For those that don’t know – in most (but not all) states in Australia, if someone wishes to bid on an auction property, they must provide suitable identifying evidence to bid, and those details are retained next to an assigned number by the agency. 

The lack of this process was highlighted in a recent story where a “bidder” – and I use that word loosely – did a runner at an auction after placing the highest bid.

Like a thief in the night, but this was during the day, he scampered off, leaving the auction in disarray and the sellers reportedly significantly out of pocket because the previous bid was some $100,000 less.

Because there is no mandatory bidder registration in that state, no one has any idea who this person is.

Registration benefits everyone

Clearly, bidder registration is a no-brainer because everyone benefits from it. Sellers benefit because they don’t have a situation like this where someone does a runner and you have no idea who they were.

However, with an auction process that requires bidder registration, vendors can also legally pursue them more easily.

That’s because that person is committed to the contract from bidding in the auction, their identification details have been provided, and, in Queensland, the auctioneer can even sign on their behalf if they do run for the hills.

The seller can then discuss their legal options if the buyer does not complete the contract, including payment of the difference between their bid and the actual sale price that was achieved.

Buyers benefit because they know they are competing against other genuine bidders who have handed over their licence as identification.

And the agents and auctioneers clearly benefit because they know before the auction starts exactly how many people are there to buy the property.

It’s one of those rare things that everyone benefits from this legislation.

Quick and simple process

Auction registration has been in force in Queensland, for example, for a number of years now and has proved to a simple and quick process for everyone. In fact, it does beggar belief that you don’t need to show identification in some states to potentially buy a property at auction when you need to show it to sign up for a new mobile phone plan.

The push-back against the concept in other states seems to be that it would be “too hard” to instigate because that was the way it always had been done.

However, in reality, bidders only need to get there a minute earlier to show their license, sign a form and be given a paddle to use during the bidding. That’s not a difficult thing to do.

In New Zealand, bidder registration is also not mandatory but is considered best practice by many agencies.

As an auctioneer, because bidders don’t need to use a paddle in Victoria either, it can be particularly tricky to record the bids – let alone recording the details of who placed each one.

Instead of simply recording “$680,000 to 23”, they probably need to write “$680,000 to the man with the red hair and grey coat!”

This situation adds weight to the need for national auction licensing – especially since more and more people are buying across borders.

I can just imagine someone who is used to bidding in Brisbane is at an auction in Melbourne being very confused. While a seller in the same situation would likely feel exposed because no one truly knows how many bidders are serious buyers on the day – let alone who they actually are.

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