The vendor bid and the reserve have 2 very different purposes on auction day.
- 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 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
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 6: A Bidders Guide For Auction Day