A real estate auction is a public sale of a property, usually conducted by an estate agent acting as an auctioneer, and is governed by strict rules.
The auction is advertised for a specific place, time and date. Prospective buyers bid and the property is offered to the highest bidder at the seller’s discretion.
There is usually an advertising campaign with open house inspections for several weeks leading up to the auction date. If you have attended an open for inspection and left your contact details, the agent may contact you in the lead-up to the auction to gauge your level of interest.
On the day of the auction, the property may be open for inspection for one last time, for at least half an hour before the bidding starts. This gives you a chance to have a final look at the property, the relevant paperwork and the auction rules.
By bidding, you accept the terms of the contract on display before the auction, and will not be able to negotiate terms, such as a longer settlement period.
For a detailed description of how auctions work, including the rules of selling by auction in the State of Victoria, please visit Consumer Affairs Victoria by >> clicking here.
There are strict rules about how an auctioneer runs an auction, and how people attending the auction must behave.
The auction rules and the auction information statement outlining Victoria’s auction laws, must be on display at the place where the auction will take place and for at least 30 minutes before the auction starts.
The auction rules, information statement and announcements the auctioneer must make are set out in the Schedules to the Sale of Land (Public Auctions) Regulations 2014. Substantial penalties may apply to anyone who breaks the auction rules.
Before bidding starts, the auctioneer must tell bidders:
Although it is illegal to disrupt an auction, you are allowed to ask the auctioneer a reasonable number of questions during the auction about the property, the contract, or the auction. If you are bidding, you can also ask the auctioneer to indicate who else made a bid.
Before you bid:
research the market, search the internet, attend auctions, speak with several estate agents and monitor auction results
get independent, expert help on legal, finance and building matters
decide your bidding limit – that is, how much you are willing to offer
Auctioneers have different ways of conducting an auction. Generally, they aim to encourage as many people as possible to bid in order to achieve the highest possible price.
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 but it is up to auctioneer whether or not to accept an alternative amount.
The auctioneer may:
For a detailed description of how auctions work, including the rules of selling by auction in the State of Victoria, please visit Consumer Affairs Victoria by >> clicking here.
A vendor bid is made on behalf of the seller if the seller is not satisfied with the amount of the last bid. A vendor bid:
A “Sale by Deadline” campaign is a sale process whereby prospective purchasers are invited to submit an offer in writing to purchase a particular property, on/or before a nominated closing date & time.
The offer submitted must be on a Sale by Deadline form (provided by the agent) and will include the terms of the purchaser’s offer (i.e. the buyers name/s, price, deposit, proposed settlement period and any conditions associated with the sale etc).
All offers need to be submitted to the selling agent, in the prescribed format, on/or before the nominated closing date and time of advertised Sale by Deadline campaign.
Any offers that have been submitted will then be presented to the vendor for consideration. Importantly, offers will not be disclosed to other buyers, only to the vendor.
The vendor will then:
a). Select which offer to accept.
b). Seek to continue to negotiate with one or all purchasers that have submitted offers.
c). Reject all offers.
It is important to note that Sale by Deadline offers are non-binding however submission of a written Sale by Deadline application gives the purchaser the right to negotiate with the seller.
If you have any questions about the Sale by Deadline process or any other method of sale, please contact Ray White Rural Victoria by >> clicking here.
To view a typical Sale by Deadline form please >> click here.
Although the majority of Australian property is sold via a public marketing campaign, many are sold by word of mouth, often facilitated by a diligent real estate agent. We call this method of selling an ‘Off Market’ property transaction.
The private nature of these ‘Off Market’ transactions mean we may have no, or very little supporting photography, video or property blurb to distribute. As a result, there may very little buyer competition for our ‘Off Market’ properties however this will change once these properties are converted to public campaigns.
For more information about ‘Off Market’ properties, or to add your property to our ‘Off Market’ list please >> click here.
To view a selection of Victorian transaction case studies please >> click here.
We would be delighted to provide you with a current property market appraisal. Please make contact with us by >> clicking here.