Bidder
Synonyms: Auction Participant، Competitor (REGA term)، Offeror، Auction Bidder
Last updated: 2026-09-25
Short Definition
A bidder is the natural or legal person who submits price offers in a real estate auction in order to buy the property, its usufruct or a lease of it; REGA's Real Estate Auctions Regulation calls this person a «competitor», and each bid binds the bidder until it is outbid or the auction closes.
Overview
Legal Basis
The bidder's position is governed by Article 39 of the Civil Transactions Law, issued by Royal Decree No. (M/191) dated 29/11/1444H: an auction contract is concluded only upon award, and a bid lapses when a higher bid is made even if that bid is void. Article 356 bars agents, brokers and experts from buying for themselves, even at auction, property they were entrusted to sell or value. In judicial sales, the Execution Law issued by Royal Decree No. (M/53) dated 13/8/1433H provides for bidder qualification and proof of solvency (Art. 49), resale at the defaulting buyer's responsibility (Art. 50/3), a ban on influencing auction prices (Art. 51), and imprisonment of up to three years for deliberately influencing the price (Art. 91/3). Under the new Execution Law (M/237), the penalty (Art. 53/4) becomes up to three years' imprisonment and/or a fine of up to SAR 100,000. Article 2 of REGA's Real Estate Auctions Regulation requires platforms to connect to Nafath.
Practical Example
Khalid registers through Nafath on a licensed e-auction platform to bid for a Jeddah apartment appraised at SAR 800,000, paying the required entry amount of SAR 40,000 (5%), designated as a refundable security. Bidding opens at SAR 700,000; Khalid raises his bid to SAR 845,000, another bidder offers SAR 850,000, and Khalid's bid lapses automatically. No one outbids within the set time, so the apartment is awarded to the other bidder. The establishment refunds Khalid's SAR 40,000 within three working days, as the regulation requires. Had the winner defaulted in a judicial auction, the apartment would have been resold at his responsibility and he would have borne any shortfall in price.
Common Mistakes
- ✗Bidding without checking one's ability to pay quickly — judicial auctions require payment within a short period, and default leads to resale at the bidder's expense.
- ✗Assuming a bid can be withdrawn after it is placed — a bid binds until outbid or until the auction closes.
- ✗Agreeing with other bidders not to raise the price — prohibited collusion punishable by imprisonment under the Execution Law.
- ✗A broker or valuer bidding on property they were entrusted to sell or value — prohibited by Article 356 of the Civil Transactions Law.
- ✗Ignoring whether the entry amount is earnest money, an advance on the price or a refundable security — each has different consequences if the bidder withdraws.
International Differences
Bidder obligations are broadly similar worldwide: a binding bid, a security before participating and prompt payment after the award. In the United Kingdom a successful bid at a traditional auction usually means immediate exchange of contracts and a deposit paid on the day. In Turkey, participants in electronic enforcement auctions must lodge a security (teminat) before bidding. In the UAE, auction companies require prior registration and a security deposit. The Saudi system is distinctive in linking the bidder's identity to Nafath and in expressly criminalizing price manipulation in the Execution Law.
