Page 40 - Real estate: a guide for buyers and sellers
P. 40
Real estate: A guide for buyers and sellers
‘On the market’ When is it sold?
During an auction the auctioneer can After the fall of the hammer, no more bids
pause proceedings and say they are ‘going will be accepted and the highest bidder
inside’ or ‘seeking advice or instructions’ will be invited to sign the contract of sale.
from the seller.
However, there is no legally binding
Generally, if the seller is satisfied the contract until both the buyer and seller
reserve has been reached, or is prepared have signed the contract of sale. The buyer
to sell at the bid offered, the agent will must also pay the deposit specified in the
then announce that the property is ‘on contract (unless otherwise agreed).
the market’.
The buyer cannot make the contract
This means that the property will then be subject to conditions and there is no
knocked down to the highest bidder. cooling-off period in a sale at auction.
If the reserve has not been met, the The sale is finalised at settlement when
auctioneer will seek further bids. If the all checks have been made, the title and
reserve is still not met, then the property transfer documents have been exchanged
may be ‘passed in’. and the balance of the purchase price has
been paid.
‘Passed in’
If bidding does not reach the seller’s
reserve price, then the property may be
‘passed in’.
The highest bidder then has the first right
to negotiate with the seller.
Advertising after an auction
If a property is ‘passed in’ on a vendor
bid, then an agent cannot quote the
‘passed in’ amount when advertising
and marketing the property, without
disclosing that it was a vendor bid.
For more information,
visit consumer.vic.gov.au.
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