Hundreds of properties go under the hammer each and every week. Of this group, around half actually get sold under the hammer. The remainders are either sold prior to the auction or passed in. When committing to the auction process it is important to remember that getting passed in is not the end of the world, and that you can still receive an amazing price for your property if the auction falls through. There may be a few factors that influenced buyers to refrain from purchasing under auction conditions. iThink Sales and Marketing Agent Adam Boettcher has complied a list of all the factors that influence this outcome, ways you can overcome it and how to get an amazing price for your passed in property.
FACTORS INFLUENCING THE POTENTIAL BUYER
- Finance and Settlement dates – The auction method of sale has several conditions to meet. These include: a 10% deposit, 30-day settlement and the sale are not subject to building and pest, or finance. This could hinder the potential buyers as they might only be able to purchase the property if their bank loan is approved. They also might need to negotiate settlement dates or request a longer settlement period.
- Lack of competing bidders – if there are only a handful of bidders in the room it is extremely hard to get the ball rolling. If there are multiple keen bidders, the competition makes it easier to keep creeping up to meet the reserve. Lack of competing bidders could come down to several factors such as price, clauses and conditions.
REASONS YOU DIDN’T REACH RESERVE
Two common reasons properties get passed in are:
- Price – In many cases, properties get passed in because the reserve price was too high. To make sure you are pricing your property correctly, ensure you are listening to your agent’s advice and take into consideration their original price at appraisal.
- Presentation – One other factor that affects the sale is the presentation of the property. This goes hand in hand with the price. If the property has been poorly presented in the marketing photos, yet the reserve is set quite high, it just doesn’t add up for serious buyers.
Source: If the Auction Fails…
HOW TO SELL YOUR ‘PASSED IN’ PROPERTY AS SOON AS POSSIBLE
In our experience, if your property doesn’t sell at Auction, it’s usually not long before it does. You may have some conditional interested parties – that’s buyers who want to put up an offer with conditions attached i.e. subject to finance etc. If you don’t have any offers coming in post Auction remember the below:
- Maintain good contact and communication with your agent – Although the agent couldn’t sell your property under the auction conditions, don’t be quick to drop them and go to another agency. Remember that this agent has been with you for the entire process and any good agent will be willing to see it through to the sale. Trust your agent, as they know the property, they have a list of interested parties and they would have developed a plan to sell this property, whether it was under the hammer or not. After the auction is it also important to have a meeting with your agent to ask any questions about the process and what happens next.
- Reconsider the price – Due to the fact that price is a major influence on bidder’s willingness to put in an offer, it might be worthwhile to revisit the reserve price. This will also help determine a listing price. You can also go back and assess the price of the bids that were made on auction day. This will give you an indication of what buyers are willing to pay.
- Chase lingering interest – Be sure to follow-up with the bidders that were at the auction and discuss any options. They might put in a counter offer.
- Revisit the marketing campaign – This may include new marketing photographs, more social media plugs, newspaper ads etc. You might have to invest more money into this element, however it should pay off in the long run.
At iThink Property we like to do Real Estate different and our Auction events are really like no other. We host community inclusive Auction events at popular local venues held under the stars. They are creating a real buzz in the local community and more importantly for the properties we are looking to auction. Our Auction Events are also generating some outstanding results for our sellers and buyers. We strongly believe in the auction process; it brings all potential buyers out of the woodwork and generally results in a quicker, less complicated sales process.
If you would like to check it out for yourself, please come along to one of our upcoming events.
- Toowoomba Auction – 482 Ruthven St, Toowoomba – 17thAugust at 6pm
For more detailed information on the property market and managing your investment, our iThink Property Real Estate Agents and Property Mangement Team in Ipswich and Toowoomba would be happy to assist.
SALES AND MARKETING AGENT – ADAM BOETTCHER
0417 208 898
Adam brings an extensive sales history to his role as a Sales and Marketing specialist at iThink Property. Adam specialises in Residential Sales and has been personally involved in hundreds of transactions over the last several years with the majority of these via successfully run Auction campaigns.
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