The auction entry deposit — what it is, when it is refunded and when it is forfeited

The entry deposit is an amount paid by anyone who wants to bid, before the session, to guarantee that bidders are serious. Its amount and form are set by each auction's terms booklet — a fixed sum or a percentage of the lot's value.

Why is a deposit required?

An auction depends on bidders being able and willing to buy. The deposit keeps out frivolous bids that push the price up and then walk away, protecting the owner and the other bidders.

How is it paid?

The booklet sets the accepted methods — a bank cheque, a deposit or a letter of guarantee — and the deadline. Keep the receipt and bring it on the day.

When is it refunded?

If you do not win, the deposit is refunded after the session under the procedure and timing in the booklet. If you win, it is usually set against the price or held as security until you finish paying.

When is it forfeited?

• If you win and do not pay the price by the deadline.
• If you withdraw after the sale or refuse to sign the required documents.
• In any other case the booklet states explicitly.

Advice before paying

Do not pay a deposit before inspecting the asset and reading the whole terms booklet, and set a ceiling that covers price and costs. That way the deposit stays a guarantee of your intent rather than a possible loss. See also how to take part in an auction, step by step.

Common questions