What to do if Your Home Passes in at Auction?
Having your home not reach your reserve and get passed in can be a very stressful event. You have put months of work and lots of money into achieving a good auction result, only to come up short.
Although disappointing, it is not the end of the world. With a good agent and a plan, you will have a great chance of selling in the days after the auction.
Understanding why properties pass in can help you avoid the same fate and increase your chances of a sale on auction day, or even immediately afterwards.
The main reason that properties don’t reach their reserve are:
- Poor marketing
- Lack of follow up
- Changing market conditions
- Reserve set at above market expectations. (This is the most common)
If you are going to unction it is vitally important that you hire the right agent that has great local knowledge, a successful history of selling homes similar to yours and the ability to negotiate.
Make sure your price is realistic
Usually if you home is correctly priced and marketed, you will find a sale either on auction day or soon after. It just may take a little extra work to get buyers over the line.
Just because your property failed to reach the reserve, doesn’t mean you wont find a buyer.
Firstly – the highest bidder at the auction has the first right to enter into negotiations. If this is not successful, you can then open negotiations with other registered bidders and interested people.
Often, you may be able to negotiate a better price after your property is passed in at auction. If a sale is important to you, it is important to be open minded and flexible.
If you can’t negotiate a sale on auction day – You can then put the house immediately on the market for private sale.
Ask your agent to go back and contact every person who came through the showings. Your agent needs to be an expert negotiator and follow up all leads.
Many properties that are passed in sell on the same day, or during the week following the auction after negotiations with bidders.
If you can it is a good idea to try and reach a sale within 3 days of the auction. In many states this means that it is still being sold under auction conditions and thus there is no cooling off period and deposit needs to be paid immediately.
Having your home get passed in for under the reserve that you set, although quite disappointing, is not the end of the world. If you are flexible and realistic you may get it sold very shortly afterwards.