March 16, 2015
What is a Vendor bid and Dummy bidding?
There is a big difference between a Vendor bid and a Dummy bid. Bidding conditions are often closely related to auction laws. However, there are times when these conditions and the legal regulations related to auctions vary. It's important for sellers to research the applicable laws to avoid participating in illegal auction practices.
The Vendor bid
One such variance permits the seller to make a bid*. This is referred to as a ‘Vendor Bid’ and the auctioneer will make it clear when this is happening.
*(depending on your state they might be allowed multiple bids up to the reserve price).
A Vendor bid might be used to either start the auction or to get bidding to start again if it has stopped short of the reserve price.
It is a requirement for a vendor bid to be clearly announced as vendor bids and will be noted on the real estate agent’s ‘Bidders Record’.
All dummy bids are illegal and are simply false bids on the property that either the auctioneer, agent, employees, seller or friends make in an attempt to drive up the selling price.
To combat this practice, property auction law states you must register prior to the auction. To register, you must present a card or document issued by government or a financial institution that shows your name and address.
When registered you will be given a numbered card that you must show when bidding. An auctioneer will not take a bid from anybody without a number.
Contact either Owun, Suzanne or Costa on 02 9517 1818 or firstname.lastname@example.org for more information on auctions and bidding. Or, if you feel like dropping in at our office, we are located at Suite 106, Flourmill Studios, 3 Gladstone Street, Newtown 2042. Be sure to share our blog on Facebook and Twitter and let others join the conversation!