The auction will begin at the allocated time with the auctioneer welcoming people, and announcing that he will start the auction. Some details about the property will be read out such as the address and some of the key features of the property. The auctioneer will then ask for an opening bid. The vendor may make a vendor bid to get the ball rolling.

Bidding

Once the auction is in progress bids can be made at any time, either verbally or non-verbally, by raising a hand or a nod of the head (If auction registration applies in your state or territory a bidder number must be displayed each time a person bids.)

The auctioneer normally informs people of the increments that they can bid on. At the beginning it’s not unusual for bidding to be made in $10,000, or sometimes $20,000 increments. When bidding slows down, people may offer increases of $5,000 or less (e.g. $1,000). However, the agent can ask that bids be kept at $5,000 increments, but if bidding stalls, he or she may agree to accept $1,000 and even $500 increments.

What happens when bidding stalls?

When bidding stalls, the auctioneer will consult with you to ask if the reserve price has been reached. The auctioneer will then announce either that “the property is now on the market” or that it has not reached its reserve.

If it is ‘on the market’ bidding continues until it stalls. The auctioneer will then solicit final bids, repeating the highest bid. If there are no further bids he will say “Going, going, gone” and bring down his or her hammer (or hand) on the word “gone”.  The property is then sold to the highest bidder.

What happens when a bid is successful?

The successful bidder will pay a deposit on the spot, usually 10 percent (unless you have agreed to a reduced deposit amount prior the auction), and the contract will be signed by both yourself and the purchaser.

Auctions usually waive any cooling-off period, so if the purchaser decides not to go ahead with the sale, you are entitled to keep the deposit.

What’s a reserve price?

A reserve price is the lowest price that you are prepared to accept for your property.

If the bidding does not reach your reserve price the property is not sold. The house is then considered to be passed in. If the house is passed in, the highest bidder usually has first opportunity to negotiate with you and the agent.