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With all the scrutiny on real estate auctions, how is it the property owner can still make a bid to buy their own property?
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Hi Maddie,
Hopefully you have only experienced a Vendor Bid. This is a legal bid to notify to the buyers that the property is not yet at the reserve price and that the potential buyers will need to increase their offer in order to buy the property. This method is designed to help at properties where there is only one serious buyer at the expected price and the Auction would otherwise stop at the first bid.
Only the Auctioneer can make a vendor bid and he/she must state “Vendor Bid” when doing so.
If someone is bidding in the crowd on behalf of the owner, they are breaking the law and they should be reported.
I hope this helps in some way.
For the official policy and related laws I would suggest you contact the Real Estate Institute and ask for help
Best regards
Scott
I agree Maddie, it feels like a kick in the teeth when you are that one bidder. If you were the home owner, you aren’t going to sell for $100,000 less than reserve so the Vendor Bid is aimed at informing the crowd (person) where the reserve price sits before passing the property in. It definitely favours the seller and the agent, particularly when they do pass a property in, they can publish passed in at xyz rather than $100,000 less.