This week a member of the public emailed us with a query about an auction they had attended and the use of a vendor bid.
The Scenario…
2 buyers were bidding on a property and the price reached (let us suppose) $1million. After this, bidding stalled without the property reaching its reserve. The auctioneer then used the vendor bid of $1,005,000 but no one bid further and the property was about to be passed in with a vendor bid. The auctioneer then went back to the bidder at $1m, then spoke to the vendor and the property sold under the hammer for $1m.
I was not quite sure about this myself so I consulted with auctioneer Andrew Cooley who we interviewed last week.
The problem is that a vendor bid is still a valid bid, and is recorded in the bidding register.
Andrew’s response was that yes, indeed you can rescind a vendor bid as long as the auctioneer receives instructions from the vendor to do so. He also added that “it’s not good practice to rescind a vendor bid”.
