The great Australian dream is a common goal right across the nation, however, the way we realise that dream at auction can vary between state lines.
To make it simple, we’ve put together this short, sharp and succinct article that walks you through the legislations and auction procedures, state by state.
New South Wales
Pulling the reins in
NSW, particularly Sydney has long been known for its healthy property market.
However, up until recently, underquoting by agents presented a lack of transparency in many property sales. Today, this practice is illegal and agents must provide evidence-based documents that support all property appraisals. That’s a good thing for all parties!
In fact, fines of up to $22,000 can be slapped on agents who advertise properties with muddy price guides (such as offers above $xxx).
At an auction in NSW, buyers must register to bid and a Vendor can only place one vendor bid per auction.
Come one come all.
In Victoria, there are no limits to the number of bidders at an auction and bidders don’t have to register. So it’s ‘come on in!’
There are also no limits to the number of vendor bids made on the day.
Here, cooling-off periods are a little different when it comes to pre-auction offers.
If a buyer makes an offer and the offer is accepted within 72 hrs of the auction, the buyer waives their cooling-off period rights.
Also, unlike other states, Auctioneers do not need to hold individual auctioneer licences.
All that is needed is an agent’s representative certificate and it’s game on.
Sunny but Strict
In the Sunshine state, presenting price guides to buyers in more than just a no-no, it’s illegal. While a property can appear within a price range search online, the website must declare that is not intended as a price guide.
It’s also important to note there is no cooling-off period in Queensland if a private treaty contract is entered within 48 hours of a passed-in auction, or if the buyer was a registered bidder at the failed auction.
At Auctions in QLD, buyers must register and get a numbered paddle that identifies their bid. Without it, a buyer can’t participate.
Unlike other states, a vendor is not required to have a reserve price. However if the vendor does indeed choose to then it must be put in writing prior to the auction. It’s important to note the auctioneer does not have to announce when the property has reached this price.
Finally, auctioneers must have an auctioneer licence as a real estate agent licence alone is not acceptable.
Southern Comfort for Vendors
Like in most states, buyers in SA need to register to bid at auctions as well as present photo ID. (When was the last time you got carded?)
When marketing a property for auction, agents do not have to provide any price guides and can simply refer to recent sales of similar properties to guide buyers instead.
If a price guide is made, the reserve prices cannot exceed 110% of the Vendor’s reserve price set before or during the auction. For example, if the vendor specifies $500,000 as the acceptable price, the reserve cannot be set greater than $550,000.
A cooling-off period does not apply if a sale is achieved on the auction day, even if it doesn’t happen under the hammer. Also good to note is that auctioneers must be registered auctioneers and vendors can make up to three bids.
Not the wild west.
WA does things nice and neatly. Here the auctioneer announces the particulars and conditions of sales of freehold property form before bidding can begin.
When it comes to vendor bids, the rules are generous but not unlimited and sees vendor bids capped at 10 per property.
The system here encourages as many bidders as possible, making it easy seeing they do not have to register.
No Vendor Bid Limits
In the NT Auctioneers must hold an active auctioneer’s licence in order for a property to be sold. It’s important to note too that a pre-auction offer will forgo any cooling off period.
When it comes to the auction, vendors must establish a reserve price before the auction begins. The auctioneer must not reveal it however there are no limits to vendor bids as long as each is disclosed to buyers.
A Tree Change for Many
2018 and 2019 saw a spike in house sales in Tasmania, making the island a very attractive place to be.
Private sales via contract are more the norm on the apple isle, however when it comes to auctions some rules seem familiar.
Interested parties must pre-register before bidding at auction and there are no limits to how many vendor bids can be made
Across the Nation
When it comes to auctions, there are a few key rules that are applied across the board throughout Australia.
- Non-genuine bids aimed to raise the bidding momentum are known as Dummy Bids. They are illegal in every state, so don’t even go there!
- At the auction, the Vendor will have a reserve price in place. When the bidding reaches that price, the property is declared ‘on the market’.
- In the case where a property fails to reach its reserve price, the highest bidder has the first right to negotiate an agreed-upon price.
- Once the hammer goes down, a deposit is paid and contracts are signed immediately after the auction ends.
- A vendor has a right to place a bid on their own property, however, the vendor bids must be made known to buyers.
To find your nearest Buyer’s Agent, Click here: