The thought of auction day can cause anxiety and nerves for many people, but the more you know, the better prepared you'll be. Understanding the process in the lead up to, during, and after an auction can help ease any nerves you may have. So to help you prepare, we have outlined the typical auction process below.
Before Auction Day
Auction day can move quickly, so it's crucial that you speak with your agent and ask any questions you have about the process before the day.
Your agent will provide you with a detailed schedule of procedures that outlines what is likely to happen on the day. This will let you know where you should be during the auction, what happens if no one bids, what happens if the reserve isn't reached and if your family and friends should be there for support.
You'll meet with your agent a few days before the auction to finalise the necessary details for the auction, such as; the reserve price, how many bidders are anticipated, how and when you will be able to communicate with the agent during the auction, bidding increments, and how many vendor bids will be used.
Your agent may also meet with you quickly on the day just to run through and confirm these details again.
On Auction Day
Before the auction takes place, there will be one final inspection, allowing potential buyers the last chance to go through the property. Therefore, it's essential to make sure your property is looking its best and is well presented.
During this final inspection, your agent will also be displaying the mandatory rules and critical information regarding the auction. This will be placed in a prominent location to ensure any potential bidders can access this. Then the auction will get underway!
First, the auctioneer will introduce themselves, who they work for, and run through the mandatory statements an auctioneer must announce before an auction can commence. The role of the auctioneer is to act as a public negotiator and ensure that the process is legal and orderly.
Once the legal announcements have been made, the auctioneer may highlight a few property features; make sure to speak with your agent beforehand if there's anything specific you feel should be mentioned.
From this point, an opening bid will be called for, and the auctioneer will control the bidding flow. Once the bidding is underway, the results of the auction can be one of two outcomes; The reserve price will be met, and the auctioneer will announce the property officially "on the market".
Once the highest bid has been reached, the auctioneer will declare the property as sold, and no more bids will be accepted.
The reserve price is not met, and the property may "pass in". If this is the case, private negotiations will begin with the highest bidder.
However, if an agreed price cannot be reached with the highest bidder, the auctioneer may approach other bidders to potentially negotiate a sale.
After the Auction
Depending on the bidding outcome, there are different steps to the after auction process. If the property was sold during the auction, then the highest bidder will sign the contract immediately and pay the deposit.
If the property is sold, then the sale is under auction conditions with an unconditional contract and no cooling off period.
If the property does not sell during the auction or after private negotiation with bidders. In that case, your agent will discuss options with you, including re-advertising and marketing the property and considering how the property will be sold moving forward.