Just like other types of auctions, real estate auctions involve placing bids to purchase entire homes or lands. These properties are sold to the highest bidder once the price reaches or exceeds the reserve value set by the seller.
In Australia, property auctions are required to follow certain general rules. For instance, making dummy bids in an attempt to raise the price is considered illegal. Also, if the value of a property doesn’t reach the reserve price, the person who placed the highest bid has the first right to negotiate.
Aside from these general rules and guidelines, auction events must also follow the rules of the state where they are being conducted. For instance, in New South Wales, a new law was implemented that requires real estate agents involved in the properties being auctioned to provide documents supporting all property appraisals. The information presented in these documents must be evidence-based and follow the guidelines of the Real Estate Institute of NSW.
Also, real estate firms and agents can face a fine of up to $22,000 if they market properties with vague price guides. Agents who are found guilty of this practice could also lose their commissions and fees on the property’s sale.
If all aspects of the auction follow the state’s laws, then the event can proceed. In NSW, all prospective buyers must pre-register for the event in order to join the auction. Usually, the registration process is handled by the auctioneer or the real estate agency that organised the auction. All registered participants will then be assigned a bidder’s number.
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The event will then be facilitated by the auctioneer, who acknowledges the bids made by the participants. The goal of the auctioneer is to entertain offers from bidders until the current bid reaches or exceeds the reserve price, which is usually not disclosed to the public. The property is then sold to the highest bidder at the end of the auction.
Traditionally, real estate auctions are held on-site or inside a facility with the registered participants. However, due to advancements in technology and recent global events, such as the COVID-19 pandemic, online property auctions are now being held. In this type of setup, the auctions are held via video conference calls.
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If you’re looking to participate in real estate auctions, then make sure to get in touch with Ray White Albury Central. We have upcoming auctions that feature beautiful properties in various parts of Albury.