Buying a home
How an auction works - The Auction Advantage Ep 1
13 August 2018
Nicole Jacobs, buyers advocate for Channel Nine's The Block, presents The Auction Advantage: tips to help you understand the auction process.
Bidding at auction isn’t rocket science, but you do need to know a few things beforehand in order to bid at the right moment and control your spending.
[Auctioneer]: Ladies and gentleman, welcome to The Block Auctions.
[Woman bidding]: 2.8.
[Man bidding]: 850, 3 million and 5.
[Auctioneer]: Sold ladies and gentleman.
[Nicole Jacobs]: The key steps on auction day are:
One, that the auctioneer will come out to the crowd and actually talk about the property, talk about the area.
They’ll read out very importantly the rules of the auction.
[Auctioneer]: The rules of the auction prohibit an auctioneer from accepting…
[Nicole Jacobs]: They will then talk about the assets of the property…
[Auctioneer]: We offer the largest parcel of land at 478 square meters.
[Nicole Jacobs]: And then they will call for an opening bid.
[Auctioneer]: Let’s get underway!
[Nicole Jacobs]: And this is your chance to either wow the crowd with something that’s big and bold…
[Auctioneer]: For opening bid here…
[Man bidding]: 3 million, 14.
[Nicole Jacobs]: Or it may be that it’s silent. And they may well start it with a vendor bid.
[Auctioneer]: 2.5 the bid, who would like to go next?
[Nicole Jacobs]: Knowing whether the auctioneer is going to refer the bids to the vendor before putting it on the market is really key .
[Auctioneer]: Well ladies and gentlemen I’m going to call a quick time out and have a chat with my vendor.
[Nicole Jacobs]: But if it is a non-referral auction where they are not going to consult the vendor, they’re just going to roll through until they sell the property or maybe even pass that property in, you need to know that to know when you need to bid.
[Man bidding]: 6, 15.
[Auctioneer]: 6, 15. SOLD. Congratulations!
To recap on Nicole’s tips a typical auction works like this:
- The auctioneer will start by talking about the property and surrounding area
- You’ll then be told the auction rules
- The auctioneer will tell you the assets of the property; then
- They’ll a call for an opening bid.
This is your chance to kick things off with a big and bold offer, or perhaps stay silent and wait for an opening vendor bid.
Tip: You’ll need to know whether it’s going to be a referral or a non-referral auction. If it’s a referral auction the auctioneer may have to refer all bids to the vendor, or if it’s a non-referral, the bids will keep rolling in until the property is sold.
Ready for the next step?
Hear some of Nicole’s tips on how to prepare for auction day in Episode 2.
- What can I expect at auction?
- My experience buying a house at auction
- How can I estimate the total costs involved in buying a home?
Nicole Jacobs is founder and director of Nicole Jacobs Property and a licensed REIV estate agent. Nicole is passionate about helping people find their dream property and regularly appears on Channel Nine’s The Block as a buyers advocate. With nearly 20 years business experience, Nicole is a big supporter of women in real estate and empowering them to achieve their goals.
Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product.