Aussie Auction : Home Bidders Answer Bell on Saturdays

Trying to find a parking space in the residential sections of Melbourne on Saturdays can be exasperating because Saturday is house auction day.

Almost all residences in Melbourne are sold by auction on the front steps of the property and are attended by bidders, sellers, real estate agents, the curious and inveterate auction attendees, crowding the sidewalk and standing in the street.

A real estate broker calls the auction to order by strolling into the street ringing a wooden-handled brass bell and looking somewhat self-conscious.

The seller may already have put money up front for advertising, the notice board in front of the residence, a sketch of the house for a newspaper ad, ads in newspapers and photographs placed in the window of the broker’s office.

What Traffic Will Bear

Or these expenses, if advanced by the broker, come off the top of the auction proceeds, running as high as 1% of the market value of the house.

And what is the market value? What the traffic will or will not bear, and often the minimum is an evaluation by the Heritage Board should the house be one of the old John Garland houses originally built for miners in the late 1880s.

In the case of the auction of one particular Victorian, the top bid was unacceptable to the seller and was rejected.

What now? The high bidder, seller and broker went into the house and talked. The high bidder had just won himself the right of first refusal of the seller’s price. There is no minimum to start the auction, and the seller is not bound to accept the top bid.

Settling-Up Time

If the seller doesn’t want to try again to sell the house, he must pay expenses in full now. If he wants to start the procedure all over again, the expenses will be added to the sales commission.

In Melbourne, the sales commission is roughly 3% on the first $50,000 in Australian dollars (about U.S. $32,000) and 2% on anything over that, or about 5% on houses selling for more than $50,000, and most do.

The procedure seems to be in favor of the real estate broker, who has the fun of going around ringing bells and yelling. “Hear ye! Hear ye!”