What if the auction hammer doesn’t fall?

It isn’t just buyers who can sometimes be spooked by an auction campaign. Particularly when the market isn’t booming, vendors can be nervous about using this type of marketing to sell a property.

One of the most common things sellers mull over is what options are available to them should their property not sell under the hammer. We asked LJ Hooker’s head of sales, Graeme Hyde, for advice.

Negotiating with bidders

Negotiations with bidders immediately after a property passes in at auction can often close the deal quickly and effectively, giving you a sale either on the same day as the auction or over the following days.

“Following the auction, the agent can open discussions between the highest registered bidder and the seller and other interested parties,” Mr Hyde explains.

“While the negotiated price may not reach the reserve, an agreed price can still be achieved that pleases the seller and buyer.

“If an arrangement with the top bidder can’t be reached, there should still be numerous underbidders and interested buyers who made themselves known during the intensive marketing campaign. While they may not have secured the property on the day, they’ve still shown interest in the property, and may have even changed their opinion of what the property is worth.”

Private treaty

Sometimes post-auction negotiations can still fail to find the right buyer at the right price. As Mr Hyde explains, it may be nothing to do with your property but the preference of the buyers in how the sale is managed.

“While auctions are a very transparent method of sale [by] placing all buyers on a level playing field, some buyers prefer to negotiate through private treaty,” Mr Hyde says.

“Sellers could go back to the market through this method, attaching a price or no price to their property as part of their marketing. Again, an effective auction marketing campaign will have unearthed interested parties to negotiate with.”

Ongoing marketing strategy

Alternatively, it may be the case that your property auction simply wasn’t well timed, and giving it a second chance can bring home the goods.

“Just because a property didn’t sell at auction during its marketing campaign, it doesn’t mean a fresh campaign can’t be initiated,” advises Mr Hyde.

“Markets can change quickly. I’ve seen instances where a property didn’t sell at auction, only for it to be relisted and auctioned two months later, selling under the hammer for a higher price!

“An amended marketing strategy could unearth the right buyer the second time around.”

There are lots of factors which can result in a property not selling at auction, but that doesn’t mean it can’t and won’t sell. Consider all the scenarios before auction day so you’re prepared and confident, and choose a good auction campaign for optimal results.