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Following on from the members-only Awkward Auction Activities webinar, Jesse Davidson, Chair of the REINSW Auctioneers Committee, joins James Pratt and Cooley Auctions’ Briannan Davis to discuss the challenging (and sometimes awkward) things that can happen at an auction and how you can mitigate risk for yourself and the vendor.

On setting the reserve

"Obviously we all have to have a written reserve price before starting the auction," says Davis, a finalist at the 2017 REINSW Awards for Excellence Auction Competition. "The vendor can change the reserve at any time, however, if the reserve is lowered, it is definitely best practice to get it signed by the vendor.
 
“If there are two names on the contract, you must ensure it is signed by both parties, otherwise you can’t conduct the auction.”

On vendor bids

 

“If you have an auction with only one or two bids registered, a vendor bid will perhaps be a more commonly used tool,” says Pratt. “I think the vendor bid comes down to education and how much work the agent has done prior to the auction so they know where the buyers are at.” 
 
“I mostly use a vendor bid either to get an auction started or simply to protect the value for the owner if nobody turns up," says Davidson. "I believe that a good auctioneer and a good agent will treat a reasonable vendor bid as an opportunity to set it up for the next day.”

 

On authority forms

 

“It’s so important to make sure you’ve got authority forms executed properly before the auction,” says Davis. “This involves providing authorisation and details for the third-party bidder and a photocopy of the absent buyer’s identification.”

 

“While you may have a someone come up at the end of the auction to say: ‘You didn’t see my bid’ or ‘Can I put in a higher offer?’, at the fall of the hammer the property is sold to that particular party if the reserve price has been met," says Pratt. "Once a property is sold, it’s sold. However, a good auctioneer will certainly use trial closes – your first, second and third calls – to avoid this situation.”

 

“Always make sure your contract is absolutely bulletproof," says Davis. "Because if there’s any potential for buyer’s remorse, they’re going to speak to their solicitors to try and find a way to get out of that contract.”

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