What happens when a property passes in at auction?
When a property passes in at auction, it’s not a disaster. In fact, it could be a blessing in disguise – for everyone involved. When the top buyer’s bid doesn’t meet the seller’s expectations, the auction may stop – but the sale is far from over. The parties talk, negotiations ensue, and a private sale may generate the best price for all. So, if the property at your auction gets passed in, what should you do? We’re sharing our best advice, for sellers and buyers alike.
First thing’s first: what does it mean when a property passes in?
Not every auction closes with a “Going once… Going twice… Gone!”
Because sometimes, the highest bid doesn’t meet the seller’s reserve price. In this case, the auction ends – but not the sale.
The highest bidder will have first right to buy the property at the reserve price. And if the seller doesn’t accept? The agent is free to negotiate with any other interested party – so if you’re a keen buyer at an auction, introduce yourself to the agent early on!
Other times, there’s no bidding at an auction, and the property passes in on a vendor bid. This is when agents will approach any other party at the auction to explore their options.
If the property is still up for grabs after that, the seller can always re-auction at a later date – a strategy that can be incredibly successful. Especially when you combine it with a refreshed price guide and revitalised marketing campaign.
And don’t forget, private sale is always an option.
Whether you’re buying a property or selling one, be sure to keep our 5 top tips in mind through it all.
1. Reframe your mindset
We’ve been running auctions for almost 40 years. So we can tell you for certain: properties do sell after auction. Sometimes even that day – or a few days later.
So if yours has been passed in, all hope is not lost.
There can even be a higher chance of a better result post-auction. In that case, the agent will pass in a property – strategically.
It doesn’t mean that there’s anything wrong with it. So buyers, there’s still a beautiful property up for grabs.
Trust your agent’s expert advice – they know what they’re doing!
Our advice to the seller: Don’t give up.
Our advice to the buyer: Don’t assume the worst.
2. Preparation – and persistence – are key
Every great sale has a great contingency plan.
Because when you’ve already thought three steps ahead, you can preserve your much-needed energy in the present. Negotiations are very exciting – but they can also be tiring.
Sellers and buyers alike need to consider all possibilities before arriving at auction.
Buyers who’ve already considered their budget and back-up plan won’t waste any time during negotiations. They know what they want; they know what they can afford.
And sellers who are open and ready to compromise can proactively turn that pass-in into a purchase. Through making repairs to the property or being willing to lower their reserve.
Most importantly? Be persistent. The greatest opportunities – and successes – come to those who keep going. And who keep showing up!
Our advice to the seller: Prepare a plan with your agent.
Our advice to the buyer: Manage your expectations and be willing to adapt.
3. Do your homework
When a property you’re selling or buying gets passed in at auction, remember the three Rs: regroup, reassess, research.
Because if a buyer or seller hasn’t researched the market conditions when their property gets passed in, how can they make informed decisions?
Buyers, you can’t just throw around numbers that aren’t grounded in reality. You need to know what the property is worth – and what your budget is – so you can make a reasonable counteroffer.
And to all the sellers out there? You’ve got to suss out the competition! If your property doesn’t look as attractive as similar properties in your area, you’ll need to adjust your marketing and advertising approach.
Research is one of the most important aspects of buying and selling a property. So embrace your inner ‘nosey neighbour’, hit the books – and know for sure where the property stands in the market.
Our advice to the seller: Make changes to your marketing strategy to amplify your advertising.
Our advice to the buyer: Research deeply to fully assess the opportunity.
4. Make sure the price is right
Okay, time for a hard truth: sometimes the price you want at the start of the auction simply isn’t realistic – for buyers and sellers alike.
So when your property (or property-to-be) gets passed in, why not do a little re-evaluating?
Sellers: Is your reserve realistic? Could you make your property even more appealing – and more attractive to buyers – by adjusting your reserve price?
And buyers: Is your offer fair? If you slightly adjusted your offer, could you lock in the sale?
Our advice to the seller: Let your agent guide you – they’re the expert!
Our advice to the buyer: Review and revise your offer.
5. Come to the table
We hope you’ve brushed up on your negotiation skills. Because when your property gets passed in, it’s time to negotiate the sale. Which means compromise – and understanding.
A constructive negotiation will reflect the current market conditions and each person’s specific needs and preferences.
If both buyer and seller are positive, prepared and well-informed, you can negotiate an offer that is financially beneficial for everyone.
And at that point, you’ll be glad you waited until after the auction to make the sale!
Our advice to the seller and buyer: Go with your agent’s flow – they know what they’re doing.
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