Auctions can be exciting and fun however, entering into an auction should be done with serious intent. There are certain guidelines and procedures to follow and your trusted agent will be able to advise you accordingly.
Remember, although the Agent is acting on behalf of the seller, their job is to help you buy the property and not hinder that opportunity. It is good advice to listen to their advice!
We hope the information below helps explain some of the important information about how an auction works, the terminology used and tips on how to be successful.
Registering to bid
- A bidder must be registered to bid
- In order to buy under the hammer at auction you must make a bid, however anyone can purchase a property after an auction if it is passed in.
- The Auctioneer cannot accept a bid from an unregistered person.
- Bidders must show their identification number when making a bid so as to be identified as a registered bidder.
- If you are unable to attend the auction or feel nervous, you can authorise someone to bid on your behalf and sign the contract as well. You do not need a Power of Attorney to do this but seek advice from your solicitor as to the best way to proceed and contact your agent for the necessary forms.
The Property, Stock and Business Agents Act 2003
- At the commencement of a public auction, the Auctioneer will make statements under the Property, Stock and Business Agents Act 2003
- It is important to listen to these as this sets the legal framework for the auction.
The opening bid
- The Auctioneer will call for an opening bid.
- Don’t be shy, show you mean business and bid hard (you have nothing to lose).
- The Auctioneer will set the pace of the auction and the bids they are prepared to accept.
- Make sure you make it clear you are bidding. The Auctioneer also has helpers to recognise bidders.
- The Auctioneer may refuse to accept any bid that, in their opinion, is not in the best interest of the seller.
The highest bidder and reserve price
- The highest bidder will be the purchaser subject to any reserve price
- The Auctioneer will clearly announce when the property has exceeded the reserve price and is going to be sold.
- They will make three final calls and at the fall of the hammer, the property will be sold.
- A bidder is taken to be a principal unless, before bidding, the bidder has given the Auctioneer a copy of a written authority to bid for or on behalf of another person.
A disputed bid
- In the event of a disputed bid, the Auctioneer is the sole arbitrator and their decision is final
- The Auctioneer is the person under law who controls the whole auction process.
- Once the Auctioneer declares the property sold then no further bidding can be accepted.
- The Auctioneer reserves the right to make one bid and one bid only on behalf of the vendor
- There is only one vendor bid and the rest are bids made by registered buyers.
- The Auctioneer can use a vendor bid at their discretion and must clearly state that the bid is a vendor bid.
What happens if a property is passed in?
- A property that does not reach the reserve price may be passed in
- If the bidding does not reach the vendor’s reserve price, the property is not sold under the hammer.
- The highest bidder then gets the opportunity to make the next offer. If not accepted, other buyers are offered the property. For this reason, it may be in your interest to stay after the auction to hear the outcome as you may end up with another chance to buy the property.
If you have any further questions or need advice on buying or selling at Auction please don’t hesitate to get in touch with one of our Agents on 02 9949 7077.