Guide to Buying at Auction
Auctions have been recorded as far back as 500BC. The Romans used auctions extensively and since then this method of sale has been continually used throughout the ages.
Purchasing a property is a big decision and can often be quite daunting. Auctions play a major role in how properties are sold in Australia so it is important to feel comfortable about bidding at Auction. We hope you find this Auction Guide helpful and informative. If you have any further questions, please do not hesitate to contact our sales agents at Calibre Real Estate, we are only too happy to help!
Calibre Real Estate are members of the REIQ and conduct all their auctions in accordance with the institute guidelines. REIQ Auctioneer Statements at Public Auctions Required under the Sale of Lane (Regulations) 2004. The Auctioneer must read out the following words by law at the commencement of the auction.
By law, the auctioneer must advise you that:
- Today’s auction will be conducted in accordance with the rules in Schedule 1 of the Sale of Land Regulations 2004 and any additional conditions that were made available for inspections before the start of the auction.
- The auction rules permit the making of bids on behalf of the vendor.
- The law prohibits the making of vendor bids other than by the auctioneer.
- During the auction, the auctioneer will say “VENDOR BID” when making bids on behalf of the vendor.
- The Auctioneer will indicate bidders on request.
- The law prohibits a person from falsely claiming or falsely acknowledging that he or she made a bid.
- The law prohibits an intending bidder or a person acting on behalf of an intending bidder from intentionally preventing or causing a major disruption to the auction.
- The law provides for substantial penalties for any person who engages in prohibited conduct.
How to Buy at Auction
To buy a property at auction you must BID!
If your bid is the highest bid taken by the auctioneer and is above the vendor’s reserve price you will purchase the property.
If your bid is the highest bid but hasn’t reached the vendor’s reserve price 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. The Auctioneer will clearly announce when the property is on the market and is going to be sold.
If the property is passed in 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.
Don’t strategise too much—every Auction is different. Don’t get caught up in worrying about what will happen or how the bidding will unfold. Focus on what you are there to do and that is to purchase a property.
Frequently Asked Questions
What is a vendor bid?
It is a bid made on behalf of the vendor (owner) not a buyer.
Who can make a vendor bid?
Only the auctioneer.
Does the auctioneer have to declare a vendor big each time it is used?
How many bids can a vendor make?
There is no restriction but generally we allow a maximum of 2 to 3.
What is a reserve price?
The price below which the vendor will not sell. This price may vary.
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.
What happens if the property is “passed in” on a vendor bid?
The vendor via the vendor’s agent is at liberty to negotiate with a genuine buyer.
Do I have to register prior to bidding at an auction?
Government regulation requires Queensland bidders show photo identification and register with the auctioneer. Registered bidders will then be given a bidder identifier, such as a paddle, to be used during the auction
What is a genuine bid?
All bids are genuine; there are vendor bids and buyer bids.
What is a buyer’s advocate?
A person who is commissioned to act on behalf of a buyer.
Do I need to pay a 10% deposit if I buy today?
Yes. If the contract calls for 10% or the vendor agrees to a lesser amount.
Must I sign the contract on the day of the Auction if I buy?
Yes. To buy on the day you must sign a contract and pay a deposit.
Can I cool off if I buy under Auction conditions?
No. The law does not allow you to cool off if you buy under Auction conditions.