What is a Vendor Bid at an Auction and how does it work?
If you're looking to buy a property on auction day, it's important to understand what a vendor bid is. The term vendor bid is used when the auctioneer represents the vendor and submits a bid on their behalf. The vendor bid can be used several times by the agent to bid on the vendor's behalf.
The Auction
When you're attending a Melbourne Real Estate auction, the auctioneer will clearly announce a vendor bid so everyone in the crowd is aware of a vendor bid. The auctioneer may continually put in a vendor bid after crowd bidding to get the bid price close to the vendor's reserve price. If there are no other bids after the vendor bid, then the auctioneer may pause the auction and refer to the vendor. The auctioneer will then seek instructions from the vendor and discuss the progress of the auction. The agent will subsequently announce to the crowd that the bid price is very close to the reserve where the property will be on the market and call for further bids.
What if the bidding doesn't meet the reserve price?
If the auction fails to reach the vendor's reserve price, the property will be passed in with a reserve price. The highest bidder will be offered the first right of negotiation with the seller, to achieve the sale of the property at hand.
What about cooling-off periods when purchasing at auction?
An Auction campaign is one of the most popular methods of selling a house but there is one key fact to know before you start bidding at an auction. At auctions, you will need to abide by the auction conditions, and you should know that you won't get a cooling-off period. There is no cooling off three days prior to an auction, on the auction day or three days after the auction.
Before Auction Day you should always remember to:
· Have your finance approved
· Request a longer settlement period if you need to sell your home
· Have a 10% deposit available to pay if you are a successful bidder.
If you require more advice for an RT Edgar auction, please do not hesitate to reach out to the selling agent. Our team would be more than happy to advise you with your Victorian Real Estate and Melbourne Real Estate enquiries.
