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I understand how guide and reserve prices work at auction but my question is at what point do you find out whether a property you have bid on has met its reserve price? Will the hammer still fall in the same way and then the auctioneer announce immediately that the reserve wasn’t reached.Alternatively do they tell you at some point after the auction? The reason I ask is that I am interested in two consecutive lots at my next auction so I would need to know straight away if I have purchased the first lot before knowing whether to bid on the second lot given I could only afford to buy one. Thanks
In a ballroom auction, the hammer will NOT fall if the reserve hasn't been met. If the bids haven't reached the reserve the auctioneer will usually say they can't let it go yet. Or if it has met the reserve they may say that 'it is in the room'. With online auctions there may be a reserve met indicator which will show when it is met.
Hope that helps.
That’s very helpful, thanks.
You will know if your last bid has been successful as the Auctioneer will bring the hammer down, look to you and ask your bidding number. Immediately, a member of staff will approach you and ask you to accompany them to sign the contract, pay the deposit and other fees, usually in an adjacent room. You will be given a copy and other documents which you should pass to your conveyancer ASAP. If you did wish to bid on the next lot just tell them and they will wait.
I am sure you will have read the legal pack before the auction but make sure you read the latest addendum before the sale commences as there could be a last minute change.
Every auction I been to the auctioneer says immediately after, that it has not sold. I have had them not sell when I've been bidding and had them come over to me immediately after to get my best offer. Ive always stuck by my maximum and got one that way.
As the other responses to your questions have advised - the auctioneer will always, at the end of every single lot they offer, state whether it has sold and if it did for how much or whether it failed to meet reserve and is still available, so that will be made very clear to you.
Whilst you understand how the guide and reserve price work do bear in mind that the guide is only an indication as to where the reserve is currently set and not necessarily what the auctioneer expects to sell it for.
Many people going to auctions think the guide price is what the auctioneer expects to sell it for and it is not, it is just an indication of where the reserve is, which is the minimum price of where he is allowed to sell it for. In order to ascertain what it might sell it for looking at past auction lots of a similar nature and type is the best way to ascertain the value and if you want to have a look around our site EIG which has information of over 800,000 lots sold at auction do contact me.
If a property doesn’t sell at auction it’s always a good idea to go up to the auctioneer immediately after it has been offered to see whether you can do a deal there and then. If you can agree a price with the auctioneer and vendor you’ll be signing a contract and exchanging contracts on the day in the auction room and that’ll be deemed to be a sold post lot.
Good luck in your auction hunting and do call us if you would like to have a look around our site.
David Sandeman, EIG Managing Director
Don't forget you can have a reserve price but with discretion. If this is the case the Auctioneer usually has 10% if he thinks the bid will not reach the actual reserve price.
Depends on the auctioneer. I know of an auctioneer who had discretion, and did not want more than £15k discretion on a £725k reserve