The rules for selling real estate by auction in Australia vary from state to state. A practice that is prohibited in one state may be allowed in another.
There are a few basic guidelines for real estate auctions that are used in all Australian States and Territories.
The auction is unconditional and there is no cooling-off period.
False Call - an untrue bid made to raise the asking price, which is illegal.
When the offer reaches the seller's reserve price, the property is "on the market," i.e., it is definitely for sale.
If the bid does not reach the reserve price, the highest bidder has the first right to negotiate with the seller.
Pay a deposit and sign a contract immediately after the successful auction.
The asking price made by the seller at the auction must be announced to the buyer.
If the auction is unsuccessful, there is no cooling-off period for a private sale contract concluded within 48 hours of the auction if the buyer is If you registered to bid at the auction at the time, then there is no cooling-off period.
It is illegal for a seller or their agent to give a buyer a guide price. If the property will appear on a website that is searched based on price, then the website must issue a statement explaining that the price there is not the guide price of the property.
Buyers must be registered to receive a number plate in order to bid at the auction.
The auctioneer must be licensed as an auctioneer, and it is not acceptable to hold only one real estate agent's license.
Sellers are not required to set a reserve price, if they do, then they must put it in writing before the auction, and the auctioneer is not required to announce before a bidder has reached this price.
The auctioneer may accept the buyer's bid until the reserve price is reached, but after the reserve price is exceeded, it is illegal if the buyer's bid is considered a "false bid".
This year, NSW took serious steps to end deliberate underbidding by agents prior to the auction. On January 1, a new law came into effect requiring the agent to produce evidence-based documentation to support all appraisals of the property.
Advertising only vague price guidance (e.g. starting at A$450,000) will result in fines of up to A$22,000 and agents found to be responsible for deliberately low offers will lose their commission on the sale of the property.
Unlike in Queensland, buyers must pre-register to bid at auction.
Unlike in Queensland, a buyer can only bid once on a property at an auction.
If a buyer's bid is accepted by the seller 72 hours before the auction, then the buyer has no cooling off period.
Buyers are not required to register in advance to bid at an auction.
Auctioneers in Victoria are not required to hold a special auctioneer's license as they are in other provinces.
There are also no restrictions on bidding by buyers.
Buyers need to register in advance and show their photo identification.
There is no cooling-off period for sale transactions concluded on the day of the auction, even if they are not concluded by a hammer drop.
The auctioneer must be a registered auctioneer.
Buyers are limited to a maximum of three bids.
During the marketing process, the estate agent may choose not to provide any price estimates, but instead provide a recent listing of property sale information.
The reserve price must be set in writing by the seller.
If the seller has previously indicated an acceptable price, either orally or in writing, the reserve price cannot be higher than 110% of the price.
Before the auction bidding begins, the auctioneer will read the details and conditions about the property.
The buyer's call can be made 10 times, through the auctioneer.
As in Victoria, buyers are not required to pre-register.
There is no cooling-off period for sales contracts concluded prior to the auction.
The auctioneer holding the gavel on site must be a licensed auctioneer.
The seller must set a reserve price before the auction begins, which must not be disclosed by the auctioneer.
There is no limit to the number of times a buyer may bid, as long as it is made clear to the seller that it is the buyer's bid.
Buyers must register in advance.
Along with Victoria and the Northern Territory, there is no limit on the number of offers a buyer can make in Tasmania.