When the hammer comes down it’s sold - isn’t it? Picture: Thinkstock.

Or if you’re the one selling once bidders have gone past your reserve that’s the successful conclusion of the deal, isn’t it?

Well yes - but sometimes no.

As the owners of a home which went to auction in late October discovered it’s not over until the paper work is signed.

The highest bidder on the Glen Waverley property in Melbourne’s suburban east walked away from the $2.2 million purchase, when the sellers wouldn’t agree to a much longer settlement period.

The Glen Waverley home at the centre of the auction.Source:Supplied

Real Estate Institute of Queensland CEO Antonia Mercorella said by not signing a contract after an auction a buyer could try and walk away on the deal, but that didn’t mean that sellers had no recourse.

She said an auctioneer was authorised to sign on behalf of either party at auction which made the contract binding and she knew of cases where that had happened.

“I would not want to suggest that people come along and bid and then refuse to sign,’’ she said.

“Certainly if you are going to bid at an auction, you should assume if you are the highest bidder that you will absolutely be required to sign the contract (and go through with the purchase).’’

Ms Mercorella said anyone bidding at auction should make themselves well aware of conditions such as settlement periods and the amount of deposit before bidding, as it was too late to try and negotiate that after the sale.

“You need to get all your ducks in a row, before you show up,’’ she said.

When the hammer comes down, the deals done, isn’t it?Source:Supplied

While it doesn’t happen every week, buyer’s agent Patrick Bright said he’d heard of it before.

A buyer he was representing almost missed out on their purchase when immediately after the auction the sellers were not comfortable with the sale price.

He said the agent had convinced the sellers to knock their reserve down substantially during bidding - by hundreds of thousands - perhaps with the idea when the property was announced on the market, it would stimulate more bidding - it didn’t.

The parties eventually agreed on the sale, but Mr Bright said if the sellers had not finally signed the paper work there was nothing he could have done.

He said he had not meet an agent who was prepared to sign on behalf of a seller or buyer who refused to.

The best way to education yourself about the rules of actions and the process was to visit your local of Office of Fair Trading or Real Estate Institute website which should have all the information there.

Buyer’s agent Patrick Bright reckons there are four things you should ask yourself before bidding at auction.Source:Supplied

Things can start moving at a fast and furious pace at auction and if you haven’t seen many auctions in action it can all be a bit confusing, Mr Bright said.

He is shocked at how many people bid without setting a price limit and with no research on what the market value of a property may be.

These are the four things as a potential bidder you should ask yourself before you even turn up on the day.

WILL I BE ABLE TO KEEP A CLEAR HEAD WHEN IT’S MY MONEY ON THE LINE?

“Money brings up a lot of emotion for most of us. Even talking about money

makes most people uncomfortable,’’ he said.

“No one wants to be shown up as a loser and poor as well.’’

WILL I BE ABLE TO STICK TO MY LIMIT AND NOT BID EVEN A DOLLAR OVER MY MAXIMUM PRICE?

“Most bidders will already have put some money into the deal,’’ he said.

“They’ve paid for the pest and building inspections, paid for a solicitor to review the contract and have their deposit ready to go. So they also have something at stake and the last thing they want to do is to see any of their money go down the drain.’’

WILL I BE INTIMIDATED BY OTHER BIDDERS?

“Add in to the pressure cooker some peer pressure and you can start to see how quickly emotions can get out of control,’’ he said.

“When several people are in this state it can lead to a bidding frenzy. This occurs when buyers let their hearts (or egos) rule their heads.”

Mr Bright said many of us want to feel like winners, so when the hammer falls you will feel that you want to be holding the winning bid.

“It’s not uncommon for such frenzies to result in a sale price above fair market value. This is what all vendors and selling agents hope for.’’

CAN I PROJECT CONFIDENCE AND PLAY MY CARDS CLOSE TO MY CHEST ON AUCTION DAY?

“Most buyers think they can play a poker game on the day, however after seeing the actions of hundreds of inexperienced bidders at auctions over the years it would be negligent of me not to advise you to hire a trusted third party to bid on your behalf.

“If there is even the slightest risk that you could get carried away or lose focus then you need to hire a professional or engage a trusted friend to bid on your behalf. It will literally save you

thousands.’’