It is important to understand the auction process and understand the language. Here are a few quick tips:
Reserve price – before the auction, the vendor (seller) will set a price with the auctioneer that is the minimum price they will accept. If the reserve price isn’t reached during bidding, the auctioneer will privately ask the vendor if they will sell at a lower price.
Passed in – if bids do not meet the vendor’s reserve price, the auctioneer will seek more bids. If bids still do not meet the reserve, the property may be ‘passed in’ or ‘withdrawn from auction’. The highest bidder then gets first right to negotiate with the seller.
Fall of the hammer – towards the end of the auction, the auctioneer will call for any final bids. Once there are no more bids, the auctioneer will count down the ‘fall of the hammer’, which will signal the end of the auction. No bids can be made after the fall of the hammer and the highest bidder is legally obliged to sign and exchange contracts.