Do I need to bring a cheque to pay my auction deposit?

Auctions. They’re like game shows except you win the legal obligation to buy a house instead of prizes.

When you make the winning bid at auction, you immediately enter into a binding contract. That means no cooling off period and no “Oops, I didn’t mean to put my hand up all those times” excuses, so it pays to have your home loan pre-approved.

It also means you’ll need to stump up a deposit – usually 10% of the sale price – on the day, before you head off to celebrate. Having your payment method figured out before you don your auction hat will save a lot of stress.

Now, you could haul the cash along in a briefcase, but there are easier and safer ways.

Check the deposit conditions first.

Before you do anything, check in with the selling agent. Confirm that you only need a 10% deposit, not more, and find out which payment options are acceptable.

Option 1: Pay by personal cheque.

Personal cheques can certainly be handy at an auction. The beauty here is that you can make the cheque out to the exact figure of the deposit as soon as you make the winning bid, and you get to sign your name with a thrilling flourish.

Be sure to confirm if any personal ID is required when making your auction deposit with a personal cheque.

Option 2: Pay by bank cheque.

A bank cheque acts like currency, so you can effectively cash your cheque on the spot. The downside is, you need to know how much it’s for when you get it, and most financial institutions are closed when auctions are held.

Your best bet is to organise it in advance for 10% of the highest amount you’re willing to pay. If you get a bargain, you’ll pay more than the minimum required deposit, but that just means the additional cash is now tied up in your new home. You’ll also pay a fee to have a bank cheque drafted – about ten bucks. If you’re unsuccessful at several auctions the cost will start to add up.

Option 3: Organise a deposit bond.

This is like an insurance policy for your deposit. It’s a guarantee to the vendor that you will pay your deposit, and unlike promising your mate you’ll give them back the five bucks you borrowed, it’s legally binding.

Not all agents will accept a deposit bond, so make sure you double-check beforehand.

Auctions are already stressful enough. Make sure you can focus on cheering/crying by organising your payment method ahead of time.

At Blue Key Finance, we can organise a deposit bond for you from a reputable insurer, just ask.

About the author

Matt Carra

Matt Carra

Matt Carra is the Owner of Blue Key Finance, a Finance Broker since 2004, an SMSF Lending Specialist, a Property Investment Educator, and a Mentor to new Finance Brokers entering the finance industry. Matt is passionate about providing valuable guidance and honest advice, educating Australians on how to buy their first homes and invest successfully while protecting them with knowledge. Matt has strong long-term relationships with his panel of lenders and extensive knowledge on their credit policies, and utilises that skillset to give you peace of mind by recommending you to the right lender the first time, to negotiate a better deal, and to fight for your cause – that’s Matt’s commitment to you. Contact Matt today to start the conversation on 0425 726 538 or email

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