Selling a property at auction is often a fast-paced, high-stakes event that many sellers hope will result in a successful sale. However, not every property sells under the hammer. If your property doesn’t sell at auction – referred to as “passing in” – you’re certainly not out of options. In fact, there are several paths you can take to still secure a sale, sometimes even at a better price than initially anticipated.
Let’s explore what happens if your property passes in at auction and the strategies available to sellers afterward.
What Does It Mean When a Property “Passes In”?
When a property passes in at auction, it simply means that the highest bid did not meet the reserve price – the minimum amount the seller is willing to accept. This doesn’t mean the property won’t sell; it just means the sale hasn’t been finalised at auction. At this point, the highest bidder typically has the first right to negotiate with the seller privately.
Post-Auction Negotiations
One of the most common next steps after a property passes in is post-auction negotiations. The highest bidder at the auction has an exclusive opportunity to negotiate with the seller, often resulting in a private sale. These negotiations can be more flexible and less pressured than the bidding environment, allowing both parties to come to an agreement on terms that might not have been achievable during the auction.
If the negotiations with the highest bidder fall through, sellers can open discussions with other interested parties. Often, buyers who were hesitant to bid at auction become more engaged during this phase, as they now have the opportunity to negotiate privately.
Listing the Property for Private Sale
If the property doesn’t sell through post-auction negotiations, the next logical step is to list it for private sale. Private sales give sellers more control over the process, allowing them to field offers over time, rather than facing the constraints of an auction. Additionally, listing the property for private sale can open up the opportunity for a wider range of buyers who may not have been available or interested during the auction period. The key to success with a private sale is setting a competitive price, marketing the property effectively, and maintaining the property’s presentation – just as you would pre-auction.
Adjusting the Reserve Price
If the property passed in because the reserve price was set too high, sellers may want to reassess their expectations. Lowering the reserve or asking price could attract more buyers and increase the chances of selling. A price adjustment doesn’t necessarily mean a huge financial compromise; sometimes even a small reduction can create new interest and bring in fresh offers.
Re-auctioning the Property
Another option is to take the property to auction again. This strategy can be effective if the initial auction had limited bidders or was affected by external factors such as poor weather or a holiday weekend. To maximise the chances of success at a second auction, it’s important to learn from the first experience – perhaps adjusting the marketing approach, re-evaluating the reserve price, or even ensuring the property is presented in its best possible condition.
Sellers might also benefit from sprucing up the property with pre auction cleaning to make sure it stands out and attracts potential buyers. A thoroughly cleaned and well-presented home can make a significant difference in how the property is perceived, both in person and in marketing materials.
Rent the Property Out
In some cases, if the property isn’t selling, it may make sense to rent it out temporarily. This option can provide a steady stream of income while the market improves, or until the seller is ready to try selling again. In certain markets, renting may even prove to be a more profitable option than selling, particularly if rental demand is high in the area.
If your property doesn’t sell at auction, don’t panic – you still have multiple avenues to explore, from post-auction negotiations to listing the property for private sale, adjusting the price, or even considering a second auction
Each of these strategies offers its own potential benefits, allowing you to find the right path to achieving a successful sale. As with any property sale, presentation is key. Whether you’re going to auction or listing for private sale, ensuring your home looks its best with services like pre auction cleaning can make a significant difference in attracting the right buyers. The more appealing your property looks, the better your chances of securing the sale you want.