How To Buy A Property At Auction Guide
To buy a property you must BID!
It is important that you make yourself known at the auction so you can clearly voice your bid. No song and dance is required, a simple hand in the air is sufficient.
The auctioneer will clearly announce when the property is on the market and is going to be sold.
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 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. 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.
At every Caporn Young auction we will have our representatives in the crowd ready to help, please don't be afraid to ask for assistance. Click here to view our team so that you might recognise some faces in the crowd!
The Advantages of Buying at Auction
You are bidding to purchase a property in an open and transparent manner. The buyers you are competing against are genuine buyers. You know that you are purchasing the property at true market value - no buyer has advantage over another buyer on auction day.
- Set your budget before the auction
- Bid with confidence
- HAVE FUN!
Real Estate Auction Rules
You 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 REIWA's Code of Conduct.
- 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 the vendor's behalf.
- 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.
- When you buy at auction the purchase is an unconditional, cash sale, therefore all inspections such as pest and building etc must be conducted prior to auction.
- Finance must be approved prior to bidding.
- Bring your cheque book. If you are the lucky purchaser you must pay a cheque deposit of 10% at the signing of the contract.
Brief Auction History
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 through the ages.
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?
A maximum of 10 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 has 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 WA.
What is a genuine bid?
All bids are genuine; there are vendor bids and buyer bids.
What is a dummy bid?
A dummy bid is a bogus bid that someone makes in order to drive the price higher. It is illegal to make dummy bids at auction.