The Vendor Bid VS The Reserve on Auction Day

The vendor bid and the reserve have 2 very different purposes on auction day.

Vendor bid

  • The vendor bid is primarily used to encourage bidding, whether at the start, middle or at the end of an auction
  • The vendor bid is not compulsory
  • Vendors have the right to use 1 vendor bid and the auctioneer must declare this prior to the start of the auction
  • The vendor bid should be an amount less than the reserve
  • The auctioneer announces the vendor bid on behalf of the vendor

The Reserve

  • The reserve is the amount the vendor is willing to sell for on auction day
  • The reserve must be in writing and must be given to the auctioneer prior to the commencement of the auction
  • The reserve is confidential
  • The reserve is compulsory, ie no reserve, no auction

In Summary:

The main differences between these 2 amounts is that the reserve is compulsory and an essential part of an auction process while the vendor bid is a helpful tool designed to kick off an auction or assist in helping an auction move forward to a sale under the hammer.

Part 1: Auction Vs Private Treaty?

Part 2: The Vendor Bid

Part 3: How Much Is An Auctioneer?

Part 4: On-site Vs In-Room Auction?

Part 5: Does an Auction Marketing Campaign Cost More?

Part 6: A Bidders Guide For Auction Day

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NSW State Budget – New Incentives for Home Buyers

As far as I can determine the latest NSW State Budget for 2010 – 2011 includes 4 incentives for some buyers to buy property, mainly new ones.

1)      “Off the plan buyers” up to $600,000 will no longer pay stamp duty. This is going to help developers obtain finance because banks want pre sales before firming up financial arrangements for their clients.

2)      Home buyers that buy during construction or at completion will receive a 25% reduction in stamp duty on purchases up to $600,000. This incentive will help some “spec builders”.

3)      “Empty Nesters” (or last home buyers) over 65 are being encouraged to sell their main home and buy another home up to $600,000. Those who do this will pay no stamp duty on the purchase.

4)      First Home buyers are getting $7000 plus they pay little or no stamp duty on home purchases up to $600,000 for another two years.

Those interested are encouraged to read the fine print about the “NSW Home Builders Bonus” by looking at the Office of State Revenue site.

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