Twitter account and Facebook page will be created to help in developing an interactive interest toward the auction. All the features of the piece of land will be posted on two accounts (REINSW, 2003). The followers in the two accounts will be informed any time a new bidder has signed on. This is to help create credibility about the event.
Designed and printed one page flyers will be created. They will have all the information concerning the event. This will also include photos of the piece of land. Some of these flyers will be given to area merchants, friends and family. Additionally, some flyers will be given to community centers and other commercial offices. Other flyers will be posted on boards around the town (Oliver, 2002).
Personal invitations will be sent to individuals around the town who might be interested in the auction. This is one way of creating audience toward the auction (Achita & Tams, 2017). Moreover, emails from the interested people from Facebook and twitter account will be collected and then send personal invitations. Photos of the piece of land will be included in these emails.
Before the auction starts, it is necessary that this information is right hand. The seller must give more information just in case the reserve price is not reached and what if nobody bids and the action that must take place after.
30 minutes before the auction starts, the property will be open for the potential buyers to inspect the piece of land. This will allow the potential buyers to have a final look at the land. Thus, the land will be in its best position and well fenced (Millman, 2010). During this period, I will display the necessary information and mandatory rules concerning the auction in a specific location for the probable buyers to see for a maximum of 30 minutes before the auction starts.
Announcements
Before the auction is underway, the auctioneer will introduce himself and the NSW Real-estate Training College Agency that he is working for. The auctioneer will make all the legal announcements and the auction rules and laws before the auction starts. Once all these is done, then the auctioneer will describe the benefits of the piece of land, including the value, the buyer will get after purchasing it(Bockstedt & Goh, 2011). This is normally, the last chance the auctioneer has to engage the crowd so he must make very good use of it. This will ensure that the crowd is excited and so the auctioneer has to provide a detailed report concerning the land on sale as well as the benefits and valuable features (Wang & Nekipelov, 2017).
Once the introduction of the auction is over, the auctioneer will call for the opening bid from the public. In case, there are no opening bids, then the auctioneer will start the auction with the bid of the seller. As from this point, the flow of the bidding will be controlled by the auctioneer. The outcome of the auction could be either of the two options as the bidding goes on (Hougaard, et al., 2016). One of the outcomes can be the seller’s reserve price is met, and if this happens the auctioneer will declare that the piece of land is ‘on the market’. Once the highest bid has been done, the auctioneer will lower the harmer and the piece of land declared sold. Immediately the hammer drops, no more bids can be done.
The second outcome of the auction can be, the reserve price is not met. In such a case, the auctioneer may ‘pass in’ the piece of land. The auctioneer is required by the law to get into private discussions with the highest bidder. If the auctioneer and the highest bidder do not come to terms concerning the sale price, then he will approach the other bidders to attempt and negotiate for a sale price. If the land will be passed in on the seller’s bid, then by law, the auction report will indicate this to be the case.
Depending on the results of the auction, the auctioneer will take either of the steps after the auction has come to an end; if the property has not been sold, then he will discuss with the seller. If the reserve price was reached and the land has been sold, the agent will invite the buyer to sign the contract of sale and make some deposit. Once all this has been done, the auctioneer will countersign after confirming that the deposit has been made. Unconditional contract then does exist between the buyer and the agent and they can meet understanding that the sale has been made.
The buyers will be contacted through emails and through personal calls. The auctioneer will get the emails and phone numbers from the register where they would have registered as bidders on the auction days.
This is to finalize about the auction. This will take place 45 minutes before the auction starts. This meeting will include confirmation of important information concerning the auction such as, the reserve price, and the number of bidders expected (Morales-Camargo, et al., 2013). Furthermore, the means of communication between the auctioneer and the seller will be communicated here and when. Other information that will be communicated here will involve bidding increments and what will follow if the reserve price is not reached. Additionally, the auctioneer will confirm during this meeting that his friends and family will not take part in this auction. Finally, the seller will also confirm how many of his bids will be used during the auction.
