What happens if it passes in?

What happens if it passes in?

People often assume that when a property passes in on auction day, it will eventually
sell for a poor price.

This is largely just a myth. We can show you recent examples of high-quality properties
across the Eastern Suburbs that passed in at auction then sold within 10-14 days for
their reserve price or even better.

If your property is correctly priced, well-presented and expertly marketed from day one,
then passing it in only means your sale is going to take a bit longer. There is no reason
for a price adjustment and we will simply keep working to achieve a great sale price for
you.

The likelihood of your property passing in increases when the market is soft and buyer
demand is lower.

For example, during the Sydney boom of 2012-2017, weekend auction clearance rates
were 70-80%, meaning up to eight out of every 10 homes that went under the hammer
sold at auction. In 2018, the market changed dramatically and by year’s end, clearance
rates were 40-50%.

Many properties that passed in were priced correctly and marketed well by the agent
but there simply wasn’t enough buyer competition to achieve a sale at auction.

The main reasons for this were the cooling market, with many buyers holding back and
waiting for prices to drop further; and severely restricted lending criteria which meant
many buyers simply couldn’t get their finance ready in time to bid at auction.

At Ann Paterson Real Estate, we know how stressful selling your home can be and we
also know how to negotiate well if your property has passed in at auction.
Here is what we’ll do if your property passes in…

1. On auction day, it is common for buyers to approach the agent for a private
   discussion and negotiation immediately after the auction. Some people dislike buying at
   auction and won’t raise their hand unless someone else bids first.
2. If no offers are received, we will contact the buyers who registered to bid at your
   auction to discuss why they didn’t bid or didn’t bid high enough to reach reserve.
   
   
3. We will contact other buyers who didn’t register but showed good interest in your
   home during the campaign, to discuss why they did not register on auction day.
   
   
4. This process will help us identify your best buyers from the current batch of
   interested parties. Currently, many buyers are telling us they need more time because
   the banks are taking much longer to approve loans, while others are waiting to sell first.
   
   
5. After auction day, your property will be advertised as a private treaty listing,
   usually with a set asking price. We will continue to advertise it online while we follow up
   with buyers.
   
   
6. New buyers are entering the market every week, so there is every chance we will
   have new buyer enquiry post-auction.
   
   
7. If all buyer feedback indicates your property is not going to sell at its current
   asking price, we will discuss a price adjustment. Getting the pricing right on day one
   means we shouldn’t need to do this, unless the market has shifted during your
   campaign.
   
   
8. We will also consider your property’s presentation. Good presentation gives
   buyers confidence in the quality of your home. New photos and a new look can re-
   engage old buyers and attract new ones.
   
   
9. We will also consider your marketing. Online-only campaigns do not reach every
   buyer, so you might want to invest in print advertising or social media to boost
   promotion.
   
   
10. We might consider taking your property off the market then re-launching it as a fresh listing,
    usually with some tweaks such as extra photos and opens at a different time of day.
    You can go to auction again or choose private treaty.

Many vendors worry about their properties passing in, especially in soft markets. Some
owners assume it’s better to sell via private treaty but there are still advantages to the
auction method.

The most important advantage is that it sets a timeframe for buyers. Data from Domain
Research shows auction properties sell faster than private treaties, even if they pass in
at auction and the market is soft.

A survey conducted in September 2018 showed houses in Sydney that sold post-
the auction was on the market for an average of 46 days, with apartments at 49 days.

Houses sold via private treaty averaged 68 days on the market, with apartments 70.

To find out more about buying and selling at auction, contact Ann Paterson Real Estate.