Successful bidders at property auctions in Victoria will no longer face the prospect of being gazumped after the hammer has dropped, thanks to recent law changes in the state.
The new rules, which prohibit auctioneers from taking any further bids once the property has been knocked down to the highest bidder, came into effect on 30 June.
This procedure has already been in place for members of the Real Estate Institute of Victoria (REIV) for several years, but has now been officially enshrined in state legislation following a sustained REIV campaign.
"The laws are aimed at preventing successful bidders from being gazumped by a late bid, and come after campaigning by the REIV over the last few years," said REIV CEO Enzo Raimondo.
The new rules must be displayed at least 30 minutes before the bidding gets started, and the auctioneer is also obliged to explain the new system before the taking any bids.
"In addition to displaying the rules, before the auctioneer calls for bid he or she must announce to bidders that the rules of the auction prohibit the auctioneer from accepting bids or offers after the property has been knocked down to the highest bidder," explained Raimondo.
Assuming the highest bidder has met the property's reserve price, they have the right to pay a deposit and sign the contract of sale immediately after the auction has closed, and will now be able to do so "safe in the knowledge that no other bids can be made on the property", said Raimondo.
"The decision will improve the transparency of the auction process and will ensure that all agents comply with a rule that has been in place for REIV members for a number of years," Raimondo added.
Can you afford to buy in this suburb? Find out how much you can borrow
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out