Authority
Civil Law (Sale of Residential Property) Act 2003 part 2 which is applicable to a contract, or projected contract, for the sale of suburban belongings nevertheless, this part will not be applicable to a contract, or projected contract for the sale of property if—
(a) The contract comes up from the exercise of an alternative to purchase the property and—
(b) The buyer has any sort of relation to the seller.
Up to January 2016, agents are not allowed to use open-ended guides such as “offers over” when listing a property for sale at auction. In its place, they must provide a probable selling price or price range where the higher figure indicated fifers with the last rice range given by not more than 10%.The selling agent must also give evidence in terms of benefits to back up their predictable property value.
One has to register with the seller’s agent if they wish to bid in an auction in NSW. This will involve being given the bidder’s number. Those who wish to bid can register in advance or they can do on the day of auction. In case one is bidding on behalf of someone else, they will need to submit to the agent a letter of authority allowing them to bid for somebody (Ducarroz & Yang, 2016). It’s also important to understand that you have the option to make a pre-auction offer if the seller is willing to consider it before the property goes under the hammer.
Before the auction starts, the agent must give all potential bidders a copy of the Bidder’s Guide. This contains a range of vital information, such as how you can register to bid and what sort of identification you will need to provide (MetroAuctions, 2010).
By law, all agents must clearly show a range of other auction conditions, such as:
Contract for the Sale and Purchase of Land – 2017 Edition
According to this Act, all sellers must include specific details in the agreement for sale and should also make particular promises officially known to as ‘warranties’ regarding the property on sale which in this case is a piece of land (Andreas & Reinhar, 2017). These requirements are known as Vendor Disclosure Requirements. Some of the most common documents that are included in the contract include a zoning certificate. A zoning certificate which is normally known as a ‘section 149 certificate’ is given by the local council and indicates planning controls as well as other things that may affect the property that is to be sold such as road widening and many more (Machlis, 2000). Another document that must be included in the contract for sale is a copy of the certificate of title deeds confirming that you are the legal owner of the property. Additionally, copies of any documents leading to easements, restrictions, rights of way or covenants must be included in the contract for sale (NSWFairTrading, 2010).
Australian Consumer Law, clause 11 states that where the buyer undergoes Loss because of any purchase of any Lot and:
(a) the products that are part of a set are not PDH Goods with a buying price of $40,000 or
(b) the buyer undergoes the Loss not as a result of any infringe by the Seller or the agent of the buyer guarantee or other related terms of the Australian Consumer Law;
then, and any other regulation that maybe applicable and cannot be disqualified, or in relation of which accountability cannot be incomplete by the Terms and Conditions, the Seller and the Agent will not be legally responsible for any Loss experienced by the buyer. This section is applicable even if the Seller and/or the Agent were aware or ought to have been aware that the applicable Loss would be experienced.
All persons present at the auction are advised by the auctioneer that the auction may include a risk of physical harm and/or loss. Machinery, livestock, equipment and plant may be offered for sale and each of such items has its own natural risks that may affect the people attending the auction and thus people need to be aware of them. All persons attending the sale do so at their own risk (Oberndorf, 2004).
All buyers of items sold at the auction are advised to ensure that the items they have bought are in good condition and out of risks to health before they are moved from the auction to their homes. The seller does not accept any responsibility for any loss, harm or damage at all those that come to the auction do so at their own risk (Bapna & Chang, 2009). The seller’s agent is advised by the seller to carry out the sale in the manner intended for by the seller with items placed out and offered for sale as seller directs. The seller’s agent has no power over any items given out for sale and has no responsibility for any loss, harm or damage at all that the attendees may incur while at the auction as they enter the auction location at their own risk (REINSW, 2003).
The Consumer Protection Act, 2008 (Act No. 68 Of 2008) rules that is a business (in trade) provides you with consumer goods and you find out that they don’t function, fracture too easily or don’t perform what you anticipated them to do, then consumer guarantees for products under the Consumer Guarantees Act (CGA) may cover you.
