Real estate auctions are heady, emotional times for buyers and sellers. Both groups are keen to remain savvy, shrewd and unemotional but this isn’t always easy. Becoming well wised up on the many auction terms real estate agents throw out will help you through. Read on to get smart!
Term: "Vendor bid"
This is actually not a true bid for the property but one made by the auctioneer, on behalf of the seller. We often make such bids if bidding by the crowd is struggling and needs some stimulation. We’re only allowed to make one vendor bid during an auction and we always have to announce that it is an offer through our seller.
Term: "Bidding rises or advances"
We may also announce the particular amount by which we want each bid to increase. For example, we might say, “I will only accept increases of $10,000”, which can mean there’s quite a way to go before the reserve price is met. However, an announcement of “I will only accept increases of $1,000” usually means the opposite. Bidders don’t necessarily have to run with these bid amounts but we can reject offers other than these.
Term: "Seeking advice or going inside"
Just as it sounds, when we say we’re seeking advice or instruction, we’ll halt the bidding and step inside to chat to sellers. This pause can happen for multiple reasons but it effectively means we want to discuss the bidding with the buyer. Are they happy to sell it for right on its reserve price? Do they want to continue the bidding further to achieve the best price possible?
Term: "Reserve price"
This is one of the most important terms to get your head around. A reserve is set by the seller before the auction and is the lowest price at which they’re prepared to wave goodbye to their house. Entirely confidential, the price won’t be announced by us at the auction but if bidding doesn’t reach this preferred figure, the property generally won’t sell. If it does achieve the reserve, then the highest bidder snaps it up. Sellers may choose not to set a reserve on their home, in which case the house will go to the top bidder, regardless of the size of their bid.
Term: "On the market"
Another great term, "on the market" means the reserve price has been met and the property is now “live”. Fantastic news for sellers and for buyers, the action definitely jumps up a notch. Bear in mind, however, that we don’t have to announce that a property is on the market – although that doesn’t stop many bidders from asking us when and if it is. So, while we’re happy to hear this question from you during the auction, don’t be surprised if we don’t give you the answer. If we do, get in fast as the chances of buying your dream home are quickly running out!
Term: "Passed in"
A property passed in is a property which hasn’t achieved its reserve price and the seller doesn’t want to see it put on the market. The highest bidder now has first rights to the home and will be invited to step inside and negotiate with the seller on a price to suit all. But for both sellers and buyers, passed in doesn’t have to mean doom and gloom. In fact, many houses are sold straight after such auctions, often for startling prices even we didn’t expect.