Question about "Vendor Bids"

[johnpendles]

Sorry if these seems like a silly question.

I just went to an auction for observation purposes.

The Auctioneer invited bids but noone put forth a bid.

He then submitted a vendor bid of 1.25mil, he again invited bids from those present, but noone bid. he then put forward a 2nd vendor bid of 1.3mill, and then a 3rd vendor bid of 1.35mill.

My question is why did he submit the 2 latter vendor bids? If noone was bidding after his first vendor bid of 1.25, why would anyone come in at 1.35 after his 2 vendor bids?

what's the rationale for this?

 

[neK]

How come he was allowed to do more than one vendor bid?

In NSW its 1 vendor bid... thats it (someone correct me if im wrong)

 

[johnpendles]

Apparently in SA they're allowed 3

 

[Peter_Tersteeg]

How come he was allowed to do more than one vendor bid?

In NSW its 1 vendor bid... thats it (someone correct me if im wrong)

The property probably wasn't in NSW.

Multiple vendor bids are allowed in other states.

 

[vaughan]

Vendor made the bids so they could say "passed-in at $1.35M". Sounds better than "passed-in with no bids" dunnit?

 

[Logica]

Sorry if these seems like a silly question.

I just went to an auction for observation purposes.

The Auctioneer invited bids but noone put forth a bid.

He then submitted a vendor bid of 1.25mil, he again invited bids from those present, but noone bid. he then put forward a 2nd vendor bid of 1.3mill, and then a 3rd vendor bid of 1.35mill.

My question is why did he submit the 2 latter vendor bids? If noone was bidding after his first vendor bid of 1.25, why would anyone come in at 1.35 after his 2 vendor bids?

what's the rationale for this?

The rationale can often be deducted from what the auctioneer was saying when placing the vendors bids. I dare say the vendor was keen to sell and auctioneer's 3rd bid was pretty much where the reserve was? So it may have encouraged a silent buyer to actually bid and try to win it during the auction in public rather than later after the auction.

And 1.35 sounds better as pointed out by vaughan. Is it now 'for sale' at $1.35m?

NB: three vendors bids below the reserve are allowed in SA.

 

[johnpendles]

The rationale can often be deducted from what the auctioneer was saying when placing the vendors bids. I dare say the vendor was keen to sell and auctioneer's 3rd bid was pretty much where the reserve was? So it may have encouraged a silent buyer to actually bid and try to win it during the auction in public rather than later after the auction.

And 1.35 sounds better as pointed out by vaughan. Is it now 'for sale' at $1.35m?

NB: three vendors bids below the reserve are allowed in SA.

After his 3rd vendor bid of 1.35, he went inside to chat to the vendor. the agents went around to try and coax a bid out of one of the registered bidders. they got an offer of 1.3, which the auctioneer accepted despite it being below the 1.35 vendor bid that he previously called out.

he then did the 1st, 2nd, 3rd call and then said that the house was not sold and that the person who placed the 1.3 bid was able to come inside and negotiate further with the agents.

 

[Logica]

The auctioneer can withdraw their own bid... the bidders can't...
Seems like a good decision by the bidder to try and negotiate on site. Good visibility where the reserve is likely to be and an opportunity to buy between 1.3 and 1.35??

 

[goonandtell]

i always assumed they threw in a high vendor bid for the monday phone calls, e.g. someone not at he auction rings up to check on the property only to be told it got passed in at $1.35m so they should start at this level for negotiating.