Information Privacy Act 2009 an Act to offer safeguards for the treatment of personal information in the free sector environment, and to permits admission to adjustment of personal information. The records of all bidders remain a confidential report under strict laws (Oberndorf, 2004). Any information that is contained in the record of a bidder can only be displayed to NSW fair trading. A legalized investigator can make a request through writing to the agent asking to see the records of bidders. The seller is never allowed by the law to see or access any information from the records. Any information contained in the records of bidders must never be used for any other reason. It must never be used to contact the bidders and the details therein can never be revealed to anyone else as well as the seller (Reiner, et al., 2014).
This section of the paper would provide a detailed summary of the auction day procedure. The overall process that is undertaken in order to complete the auction day procedure is a fundamental role in order to understand the operations of the auction day. The action day procedure comprises of various processes and actions that are listed given below:
The auction equipment comprises of the tools and the other machineries that are utilized by the auctioneer in order to complete the process of auction in an effective manner. It is observed that the equipment required mainly comprises of the land that is being auctioned along with the various auxiliaries associated with the land like the machineries, house and the livestock that are within the land. The other equipment includes the small hammer called the gavel that is banged by the auctioneer on the rostrum or the table after the completion of the sales. The banging on the table indicates that the seller is satisfied with the price offered for the land and is sold to the highest bidder.
The other equipment involves the legal documents of the land that is being sold so that the bidder can have extensive knowledge and the legality about the land they are purchasing. It is essential that the rules of auction are clearly mentioned to the bidder as the process of audit is very fast. At least 30 minutes before the commencement of the auction, it is mandatory by law to display the documents of the property. As the auctioneer begins, the auctioneer announces the detailed information regarding the state laws that are in respect to the auction in general, the rules that are applicable. The laws of auction may vary from state to state.
During the process on the day of auction, there are various distractions and it is essential to be handled. It may happen that the bidders may arrive late and this may hamper the initiation of the auction. It might happen that certain important information with respect to the auction may not have been conveyed to the bidders and this might have an impact on the process of auction. Therefore, in order to rectify such potential distractions, it is essential that all the documents are conveyed to the bidder a day before the day of auction and the time of the auction is informed to the bidders so that they may arrive at the auction place on time thereby starting the auction on time.
There are various hazards that may be available in the functioning of the auction day and it is seen that due to certain natural calamities the auctioneer or the bidders may not arrive at the auction spot thereby postponing the auction day. The other hazards may include the violation of the building laws and unpaid taxes that may have an impact on the auction.
Marketing is one of the significant aspects that requires to be looked upon while completing an auction day. It is seen that marketing is undertaken few days before the auction day. The bidders gain knowledge about the auction with the help of proper advertising with the help of electronic media and other sources that could be influential in attracting the bidders. The marketing involves highlighting the land that will be auctioned and its various features. The marketers even contact potential bidders and communicate with them so that they get attracted to come to the auction.
The staffs and the employees have a significant role to play as it is seen that the employees and the staffs looks after the bidders and the auctioneers who are present on the auction day. The staffs entertain the requirements of the attendees and even assists them in several aspects where they require assistance and help.
It is essential to follow-up the losing bidders and the other bidders who are present on the day of auction. The follow up is done in order to gain the feedback of the attendees so that improvement of the operational activities can be undertaken. The bidders are even asked about whether they were satisfied with the reserve price and the process of bidding. The process of following up creates a healthy relation with the bidders and the auctioneers so that future business and auction can be undertaken.
A communication with the seller is even undertaken in order to settle on the reserve price that would be placed on the property during the day of auction so that the seller can receive the money that is so desired. During the process of the auction the auctioneer requires to keep in touch with the seller all the time so that in case the reserve price is not reached, the auctioneer by consulting with the seller can sell the property at a much lower price.
The reserve price is the hidden price that the seller is willing to agree for the property. It is the discretion of the seller to decide on the fact whether to agree on selling the property at a lower price than the reserve price and in case the bid goes above the reserve price, then the seller receives a profit. It is mainly seen that the seller generally meets their reserve price and they are sold to the highest bidder of the land.
