For buyers and sellers, there are few moments more disheartening than seeing a property pass in after auction. Both parties have plenty to lose in this situation with the next stop a round of often daunting negotiations. But take heart! Post-auction discussions often end in great satisfaction for everyone involved.
“Passed in” explained
A property passed in is a no-win scenario for buyers and sellers, with neither pleased about the price – the buyer because it’s too high and the seller because it’s not high enough, having barely, or only just reached, their reserve. But if you’re the buyer who offered the highest bid, you have the first rights to the home. And for vendors, there is still a high chance of still selling your house for a top price.
Buyer tips
Firstly, don’t be intimidated by switching from a public auction to a one-on-one discussion with a real estate agent. And when you’re already tense and on edge after the auction, it can be difficult to remain cool, calm and collected when negotiating. Yet it’s important to do so.
If you’ve never negotiated about anything before, try practicing this skill with friends or family before the auction. Admittedly, we as real estate agents, are keen to sell this property to you and satisfy our vendors; however, feel free to ask us plenty of questions.
For starters, you can ask us what the reserve price is although remember, the vendor is under no obligation to tell you this information. Other good questions include why the vendor is selling; if they’ve already bought another home; and why we think the property passed in. Ensure you’ve done your research and that you know the value of similar properties in the area.
If you and the vendor agree on a price, the house will be yours. Auction conditions still apply to this sale though, so there won’t be a cooling off period. You can walk away from negotiations at any time but bear in mind that if your best offer isn’t accepted, we’ll begin negotiations with other buyers; alternatively, the vendor might decide to offer their house for private sale or take if off the market altogether.
Relating reading:
Seller advice
We all want more cash in our hip pocket but that doesn’t mean you should be unrealistic about your perfect property price. A prohibitive reserve can quickly deter even the keenest buyer so do your research on similar house sales and property values in your region.
Employ a highly capable and confident negotiator as your agent. We’re well known for this skill set for a reason – it’s crucial to sealing a dream deal with buyers. Don’t despair if your home doesn’t sell to the highest bidder as there is every chance it will be snapped up, either amidst negotiations or shortly afterwards.
But take the cost of re-listing your house into consideration, while also reflecting on whether a change in marketing or presentation could give it a better sales chance.
Content originally appeared on The Real Estate Voice
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