state requires the auctioneer to identify a vendor bid at the time it is made. In practice this is usually the auctioneer simply saying ‘vendor bid’ as they call the number.
Several states go further and require a declaration before bidding starts. In Victoria the auctioneer must declare that they may make bids for the vendor and explain how those bids will be made. In New South Wales the right to make a vendor bid must appear in the conditions of sale, which have to be displayed and available for inspection before the auction begins. In Western Australia the intended number appears in the conditions of sale.
If you attend an auction and hear a bid that is not attributed to anyone in the crowd, and the auctioneer does not say whose it is, that is worth noticing. The announcement is not a courtesy. It is the condition that makes the bid lawful.
Co-owner bids are a different thing
Frequently confused with vendor bids, and governed by separate rules. A co-owner bid is made where a property has two or more owners and one of them genuinely wants to buy out the others. Common in deceased estates, separations and jointly held investments.
Unlike a vendor bid, a co-owner bid is a real attempt to acquire the property. The bidder intends to own it outright at the end.
| State | Co-owner bidding |
|---|---|
| Victoria | Permitted. A co-owner may bid personally or through a representative, but not through the auctioneer. The auctioneer must announce before bidding whether co-owner bids will be made. |
| New South Wales | Permitted where it is set out in the auction conditions, the auctioneer announces it beforehand, and the auctioneer announces the bidder registration number of each co-owner or executor entitled to bid. |
Positions for QLD, SA and WA were not established to a publishable standard at the time of writing. Confirm locally.
How buyers read a vendor bid
Experienced buyers treat a vendor bid as information, and it is worth knowing exactly what it tells them, because it is telling them something about you.
- The reserve has not been reached. This is the clearest signal. A vendor bid only exists below the reserve, so hearing one confirms the property is not yet on the market.
- Genuine competition may be thin. An auctioneer reaching for a vendor bid early often means the room is not carrying the bidding on its own.
- There is a gap to close. Buyers use the size and timing of vendor bids to estimate how far the reserve sits above the current number.
This is the honest tension in the mechanic. A vendor bid helps move a stalled auction, and it simultaneously tells every buyer present that the seller is not yet where they need to be. It is a tool with a cost.
Passing in on a vendor bidIf the last bid before a pass-in was a vendor bid, the highest genuine offer was lower than the number the crowd heard. New South Wales prohibits an agent from quoting that amount afterwards without identifying it as a vendor bid, and Victoria has an equivalent restriction on advertising a passed-in price. Worth knowing if you are reading a ‘passed in at $X’ figure in a report.
What to ask your auctioneer
Vendor bids should be agreed before auction morning, not improvised. These are the questions worth asking at the same time you settle the reserve.
- Do you intend to make vendor bids, and how many are permitted in this state?
- At what point in the bidding would you use one, and what would you be trying to achieve?
- How will you announce them?
- What will you do if the vendor bid does not draw a genuine bid in response?
- If we pass in on a vendor bid, what can and cannot be said about the price afterwards?
The fourth question is the one that matters. A vendor bid that draws no response is a public signal that the room is finished, and it hands the strongest position to whoever made the last genuine bid. That is a decision worth having made in advance, alongside your reserve, rather than in the middle of a stalled auction.
For where vendor bids sit in the sequence of the day, see what actually happens on auction day. For what happens when the bidding stops short, see passed in at auction.
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Get Free Instant ValuationCommon questions
What is a vendor bid?
A vendor bid is a bid made by the auctioneer on behalf of the seller, rather than by a buyer. It is used to move the bidding upward toward the reserve price. It must be announced as a vendor bid at the time it is made.
Are vendor bids legal in Australia?
Yes, in every state, subject to conditions. What is illegal everywhere is dummy bidding, which is a bid made by the seller or someone acting for them without being declared. The difference between a vendor bid and a dummy bid is disclosure.
How many vendor bids are allowed?
It depends on the state, and the range is wider than most people expect. New South Wales permits exactly one. South Australia permits up to three. Victoria permits one or more with no stated numeric limit. Queensland and Western Australia permit them up to the reserve price.
Does the auctioneer have to announce a vendor bid?
Yes, in every state. The auctioneer must state at the time of the bid that it is a vendor bid, and in several states must also declare before bidding starts that vendor bids may be made at all.
Can a vendor bid be made above the reserve price?
No. In Queensland, South Australia and Western Australia the rules tie vendor bids to the reserve explicitly, and a vendor bid at or above the reserve becomes an illegal false bid. The purpose of a vendor bid is to move bidding toward the reserve, so above it there is nothing left for it to do.
Can the seller bid at their own auction?
Not personally, and not through someone else. In Victoria it is illegal for the seller to bid from the crowd or to ask another person to bid for them. Bids on the seller’s behalf may only come from the auctioneer, announced as such.
What is the difference between a vendor bid and a dummy bid?
Disclosure. A vendor bid is made by the auctioneer and announced. A dummy bid is made by the seller or an associate posing as a genuine buyer, and it is illegal in every state.
Can a co-owner bid at the auction?
Yes, but it is a different mechanic. Where a property has two or more owners, one may bid to buy out the others. In Victoria they bid personally or through a representative but not through the auctioneer. In New South Wales co-owner and executor bidding is permitted where it is in the auction conditions and the auctioneer announces their bidder registration number.
What does it mean if the property is passed in on a vendor bid?
It means the last bid was the seller’s own, not a buyer’s, so the highest genuine offer was lower than the figure announced. In New South Wales an agent must not quote that amount afterwards without identifying it as a vendor bid, and Victoria has the same restriction on advertising a passed-in price.
ABOUT THE AUTHOR
Ben Williams
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Ben spent 15+ years as a licensed estate agent and conducted over 2,000 auctions before founding Unreserved. He holds a Bachelor of Applied Science (Property & Valuation) from RMIT and is licensed across VIC, NSW, QLD, SA, and WA.