A vendor bid is a bid made by the auctioneer on behalf of the seller (the vendor) during an auction. It is not a genuine bidder’s offer to buy the property; instead, it is used to stimulate or sustain bidding, or to help the seller reach a reserve price. The auctioneer must clearly announce when a bid is a vendor bid, and there are rules about when and how it can be used (for example, it cannot be made over the reserve price or used without proper identification). Key points to know:

• Purpose: To start bidding, keep bidding moving, or help reach the reserve price.
• Identification: The auctioneer must explicitly declare a vendor bid as such.
• Limits: Vendor bids are typically allowed only if a reserve price exists and hasn’t been met; they cannot accompany bids at or above the reserve price, and they should not be used to manipulate the bidding unethically (e.g., dummy or shill bidding is generally illegal in many jurisdictions).
• Non-binding on sale: A vendor bid does not imply sale at that bid; it is part of the process to reach a price acceptable to the seller.
• Post-auction: If the property passes in (fails to meet the reserve), the highest genuine bidder generally gets the first opportunity to negotiate with the seller; vendor bids disclosed as such cannot be cited as the final sale price.

If you’d like, I can tailor this to a specific jurisdiction (e.g., Australia, New Zealand, or another country) since rules about vendor bids can vary by region.