The Property Source
Attending a recent auction in Sydney's Inner West provides an interesting look into auctions that take time and massaging to obtain a result. Here is a breakdown of the auction for those looking to purchase in this competitive market.
Auction Start
The auction opened with a bid of $2.9 million (which was below the guide price), with a quick counter bid of $3 million from another buyer.
Following an initial flurry of bids from three bidders, the pace slowed, which triggered discussions between the agent and potential buyers. This led to extracting an increased bid of $3.1 million.
Bid Progression
Bids continued between parties in smaller increments, reaching $3.225 million. A bidder inquired if the property was “on the market”, which is a common question, typically when bidders are waiting in anticipation of reaching the reserve price.
The agent informed the bidders the property was not yet on the market. The bidding continued, pushing the price up to $3.275 million, followed by a pause for further discussions between agent, vendor and bidders.
Mid-Auction Discussions
During the auction, there were pauses that allowed for negotiation and strategy reassessment among the bidders, the agent, and the vendor. This is a typical aspect of auctions when the bidding slows, providing a moment for all parties to consider their next moves.
Auction Conclusion
The auction concluded with the property being passed in at $3.375 million after a final bid increase of $50k was made.
When a Property Passes in
A property is considered "passed in" if the highest bid fails to reach the vendor's reserve price. In such cases, the property enters private negotiations following the auction. If agreement is not reached on the day of the auction or in the subsequent days, it is common for the property to then be offered for sale via private treaty.
Key Takeaways for Buyers
- Thinking on your feet: The change in pace throughout the auction tells us buyers need to make quick decisions about their next move.
- Importance of strategy: Know your limit before attending the auction and understanding the timing can be crucial for making strategic bids.
- Be prepared for a property passing in: Prepare your negotiation strategy in advance if the property passes in to you.
Written by: Rhiannan Jenkins, Buyer's Agent - Sourced Property