And that's the catch.
If an agent puts a price on a house and you negotiate a purchase around that price, the bank is happy.
If an agent tenders, deadline sales, or auctions, then there is less certainty around the 'value' of the house. (I say 'value' because there is little actual value in the housing market at present - just some prices which are a bit better than others.)
Under these circumstances, the bank will lend to a registered valuation. First stop is the council, where it is likely the figure on the books is very different to what the market might suggest. Bear in mind that it is not the market suggesting a price for purchase at this stage - it is you, the purchaser.
As such, most people will need to get a qualified and bank-registered valuation done before the bank will consider a loan. And in the event of an auction, this should be done before the auction so you can bid with confidence, knowing that the bank is behind you. (If you bid and win, you are expected to pay a deposit on the day, and if you fail to complete the transaction, the deposit is normally forfeit.) A local valuer told me of people who had 5 or 6 such valuations done before they won an auction - each valuation costs around $750+GST.
With careful research you can 'play' the auction system a little. You'll not get a better price, but you can avoid the pre-auction expense of valuation.
Pre-arrange your lending. Carefully check the value of the property you are considering, including having an informal conversation with your chosen valuer. Ensure your auction settlement terms are suitable (4-6 weeks is not unreasonable, but many auctions cite settlement in 10 working days - you can normally change this), and that you have spoken to your lawyer, and advised the registered valuer you would use.
Then if you win your auction, get on the phone to the valuer and get that sorted. Most valuers, pre-warned, can turn this around in no more than 3-5 days. Take that to the bank, with the auction and lawyer details, and you're in a very strong position. Your pre-approval and the valuation should ensure a smooth process.
Risky? Yes, there are risks involved, and you cannot get around things like inspections and so on. But you can hopefully avoid the significant costs of several valuations (should you be unlucky.)