Selling

What Are Vendor Bids?

A Vendor bid is a bid that an owner can make on their home during their auction.

They are by law allowed one bid and it should be clearly noted as a vendor bid.
One of the reasons is that it has been unfairly lumped in with dummy bidding which, of course, is illegal.
Vendor bidding, on the other hand, is a way of transparently moving the auction to a place that is closer to where it needs to be for a sale to be secured.

Why do we use vendor bids?

One of the most common uses of a vendor bid is at the start of an auction because most buyers are like a deer in the headlights. They have stage fright and usually everyone is just waiting for someone else to do something. That someone else can be the auctioneer who places a bid on behalf of the vendor to get things rolling.
Another reason is when the bidding has stalled and is also still a long way away from where it needs to be. Placing a vendor bid at that point allows the auction to keep moving in the right direction.
Vendor bids exist to create momentum – nothing more, nothing less – which is why there is nothing to fear. It’s just a figure that the vendor is happy to remain the owner of the property.
Buyers tend to view vendor bids with some suspicion but it’s also the right of the owner to dictate the price that they’re willing to sell the property for.

Bidding behaviour

The thing is vendor bids only exist because human nature often prevents people from bidding.
They want to buy the property, but they don’t want to literally show their hand, which clearly doesn’t help their chances of being victorious on auction day.
When it comes to vendor bids, there are different rules across the country.
In Queensland, for example, auctioneers can place unlimited vendor bids whereas in New South Wales it is limited to one.
A strategy for buyers when faced with vendor bids is to view it as a guide-post of the direction that the auction needs to go in.

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In many cases vendor bids are not used however at auctions where registered bidders don’t want to start the bidding a vendor bid can be placed at the start or during the auction.

Trever Molenaar
Trever has worked in the industry selling property for over two decades. This lifelong profession has enabled him to master the art of negotiation. Trever’s own personal values relate through to his professional life 
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Molenaar x McNeice
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