At property auctions, ‘off the wall bidding’ is where an auctioneer invents a bid to drive bids in the room higher towards the reserve price. It sounds bad but it isn’t. If the reserve price isn’t met then the bidder’s being pushed higher could not have bought the property anyway.
Property Expert Series: Andy Thompson From SDL Auctions
- Part 1: Introducing Andy Thompson from SDL Auctions
- Part 2: What Steps Should I Take Before I Buy A Property At Auction?
- Part 3: How Do Property Auctions Work?
- Part 4: What Is A Reserve Price?
- Part 5: What Exactly Is In The Legal Pack?
- Part 6: Are Property Auctions Better For Buyers Or For Sellers?
- Part 7: An Introduction To Buying BMV Property At Auction
- Part 8: What Is Off The Wall Bidding?
- Part 9: Does It Matter Where I Sit?
- Part 10: What Are The Costs To Buyers And Sellers?
Off The Wall Bidding
Amy: Can you tell me what the term, ‘bidding off the wall‘, means?
Andy: “Off the wall bidding”, is an auctioneer’s term. It is where an auctioneer will make up a bid, essentially.
People, when you first say what it is, think it’s a bit underhand but I’ll explain it and why it makes sense.
So, obviously, a property auction only works if there’s more than one person bidding on a property and, as we’ve covered, there will be a reserve price that secures for the seller, an amount that we can’t sell below.
So, the auctioneer is allowed to do what’s called, ‘bidding off the wall’.
As long as it’s below the reserve price, they can invent a bid, to encourage other people to bid.
So, if you were selling a house for £100,000 and the reserve was £100,000. If there was a bid of £90,000 but there was nobody else to bid, then you, as an auctioneer, could bid off the wall.
There’s no other way of getting that person from £90,000 to the £100,000 that we could actually sell it for.
And we don’t know, the bidder might be prepared to pay £120,000 for example.
So, what the auctioneer would do is bid off the wall at 95,000, after which, the genuine bid in the room would be up to 100.
And at that point, we’re able to sell the property. I can’t stress this enough… that only happens below the reserve price.
So, we’re not making somebody pay more money than they could have done otherwise. So, that bid at 90 could never buy the house because it was on reserve at 100.
So, it’s a very fair and honest way. Not a lot of people know it’s happening. The auctioneer acknowledges a bid that didn’t happen pointing to ‘the gentleman over there with the glasses’, and ultimately, there’s isn’t a man with glasses there at all.
Join Our FREE Property Training Course Today
Sign up for our free online property training course today.
In there we cover a range of different property strategies to help you get started on building a long-term property portfolio or creating a cash flowing property business.
We also look at ways to increase your return on investment with any of the properties you may be considering and we also have a couple of cheat sheets and downloadable documents in there as well.
Just click the image below to join our free training course today.
If you have any questions or thoughts about off the wall bidding or property auctions more generally then leave them in the comments section below.
Alternatively, you can get in touch via our Facebook page.
We’d love to hear from you and as always we’re happy to help.