Auction, Auction, Auction! That’s all we’re hearing at the moment. And whether you love them or hate them, they’re here to stay.
Here’s some important Auction information and the answers to some frequently asked questions:
How to Buy at Auction
In order to buy at Auction you must make a bid.
If you bid is the highest bid taken by the Auctioneer and is above the vendor’s reserve price, you will purchase the property. The Auctioneer will clearly announce when the property is going to be sold.
If your bid is the highest bid taken by the Auctioneer but hasn’t reached the vendor’s reserve price, then the vendor’s agent may ask you to increase your bid to an acceptable figure at which the vendor will sell should no further bid be received. If the buyer and vendor cannot agree, then the property will be passed in. You, as the highest bidder, will have the first opportunity to buy the property at the vendor’s reserve price.
If the property is passed in without a bid or on a vendor bid, then the vendor via the vendor’s agent, is at liberty to discuss the purchase of the property with any genuine buyers. The vendor will look favourably on those buyers that bid at the Auction in any post Auction negotiations.
Disruptions, including questions asked of the Auctioneer after the commencement of the Auction, may be considered as an attempt to influence other bidders to your advantage. There are severe penalties that may apply for collusive practices in NSW and such tactics are taken very seriously.
Real Estate Auction Rules
The prescribed conditions of sale by Auction and warning notices will be on display at the Auction. It is important to familiarise yourself with these conditions.
- The highest bidder is the purchaser subject to any reserve price.
- The Auctioneer is entitled to make one bid only on behalf of the seller. This is called a Vendor Bid.
- Before the Auction, the Auctioneer must announce that the Auctioneer is permitted to make one bid on behalf of the seller.
- The Auctioneer must announce immediately before, or in the process of making the bid, that he/she is making a vendor bid.
- The Auctioneer can refuse a bid that is not in the interest of the seller.
- The Auctioneer has no authority to accept a late bid, that is, a bid after the fall of the hammer.
- If there is a disputed bid, the Auctioneer is the sole arbitrator and makes the final decision.
- The successful buyer’s name must be given to the Auctioneer as soon as possible.
Frequently Asked Questions:
Guardian Realty are members of the REINSW and conduct all of their Auctions in accordance with Institute Guidelines.
What is a reserve price?
It is a price at which the vendor will sell.
What does ‘passed in’ mean?
The bidding has not reached the vendor’s reserve price and the property is not sold.
If the property is ‘passed in’, who gets the first opportunity to buy the property?
The highest bidder. This is not a right, it is a courtesy
If the property is ‘passed in’ on a vendor bid, what happens then?
The vendor, via the vendor’s agent, is at liberty to negotiate with any genuine buyer.
Do I have to register prior to bidding at an Auction?
Yes, in NSW you must register to bid for residential and rural property Auctions.
What proof of identity do I need to register?
A driver’s licence is best. If you do not hold one you need a card or document issued by a government or financial institution that shows your name and address. For example a passport or Medicare card along with a utility bill or statutory declaration stating your address.
Can I bid on behalf of someone else?
Yes. If you are bidding for another person, you must provide an authority to act on their behalf, even if they are present at the Auction. You will also need proof of their identity.
Can I bid on behalf of a company, superfund or trust?
Yes, an authority to bid on behalf is required. If smut contain full details of the company including the registered address and ABN as the company’s proof of identity. This authority is still required even if you are the sole director of the company.
Can I register to bid for someone without the agent knowing whom I am bidding for?
Yes, ONLY if you have a power for attorney to act for that person.
What is a Buyer’s Agent?
A person who is commissioned to act on behalf of a buyer. If you use one, make sure this person is licensed and a member of the REINSW.
Can I request changes to the contract?
Yes. All changes must be in writing and approved in writing by the vendor or vendor’s solicitor prior to the Auction.
Do I need to pay 10% deposit if I buy today?
Yes, directly after the Auction. The contract calls for 10% unless the vendor agrees to a lesser amount.
Must I sign the contract on the day of the Auction if I buy?
Is there a cooling off period for sales at Auction?
No. The law does not allow you to cool off if you buy under Auction Conditions.
If you have any further questions relating to Real Estate Auctions, please contact your favourite Guardian Realty Agent.