On TV, auctions look simple. A fast-talking auctioneer stands in front of a property and takes bids from eager would-be buyers, before the hammer drops and it\u2019s sold amid a flurry of waving hands and pointed fingers.<\/strong><\/p>\n In the real world though, it\u2019s more complicated. And it\u2019s in the best interest of all sellers to understand the popular sale method, from marketing to reserve prices and everything else in between.<\/p>\n Industry expert, WBP Group executive chairman Greville Pabst, explains the auction process and what sellers need to know.<\/p>\n It\u2019s in the best interest of all sellers to understand the popular sale method. Picture: Getty Images<\/p>\n<\/div>\n \u201cThe agent will run a marketing campaign, usually for four to five weeks, before the auction date,\u201d Pabst says. This involves advertising and showing the property, liaising with potential buyers and providing contracts.<\/p>\n Then, the day before the auction, the agent and vendor talk numbers. \u201cThis is a conversation around expectations on price. The feedback received during the campaign will be an important part of this,\u201d he says.<\/p>\n About to go to auction? Make sure you\u2019re prepared.<\/strong><\/em><\/p>\n The reserve price \u2013 the figure at which the auction becomes \u201clive\u201d \u2013 is also be agreed, as well as any potential vendor bids; a device used to encourage bidding.<\/p>\n \u201cThe agent will run through the process for the auction day too, so the seller is fully informed,\u201d Pabst says. An auction can either be held onsite at the property or in another location, like a boardroom.<\/p>\n There are strict rules about how auctions are run and rules differ from state to state, Pabst explains.<\/p>\n At least 30 minutes before the auction, the agent is required to display certain documentation about the property and verbally provide set information to potential buyers.<\/p>\n There are strict rules about how auctions are run and rules differ from state to state. Picture:\u00a0AAP Image\/Ryan Osland<\/p>\n<\/div>\n In Victoria, for example, the auctioneer must tell bidders:<\/p>\n In most states, potential buyers must a register before the auction starts to get a bidder\u2019s number.<\/p>\n The auctioneer will then invite an opening bid to start the auction and then accept subsequent bids.<\/p>\n Pabst says the auctioneer can \u201cset the tone for increments\u201d, but bidders are able to seek other amounts. A vendor\u2019s bid can be used to encourage bidding from buyers, he adds.<\/p>\n Dummy bidding \u2013 false bidding made by a non-genuine buyer \u2013 is against the law, Pabst says.<\/p>\n The auctioneer can \u201cset the tone for increments\u201d, but bidders are able to seek other amounts. Picture: Mark Cranitch<\/p>\n<\/div>\n Once the reserve price has been reached, the property is considered to be \u201con the market\u201d and is sold to the highest bidder. A 10% deposit is normally paid, with the rest due on settlement.<\/p>\n Pabst says if the bidding doesn\u2019t reach the reserve, the property is passed in. The highest bidder is usually given a chance to negotiate with the seller, but this is not law. \u201cLet the agent work for the money,\u201d he says.<\/p>\n \u201cWho says it has to sell under the hammer? It could be a rainy day, the main buyer might have fallen sick and stayed away. It\u2019s an urban myth that you\u2019ll get less for a passed in property. It\u2019s possible to run another auction on another day and get a great result.\u201d<\/p>\n
\n <\/p><\/div>\n Realestate au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"![\"preparing](\"https:\/\/i0.wp.com\/www.realestate.com.au\/blog\/wp-content\/uploads\/2017\/08\/23160413\/preparing-to-sell_800x600.jpg?resize=800%2C600&ssl=1\")
<\/p>\nBefore auction day<\/h2>\n
On auction day<\/h2>\n
![\"MANLY](\"https:\/\/i0.wp.com\/www.realestate.com.au\/blog\/wp-content\/uploads\/2017\/08\/12180207\/capi_2a51fa72df1e67b6a9a8b1a2481b57f3_23c0dbf2f4fade4609e4177318eba9ad-1024x768.jpeg?resize=1024%2C768&ssl=1\")
<\/p>\n\n
Bidding<\/h2>\n
![\"Auctioneer,](\"https:\/\/i0.wp.com\/www.realestate.com.au\/blog\/wp-content\/uploads\/2017\/08\/14112156\/capi_cc4fdc7022af2d52f0b245f16b203610_d3abfd7e2047c5f9b7e0a2a2410e8b23-1024x768.jpeg?resize=1024%2C768&ssl=1\")
<\/p>\nReaching reserve & going \u201con the market\u201d<\/h2>\n
Passed in<\/h2>\n