Do passed-in properties sell after auction?
9 Aug, 2018
By Justin Nickerson
Justin Nickerson, director of Apollo Auctions and Carla Fetter, Partner at Jellis Craig discuss what vendors and buyers should know about passed-in properties.
Passed in properties can leave vendors in fear that they won’t sell, or if they do sell, it will be for a lower amount than they are after.
Justin Nickerson, director of Apollo Auctions told WILLIAMS MEDIA the amount of properties that pass in varies across Australia.
“In Brisbane it’s about half of properties, and in Sydney and Melbourne where the markets are hot it is about 20 per cent.”
Mr Nickersen said passed in properties do sell for above the reserve price as buyers enter another competitive environment after the auction.
However, other times after auction the best money from the seller at the table is the one they presented during auction, and the owner settles.
Carla Fetter, Partner at Jellis Craig said there is always a list of people she approaches if a property passes in.
“It isn’t all that common to run a campaign with no interested buyers.
“Sometimes no buyers bid, but it doesn’t mean they aren’t interested.
“We will ask why they didn’t bid, they will give reasons, and we will negotiate,” Ms Fetter told WILLIAMS MEDIA.
She explained that normally around 50 groups of people will come through during a campaign, with anywhere from one to five buyers.
After an auction is passed in she will target the prospective buyers, and if that falls through go back to the original 45 and discuss further interest.
Ms Fetter said if there are multiple buyers and they didn’t put their hand up and bid, the next 24 hours are critical.
“If the buyers are present at the auction we would end up selling to one in the next 24 hours 70-80 per cent of the time, and the other 20 per cent of the time looking for a buyer in the next week.”
“I find the most important thing is finding buyers who are ready. Those who have their finances organised, are comfortable about the market, and are aware of what they are looking for,” she continued.
“On the other side we need vendors who are realistic. They can have set expectations, but need to listen to the market.”
“Vendors who are realistic usually sell on the day of the auction or close to it. Unrealistic vendors need more time in the market to find the buyer or the price.”
Mr Nickersen said really good agents will have their sellers in a strong position, with a clear understanding of what will happen post auction.
“Part of the pre auction meeting should include briefing the owner on who the buyers are, and the situation.”
“If the agent doesn’t explain the situation, the seller can definitely have misconceptions about what will happen after auction.”
Related reading: Online auctions will never replace traditional ones
Mr Nickersen also said buyers sometimes miss that you have to strike quickly after auction, as there is small window until the price becomes available on portals.
“Buyers are better of doing something quickly, as when the price gets out it can be really good, which can create more competition.”