This article is focused on New Zealand law and explains issues from a Common law perspective.

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How to buy a New Zealand house at an auction


New Zealand Property Auctions have proved to be a popular way of selling houses in recent years. Buyers should be aware that the whole process has its own peculiar set of rules and potential difficulties. You should make sure that you do all the necessary background work before the auction.

Check the "Particulars and Conditions of Auction"

Usually a set of Particulars and Conditions of Auction are drawn up for the particular property before the auction. You should study these closely before the auction and take particular note of any special conditions that might attach to the property. For instance, if there was an agreement between the owner and a neighbour about some particular matter, and the agreement was not registered on the title, then the Particulars and Conditions need to mention it.


Be aware of what warranties the seller is giving in relation to the property. In the Particulars and Conditions the seller may try to limit the warranties that apply in a standard agreement for sale and purchase.

New Zealand Land Information Memorandum

It is very important that you obtain a Land Information Memorandum, which contains the local council's records on the property (see How to obtain a Land Information Memorandum), and that you are satisfied with all aspects of the property.

How is the auction run?

Usually the seller will have set a reserve price for the property. It is usual practice for this not to be disclosed to bidders.

The seller may be entitled to bid for the property too, but this will be indicated in the Particulars and Conditions.

Once the highest bidder is found, that person becomes the buyer and must sign a contract and pay a deposit (usually 10 percent). If you are unable to pay the deposit the auctioneer may re-open the bidding, or take the second highest bid so long as it was above the reserve price.

Cautionary notes
  • You should not attempt to back out of the deal by claiming not to have the deposit: the auctioneer has the authority to sign the contract on your behalf, and you would then become liable for the full purchase price.
  • Make sure you do the necessary background work before the auction and that you are satisfied with the property that you intend to bid for, as you cannot make a conditional offer at an auction.

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