In NSW, auctions are regulated by strict guidelines. To bid, you must first register with the vendor’s agent and receive a bidder number. The auctioneer is in charge of the proceedings, and all potential buyers’ bids are recorded. The seller will generally set a reserve price before the auction starts, and if the bidding reaches the reserve, the property will be sold at the fall of the hammer.
The seller is also permitted to make one bid called a vendor bid which the auctioneer will announce. If you are the highest bidder, you have to sign the contract of sale right there and then and pay your deposit (normally about 10 per cent). Also be aware, there is no cooling off period.