You will not be able to bid at an auction of residential and rural property in NSW unless you give the selling agent your name and address and show proof of your identity. Your details will be recorded by the agent in the Bidders Record and at the auction you will be given a bidder’s number. Registering for an auction does not mean you must bid. Registering simply gives you the right to bid.
Proof of Identity
To register, you must present a card or document issued by government or a financial institution, that shows your name and address, for example:
One must show your name and be issued by a government or financial institution, for example:
Have your money ready to go.
As soon as the hammer slams down, you’re legally required to go through with the purchase if you have the leading bid. That means, if the bank declines your application for finance after you win, you could be in serious trouble, and you will most likely lose your deposit.
Minimise that risk by having your finance pre-approved before the auction. Pre-approval is an indication from your bank that you will be successful if you apply for finance up to a certain amount, conditional on nothing changing, and on the property you buy.
This will allow you to bid with confidence – just make sure you don’t ever bid over the amount you’ve been pre-approved for. Should you be the eventual purchaser on the day (Well Done!) then be prepared to pay the 10% deposit (unless otherwise agreed to a different amount prior to auction) and sign the contract. If you are bidding over the phone, the Auctioneer can sign the contracts on your behalf. The deposit can be in the form of personal cheque, bank cheque, cash or deposit bond if agreed prior.
The Particulars and Conditions of sale.
The Particulars and Conditions are available prior to the Auction from the sales agent. If you have any doubts as to the wording or clauses, then you should consult your Licensee Salesperson or your solicitor. Please note that if you buy prior to the Auction then the same conditions will apply. Have the Certificate of Title, Particulars and Conditions of Sale and any other matters approved by your solicitor before attending the Auction.
Who Needs to Register?
If you are bidding to buy the property jointly with another person, for example, a spouse or partner, only one of you needs to register.
You need to register if you are bidding for another person or a company, and you need to show the agent a letter of authority from them, authorising you to bid on their behalf. This also applies if you are bidding on behalf of someone on the telephone.
If you are bidding for another person the letter of authority must include the person’s name, address and the number on their proof of identity (eg. driver’s licence).
If you are bidding for a company the letter of authority must be on the company letterhead and the ABN will be recorded in the Bidders Record as the company’s proof of identity.
When to Register
You can register with the selling agent at any time prior to the auction, such as when you inspect the property, or on the day itself.
If you pre-register, you will still need to show the agent your proof of identity on auction day. The agent will then give you your bidder’s number.
What Happens at Registration
The agent will write your name, address and the number of your proof of identity in the Bidders Record and, if you are bidding for someone else or a company, their name, address and proof of identity details. The agent will then give you your bidder’s number, which must be displayed when you bid.
What If I Arrive at the Auction Late?
If you arrive after the auction has started and wish to bid, you will need to quickly find the agent and register or present your proof of identity, if you have pre-registered.
If you need to make a bid immediately, hold up your hand to let the auctioneer know you are going to make a bid after you have registered.
As soon as you have a bidder’s number, the auctioneer can accept your bids. Return your bidder’s number to the agent after the auction.
The agent is not permitted to show the Bidders Record to anyone, including the property owner. Only an authorised person from NSW Fair Trading is permitted to see the Bidders Record.
The agent must store the Bidders Record securely and cannot use it for any purpose.
This auction is being conducted under certain conditions that are set by law.
The auctioneer will have these conditions on display before the auction so that you can read them. The auction conditions include:
If you are the successful bidder, you must sign the sale contract and pay a deposit on the spot, usually ten per cent of the purchase price. There is no cooling-off period when you buy at auction.
After the exchange of contracts, your solicitor or conveyancer will carry out various searches on the property. Your solicitor and the seller’s legal representative will then arrange for settlement at which time you must pay the balance of the purchase price.
Dummy Bidding and Collusion
It is illegal to make dummy bids at an auction.
The seller of the property is entitled to have one bid made on their behalf by the auctioneer. When the seller’s bid is made the auctioneer must announce it as a vendor bid.
If you make dummy bids for the seller, you may be prosecuted and fined up to $55,000. The property seller who asked you to bid can also be fined up to $55,000, as can the agent and the auctioneer if they were involved in the arrangement.
It is an offence to collude with someone to interfere with free and open competition at the auction. This offence carries a maximum fine of $55,000.
Co-owners and Executors
A co-owner, executor or administrator or someone bidding on their behalf, may make more than one bid to purchase the property as long as: