How To Navigate The Auction Pass In.

We know you’ve been preparing your outfit in preparation for your big social media announcement, visualising yourself popping bottles in celebration… But before we get ahead of ourselves, let's prepare for game day first shall we? 

Specifically, what you plan to do if you are the highest bidder, but the auction has not yet reached the vendors reserve and the property is passed in to you. The agent approaches and leads you inside to negotiate…. It’s a very daunting moment for those who have not experienced it before. 

There’s a few things you can do to prepare yourself…

1. Know your limit 

Understanding values in your search area is obviously a key part of understanding what you’d be prepared to pay for a property. Understanding that there should also be a few different prices you’d be prepared to pay for a property pending the circumstances under which you buy it is another key part of knowing your limit. For example, if you find yourself in the middle of a competitive auction where you’ve got one or more buyers chasing you down, you are likely going to need a ‘stretch limit’ that you’d be prepared to go to only under very strong competition. This figure is going to be very different to the one you offer the agent in your first conversation post auction pass in where you were the only bidder. 

2. Remember the quote range

How many times have we gone inside to negotiate on a property quoted $1.5 - $1.6m only to be told the vendors reserve is $1.8m…. Don’t be afraid to let the agent know you know what the legal requirements are for quotes ranges and reserves. They should be at or within the advertised range. Yes there are times where the vendor decides on the day that they want more but generally, this is a negotiation tactic to help get you up in price. Flexibility is key if you’re keen to buy the property however, where there was no other competition during the auction, you are in the box seat and can take your time to get there! 

3. Take control 

If you are attending the auction with your partner, a friend or parent, plan to have one of you go inside and one of you stay on the street. This is going to give you a legitimate reason to leave the property for a breather while continuing the negotiations. The pressure of the environment works in the agents favour, so take control back by removing yourself at certain times for fresh air, to clear your head, keep your thoughts rational and in line with your original plan!

Gooooood luck out there and don't forget, we offer a bid only service where we will attend the auction on your behalf and bid/negotiate/handle the pass in. So if you’re breaking out in hives at the thought of going tete-a-tete with an experienced negotiator, you know who to call!! 

Prop Culture