Simultaneous Bids at Auction - Strategy for Inner West

Auction breakdown: when bidding slows and the property passes in

Attending a recent auction in Sydney’s Inner West gave an interesting look at what can happen when an auction takes time, pauses, and negotiation to reach an outcome.

Here is a breakdown for buyers 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.

Another buyer quickly countered with a bid of $3 million.

After an initial flurry of bids from three buyers, the pace slowed. This triggered discussions between the agent and potential buyers, which led to an increased bid of $3.1 million.

Bid progression

Bids continued between parties in smaller increments, eventually reaching $3.225 million.

At this point, one bidder asked whether the property was “on the market”. This is a common question, usually asked when bidders are waiting to see whether the reserve price has been reached.

The agent advised that the property was not yet on the market.

Bidding continued, pushing the price to $3.275 million, followed by another pause for discussions between the agent, vendor, and bidders.

Mid-auction discussions

During the auction, there were pauses that allowed for negotiation and reassessment between the bidders, agent, and vendor.

This often happens when bidding slows. It gives each party a moment to consider their next move and decide whether they are prepared to keep going.

Auction conclusion

The auction concluded with the property being passed in at $3.375 million after a final $50,000 bid increase.

When a property passes in

A property is considered “passed in” when the highest bid does not reach the vendor’s reserve price.

When this happens, the property usually moves into private negotiations after the auction.

If an agreement is not reached on the day or in the days that follow, the property may then be offered for sale by private treaty.

Key takeaways for buyers

Thinking on your feet

A change in auction pace can require quick decisions. Buyers need to understand what they are prepared to do before the auction starts.

Importance of strategy

Knowing your limit before auction day is important. Understanding when to bid, when to pause, and how to respond can also shape the outcome.

Prepare for the property passing in

If the property passes in to you, be ready to negotiate. Having a negotiation strategy prepared before the auction can make the next steps much easier.

‍