How To Buy At Auction

If you’re thinking of bidding on a property that is for sale by Auction, it’s important that you understand the Auction process.

BEFORE THE AUCTION

Attend some Auctions as a spectator. This way you’ll get a feel for how the Auctioneer interacts with the crowd and how the bidding process works.

Going to a range of Auctions will help take away any nervousness you have about bidding for a property at an Auction.

It’s important to understand that if you buy property at an Auction you are accepting the terms of the Contract on display at the Auction.

This means you cannot make the contract subject to conditions (for instance, finance approval, longer settlement) and there is NO cooling off period. Therefore, make sure you understand the conditions of the contract – including how much deposit must be paid on the day if you are the successful bidder. And think about how you are going to pay that deposit.

Do your research. Understand what similar properties are worth. Then set your maximum price. Some people write this figure on a piece of paper that they have in their hand when bidding.

Before bidding starts, the Auctioneer must tell bidders:<ul><li data-block-key="cq86">the Auction will be conducted according to the Auction rules in Schedules to the Sale of Land (Public Auctions) Regulations 2014.</li><li data-block-key="fpurs">the rules prohibit bids being accepted after the fall of the hammer.</li><li data-block-key="7lqr3">bidders will be identified on request.</li><li data-block-key="d2akd">it is against the law to make a false bid, hinder another bidder, or in any way intentionally disrupt an Auction.</li><li data-block-key="62cm5">substantial fines apply to anyone who engages in illegal Auction conduct.</li><li data-block-key="b2fus">whether or not there will be vendor/seller or co-owner bids.</li><li data-block-key="b7pdk">any additional conditions that apply to the Auction.</li></ul>It is illegal to disrupt an Auction, but you can still ask questions. During the Auction, anyone can ask the Auctioneer a reasonable number of questions about the property, the contract, or the Auction. If you are bidding, you can also ask the Auctioneer to point out who else made a bid. The Auctioneer can set the amount by which bids increase. These are called rises or bidding advances.You can bid at the amount stated by the Auctioneer or offer an alternative amount. The Auctioneer may choose to accept or reject that bid.

The Auctioneer may:<ul><li data-block-key="ob4c">refuse a bid at any time during the Auction, including when the Auction hammer is falling.</li><li data-block-key="73qhd">if there is a dispute over a bid, resume the Auction at the last undisputed bid or start the bidding again.</li><li data-block-key="f76bn">refer a bid to the vendor at any time before the conclusion of the Auction.</li><li data-block-key="993p3">withdraw the property from sale at any time.</li></ul>Bid confidently. While you’ll get all sorts of advice on how to bid strategically, such as holding back to the last minute, blasting the opposition out of the water with a large increase on the last bid, it’s the person who has the last bid that is in the best position.There will come a time in the Auction that the Auctioneer will clearly announce that the property is “on the market” (which means that the bids have reached the vendor’s reserve) and the property is going to be sold to the highest bidder. If your bid is the highest bid accepted by the Auctioneer and it is at or above the vendor’s reserve price, you will purchase the property.If your bid is the highest bid accepted by the Auctioneer, but hasn’t reached the vendor’s reserve price then the property will be passed in. As the highest bidder you will have the first opportunity to secure the property at the vendor’s reserve price.If the property is passed in on a vendor bid then the vendor (through their real estate agent) is at liberty to discuss the purchase of the property with any interested buyers.

SOLD! AND YOU ARE THE SUCCESSFUL BIDDER

If your bid is the highest accepted and it is at or above the reserve price - congratulations, you are the winner! Now, to formalise this you:

• will be asked to immediately sign the contract.
• cannot make the contract subject to conditions and there is no cooling-off period.
• sign the contract before the vendor to make your formal offer to buy the property. The vendor accepts your offer by also signing the contract.
• have to pay the deposit specified in the contract (unless otherwise agreed).

Note: You cannot change the settlement terms unless approved by the vendor prior to the Auction.

When you and the vendor have signed the contract and the deposit has been paid,
the sale is binding and enforceable. The sale is finalised at settlement when:

• all checks have been made.
• the title and transfer documents have been exchanged.
• balance of the purchase price has been paid.

Your Barry Plant agent will help you through this process; they can explain everything to you prior to the Auction and answer all your questions. They can even organise to have someone help you bid, if you would prefer.

DEFINITIONS AND FAQ’S

How To Buy At Auction

BEFORE THE AUCTION

SOLD! AND YOU ARE THE SUCCESSFUL BIDDER

DEFINITIONS AND FAQ’S

What is a genuine bid?

What is a vendor bid?

Who can make a vendor bid?

Does the Auctioneer have to declare a vendor bid each time?

How many bids can a vendor make?

What is a reserve price?

What does “passed in” mean?

If the property is passed in who gets the first opportunity to secure the property?

If the property is passed in on a “vendor bid” what happens?

Do I have to register prior to bidding at an Auction?

Do I have to pay a deposit at the Auction?

What is a Buyers’ Advocate?

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