Once the final bid is reached and the seller is happy with the price that has been reached the auctioneer announces “going once, going twice” and after the third announcement strikes the gavel claiming the the property has been sold as the no more bids have been offered. Thereafter the purchaser needs to sign the contract with the auctioneer and this is done only after an immediate deposit usually consisting of 10% of the purchasing price is paid. The balance amount is paid during the settlement and the stipulated time is given out by the auctioneer. Once the price has been paid, the property has been considered to be sold. After the completion of the auction the attendance present at the auction is recorded and stored so that a record and a knowledge about the auction day can be maintained.
Achita, M. & Tams, S., 2017. The role of auction duration in bidder strategies and auction prices. International Journal of Electronic Commerce, 21(1), pp. 71-102.
Andreas, V. & Reinhar, M., 2017. Auction schemes, biding strategies and the cost-optimal level of promoting renewable electricity in Germany. Energy Journal, 38(1), pp. 229-264.
Bapna, R. & Chang, S., 2009. Overlapping online auctions: empirical characterization of bidder strategies and auction prices. MIS Quarterly, 3 December, pp. 763-783.
Becherer, R. C. & Halstead, D., 2004. Characteristics and internet marketing strategies of online auction sellers. International Journal of Internet Marketing and Advertising, 1(1), pp. 24-37.
Bockstedt, J. & Goh, K., 2011. Seller strategies for differentiation in highly competitive online auction markets. Journal of Management Information Systems, 2(3), pp. 235-268.
Chen, P. & Liu, C., 2017. The optimal listing strategies in online auctions. Internation Economic Review, 58(2), pp. 421-437.
Ducarroz, C. & Yang, S., 2016. Understanding the impact of in-process promotional messages: an application to online auction. Journal of Marketing, 80(2), pp. 80-100.
Hougaard, J., Nielsen, K. & Papakonstantinou, A., 2016. A sealed bid two attribute yardstick auction without prior scoring. Group Decision & Negotiation, 25(4), pp. 827-843.
Lewis, D., 2000. Retailer thinks auction will smooth waters. Internet Week, 8(2), pp. 32-8.
Machlis, S., 2000. Online auction services thriving. Computer World, 32(24), pp. 1-17.
MetroAuctions, 2010. Conditions of sale by public auction – NSW. [Online]
Available at: https://static1.squarespace.com/static/57310bfa27d4bdb264fe4c28/t/578ea584d1758e8ac83ae42b/1468966276871/METRO+-+Conditions+of+Auction+-+NSW.pdf
[Accessed 2 August 2017].
Millman, H., 2010. Online auctions are changing the face of retail landscape. InfoWorld, 10(5), pp. 10-23.
Morales-Camargo, E., SADE, O. & Schnitzlein, C., 2013. Divisible goods auctions with asymmetric information: An experimental examination. Journal of Financial & Quantitative Analysis, 48(4), pp. 1271-1300.
NSWFairTrading, 2010. Auction conditions. [Online]
Available at: https://www.fairtrading.nsw.gov.au/ftw/Property_agents_and_managers/Rules_of_conduct/Real_estate_agents/Auction_conditions.page
[Accessed 2 August 2017].
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Oliver, R. W., 2002. Channels unlimited. Management Review, 88(5), pp. 12-13.
Reiner, J., Natter, M. & Skiera, B., 2014. The impact of buy-now features in pay-per-bid auctions. Journal of Management Information Systems, 31(2), pp. 77-104.
REINSW, 2003. Prescribed condition of sale. [Online]
Available at: https://www.reinsw.com.au/REINSW_Docs/Authorities%20and%20disclosuers/Prescribed_conditions_of_sale_by_auction_Warnings.pdf
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Wang, T. & Nekipelov, D., 2017. Inference and auction design in online advertising. Communications of the ACM, 60(7), pp. 70-79.
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