Purchasing at Auction
At Ray White Glen Waverley, we pride ourselves on our successful Auction Campaigns.
Below, we go through the Real Estate Auction Rules and How to Buy at Auction, as well as a list of answers to Frequently Asked Questions.
How To Buy At Auction
To buy a property at Auction you must BID!
If your bid is the highest taken by the auctioneer and is above the vendor’s reserve price, you will purchase the property.
If your bid is the highest taken by the Auctioneer, 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.
Real Estate Auction Rules
Ray White are members of the REIV and conduct all their auctions in accordance with the Institute guidelines.
REIV Auctioneer Statements at Public Auctions Required under the Sale of Land (Regulations) 2005.
The Auctioneer must read out the following words by law, at the commencement of the auction.
By law, the Auctioneer must advise you that:
1. The auction will be conducted in accordance with the rules and any additional conditions that were made available for inspection before the start of the auction.
2. The auction rules prohibit an Auctioneer from accepting bids or offers for a property, after the property has been knocked down to the successful bidder.
3. The vendors have a reserve price.
4. As the Auctioneer, I will indicate bidders on request.
5. The law prohibits false bids and prohibits major disruptions by bidders.
The law also prohibits bidders attempting to prevent others from bidding and will issue fines if this occurs.
6. The rules permit vendor bids.
7. During the auction, the Auctioneer will say “VENDOR BID”, when making bids on the vendor’s behalf.
8. The law prohibits the making of “VENDOR BIDS”, other than by the Auctioneer.
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 bid each time it is used?
How many bids can a vendor make?
There is no restriction, but our policy is generally limited to a maximum of 2 or 3 vendor bids.
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.
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?
Not in Victoria.
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. (If you use one, make sure this person is a licensed estate agent and a member of the REIV).
Do I need to pay a 10% deposit if I buy today?
Yes. If the contract calls for 10%, or less if 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.
Good luck and happy bidding!