An auction is a complicated process for a newcomer, however, it can also be lots of fun. Before attending an auction as a bidder, or as a vendor, it is best to view other auctions so you become familiarised with the process. Below is a short description of what you can expect at a typical auction.
The auctioneer starts proceedings with a short explanation of the contract and terms of the auction. Buyers are entitled to ask questions at this stage
- The auctioneer will then call for an opening bid. If a genuine bid is not forthcoming, the vendor is entitled to make a “vendor bid”
- Once the reserve price is reached, the auctioneer will generally state that “the property is on the market”. This is when bidding can become more competitive
- If the highest bid falls short of the reserve, the property may be passed in or the auctioneer may pause the auction while the agent discusses the situation with the vendor
- The vendor may choose to reduce the reserve to the highest bid and recommence the auction; or
- If the vendor refuses to revise the reserve price, the property will be “passed in”. You may then be approached by the agent and invited to negotiate in an attempt to agree upon an acceptable offer for the vendor