‘Pros and cons to all methods of sale’: What happens after Canberra homes pass in at auction?

Auction clearance rates remain below the numbers recorded last year, and with more homes being passed in at auction, there is a new majority method of sale taking over the Canberra market. 

Last weekend, Allhomes data revealed Canberra’s auction clearance rate reached just 42 per cent, and 53 per cent the week prior.

Despite this, homes that had passed in at auctions still produced great sales including a property that broke the suburb record in Moncrieff this week, and one in Wright last week. 

The process that follows the passing-in of a home at auction remains much the same across the board, Andrew Thorpe of Solely Properties said. 

“When homes pass in at auction, we, on behalf of the buyers, have up until midnight to negotiate a deal with registered bidders under auction terms,” Thorpe said. 

“First and foremost, we have to negotiate with the highest bidder from the point it passed in, but if that buyer gives up the right to negotiate further to the vendor’s expectations, the vendor can then negotiate with other registered buyers.” 

If there are no registered bidders at an auction, the process is slightly different, said Justine Burke of Luton Properties Weston Creek and Molonglo Valley. 

“If there are no registered bidders, or the bids are a long way off the seller’s reserve price, then often it is a case of moving onto the next phase of the process … advertising,” she said. 

“An advertised price opens the property up to potential buyers who may have thought the home was going to fall outside of their budget, or buyers who weren’t in a position to bid under auction conditions.

“The exclusive rights of the highest bidder, if there is one, end effectively when an agreement cannot be reached and negotiations cease.” 

The change in method of sale for a passed-in property allows agents to start anew and approach the home with a different marketing strategy, according to Sam Taylor of MARQ Property. 

“What we like to do when a home passes in is change the feature images online, update the listing description, adjust the price guide and inform anyone that has been through the home that it is still available,” he said. 

“Other than that from a process point of view nothing really changes ー we will have two open homes a week and will then be open to new offers.” 

With an unsuccessful auction campaign also comes an opportunity for buyers who could only make conditional offers to participate, Taylor added.

Thorpe said “there are pros and cons to all methods of sale”.

“It has to be tailored to the market conditions, the property, the suburb, price range and more,” he said. 

With a currently changing market and a different experience of selling for every home, Jonny Warren of Jonny Warren Properties said any sale is a good one at the moment, no matter the method.

“If you negotiate prior to an auction or go through private negotiations exclusively, you don’t know who you’re competing with. Going to auction means that you can see the interest of other parties on the day,” he said. 

“In saying that, if we find out that the seller is motivated to sell and are open to offers prior to auction day, I’d try my luck prior.”