What to do if your property is passed in at Auction
It can be a very frustrating experience to have your property passed in at auction. The lead up to and auction themselves are often emotion-charged experiences and after all of that it can be hugely anticlimactic if the property does not sell at all.
Realistically, the possibility that your property may be passed in should be a consideration when you are initially choosing an agent - you need to feel confident in the agent’s ability to negotiate the best deal on your behalf should your auction be unsuccessful.
So, what are you to do if the possibility becomes a reality - your property is passed in at auction?
The first step is not to worry – the result is not necessarily a bad one. The good news is that the majority of homes will go on to be sold afterwards, if not in the hours immediately post-auction then usually in the days following. Many prospective buyers will even increase their offering from what was bid at auction in order to secure the property, sometimes reaching the reserve price.
It is therefore important to stay calm and focussed – you are still going to be called on to make decisions and to do so requires a clear head.
It is usually the case, and the law in some Australian states, that the first right of negotiation after a property has been passed in rests with the highest bidder. These discussions invariably start directly after the auction has finished with your agent acting on your behalf.
It is important to go into these preliminary negotiations with somewhat of an understanding as to why your property did not sell. For example, you may have set a reserve price that is deemed to be higher than market value, and thus buyers were not prepared to meet it. Having a general idea (aided by your agent’s advice) should help you to better reach a settlement that is favourable to you as well as being realistic.
Depending on your need to sell, it will also be important to go into these discussions prepared to negotiate. You want the best price; however your property may also have been sitting on the market for a fair amount of time, or you could be financially committed to another property that requires funding to settle. It is important that your agent is aware of your situation and the importance of achieving a sale, keeping these in mind throughout their negotiations with potential buyers.
Remember that your agent is looking out for your interests and wants to achieve the best possible sale price for you. Accept that your agent knows the area and market conditions, and try to take their advice in situations where you are unsure as to what will be the best action to take.
In the end, it is a possibility that every auction could end with the property in question being passed in. Just remember to stay calm and focused throughout the negotiations that take place afterwards and, with the help of your agent, you should be able to achieve a satisfactory sale.