Not bad outcome if property passed in at auction

Not bad outcome if property passed in at auction

Of the 69 auction results listed in Core-Logic RP Data’s weekly auction report, 43 properties were passed in.

Auction Services WA director Ryan Thompson said one of people’s greatest fears was that their property would not sell under the hammer.

“The market place tends to worry about properties being passed in, but this is really just another stage of the auction process,” he said.

“An auction aims to get the best possible price in the shortest possible time and sometimes the sale occurs after the auction.

“For example, auctions are designed to attract buyers and encourage them to act, but not all buyers are in a position to bid on auction day.

“They may be a subject to finance buyer, or a subject to sale buyer and are genuinely interested in the property and want to make an offer, but cannot bid under auction conditions.”

Mr Thompson said these buyers hope that the property will be passed in so that they can have the opportunity to make an offer after the auction.

“There will even be auctions where there are no bidders, but several ‘subject to’ buyers waiting in the wings to compete for the property,” he said.

“In many instances, when a property is passed in, it will sell soon after the auction.”

Mr Thompson said when agents keep sellers informed about the potential outcome of the auction it can help relieve some of their concerns. “An agent should gather feedback during the campaign and let the seller know if any bidders are expected at the auction or if interested buyers are likely to be subject to finance or subject to sale,” he said.

“Similarly, the agent should encourage all interested buyers to attend the auction.

“If the property is passed in on a buyer bid, the agent will negotiate first with the highest bidder.

“But if the property is passed in on a vendor bid, all buyers can have the chance to put in an offer.

“If a buyer is not present, they will miss the chance to secure the property for themselves.”

Mr Thompson said it was also important to understand the market statistics.

“We can get carried away by hearing about high clearance rates, particularly in the eastern states, and people often think clearance rates refer to those properties sold under the hammer,” he said.

“However, they can include those properties sold before the auction, sold under the hammer and those that have been passed in and sold within 24 hours or even a couple of days of the auction.

If a property is passed in Mr Thompson advised sellers to keep calm and stay focused on the sale.

“Auctions can be very emotionally charged, but if your property is passed in remember that it’s not a bad outcome,” he said.

“If your agent has briefed you throughout the campaign you will have had an idea of what to expect, so listen to your agent and to the feedback about the auction, and be prepared to make some decisions.” n