Who sets the reserve price at an auction in New Zealand?

The seller does. It is usually the lowest price they are willing to accept, and it is kept confidential until bidding reaches it.

What does passed in mean at an auction?

Bidding did not reach the reserve, so the home did not sell on the day. The seller can then sell to anyone on terms they agree, by private treaty or at another auction.

Can the seller bid at their own auction?

Only through a vendor bid, and only when the home has a reserve, the reserve has not been reached, and the auctioneer clearly calls it a vendor bid.

Seller guide

How a house auction works in New Zealand

An auction is one day, one room, and a sale that is final when the hammer falls. Here is how it runs, what the reserve is, and what happens if the home does not sell on the day.

Sources read 8 October 2026.

The reserve price

The seller sets the reserve price. It is usually the lowest price the seller is willing to accept, and it stays confidential between the seller, the auctioneer and the agent until bidding reaches it.

Vendor bids

A vendor bid is a bid made on the seller's behalf, usually by the auctioneer, to start the bidding or keep it moving. The rules only allow one when the home has a reserve, the reserve has not yet been reached, and the auctioneer says clearly that it is a vendor bid. Dummy bids and vendor bids at or above the reserve are not allowed.

An auction sale is unconditional

When the auctioneer accepts the winning bid and closes the auction, the sale is unconditional and the successful bidder is legally committed to buy. That is why buyers do their homework first: finance approved, the title, the LIM and a building report checked, and their lawyer's advice in hand, all before auction day.

After the hammer falls, the buyer and the seller sign the sale and purchase agreement and confirm the deposit has been paid. If either is not there, the auctioneer can sign for them.

Before auction day: pre-auction offers

A buyer can make an offer before the auction. The seller decides whether to accept it. If one is accepted, the auction can be brought forward with that offer as the opening bid, and the agency has to tell all the other interested buyers.

If the home is passed in

If bidding does not reach the reserve, the home is passed in. The seller is then free to sell to anyone, at a price and on terms they are happy with, by private treaty or at another auction. A seller should agree a plan for this with their agent before auction day, because not every home sells on the scheduled date.

Bidding by phone or online

Buyers who cannot attend can bid by phone with a signed telephone bidding authority. The agent should give them the auction pack before the day and make sure they understand their limit and that a winning bid is binding.

A note on advice

This page is general information, not legal, tax or financial advice. Talk to your lawyer or conveyancer, and an accountant for tax, before you decide.

Common questions

Who sets the reserve price at an auction in New Zealand?: The seller does. It is usually the lowest price they are willing to accept, and it is kept confidential until bidding reaches it.
Is an auction sale conditional in New Zealand?: No. When the auctioneer accepts the winning bid and closes the auction, the sale is unconditional and the successful bidder is legally committed to buy the property.
What does passed in mean at an auction?: Bidding did not reach the reserve, so the home did not sell on the day. The seller can then sell to anyone on terms they agree, by private treaty or at another auction.
Can the seller bid at their own auction?: Only through a vendor bid, and only when the home has a reserve, the reserve has not been reached, and the auctioneer clearly calls it a vendor bid.

Sources

Related guides

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