When you arrive at the on-site or in-room auction you will need to register as a bidder or have someone registered to bid on your behalf. You and they will require an Australian driver’s licence or other form/s of acceptable ID in order to register.
You will also need to have with you the ability to pay the deposit on the fall of the hammer. A personal or bank cheque is an acceptable form of payment. It is not acceptable to do a bank transfer following the auction. If you or your authorised bidder don’t have an acceptable form of payment with you the agent and auctioneer may refuse to register you.
At auction the highest bidder becomes the purchaser on the fall of the auctioneer’s hammer if the reserve price for the property has been met. The auctioneer will clearly announce that the property is selling to the highest bidder once the reserve has been reached and the seller has instructed that the property is on the market.
The purchaser then immediately enters into an unconditional contract to purchase the property and must pay a deposit, normally 10% of the purchase price unless a different amount has been negotiated prior. It’s important to note that there is no cooling off period when a property is sold under the hammer at auction and the contract is immediately binding.
Should the bidding on the property not reach the reserve set by the seller, the auctioneer will ‘pass in’ the property and begin private negotiations between the seller and interested purchasers. In this circumstance some sellers will prefer to negotiate exclusively with the highest bidder and try to reach an agreement on price and exchange contracts. If an agreement cannot be reached the seller may then negotiate with other potential purchasers including any that may not have been registered to bid at the auction.
Auction conditions continue until midnight on the same day once a property has been passed in, meaning that any exchange of contracts is unconditional and no cooling off period applies.
Make sure you know the maximum price you are prepared and able to pay and don’t exceed your financial capabilities at auction, because once the hammer falls, there’s no backing out.