10 tips for when the property you love is passed in at auction

After missing out at several auctions, you’ve finally found the home of your dreams, and despite being the highest bidder, it has passed in. What happens next? Here’s how to win the day.  

  1. Knowledge is power. It’s essential that you have researched the market and know of properties similar to this one that have sold recently and their selling prices. This information will support your negotiation post auction. 
  2. Don’t go inside the home. Immediately after the auction, the agent will invite you inside, which seems innocent enough but you’ll be on their territory. You can counter by asking to talk outside or meet at a cafe. 
  3. Leverage the exclusivity. Make the most of being the highest bidder. You don’t want to be negotiating as multiple parties make counter-bids. So, if you’re still serious about the property, this is the time to seal a deal.
  4. Reserve vs. reality. It’s common to hear that your bid was considerably lower than the reserve price. You should insist on knowing what the vendor expected as a minimum. Your research will guide you on whether this was a reasonable expectation, but ask the agent how they came to that pricing position. Stay patient and respectful.
  5. Wait for a counter. In effect, your last bid during the auction was your offer, so it’s reasonable to ask the vendor to make a counter offer. Don’t be lured into moving first as you’ll start negotiating against your own offers. Without the vendor’s counter, there’s no negotiation, only your blind bidding.
  6. Use your research. Where the counter offer feels excessive, use your research to address the disparity between it and recent sales of similar houses in the area.
  7. It’s not just about price. You may be able to win the property by giving some ground on settlements times. Ask the agent if the vendor is looking for a long or short settlement? 
  8. Nothing is personal. The agent is working for the seller and will do their best to deliver the best possible price. This can be an intense experience, but you should stay calm and continue to negotiate until you want to either buy or walk away.
  9. Know when to walk. Act confidently and quickly. If you’ve done your homework and resisted falling victim to the emotion of the moment, then you’ll be able to negotiate a fair market price, or you’ll call it a day and continue the search for your next home.