What happen when the property passed in the auction?

Discussion in 'The Buying & Selling Process' started by AlbertWT, 5th Apr, 2019.

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  1. AlbertWT

    AlbertWT Well-Known Member

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    People,

    I wanted to get some clarification before embarrass myself in the public.

    Last week, there is one property that I've mentioned to make an offer before the auction, let say my offer is Auction PriceGuide+$25,000. So the agent wanted to ask me for the S66W and the 10% deposit by today.

    Since I have just received lower than expected purchasing power in the Pre-Approval letter just now.

    I am hoping in the Auction tomorrow the property to pass in, then offer the asking price+$ 1000?

    Is that possible or I will be in trouble?
     
    AlbertWT, 5th Apr, 2019
    #1
  2. bmc

    bmc Well-Known Member

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    if the property doesn't meet the reserved price and "passes in" at the auction then the agent may try to negotiate with the highest bidder.

    you can offer what ever you like,
    they can only say no.
     
    bmc, 5th Apr, 2019
    #2
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  3. 7020

    7020 Well-Known Member

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    You haven't signed a contract so you are fine!

    Also don't let the agent convince you into paying more than you want/can
     
    7020, 5th Apr, 2019
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  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Or they could say "yes".
     
    Scott No Mates, 5th Apr, 2019
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  5. Propertunity

    Propertunity Well-Known Member

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    Or offer only what you think it is worth, which could be asking price less $20,000. Obviously they are not going to entertain your offer if it is less than the auction ‘passed in’ figure.
     
    Propertunity, 5th Apr, 2019
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  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Generally the last person bidding gets the first rights to negotiate if an auction fails to meet reserve.
    Let's say reserve is $700k and bidding falters at $600k and doesn't go any higher and it's passed in. The bidder at $600k doesn't know what the reserve it and it may or may not be anywhere near what the auction price guide is (that is just a lure to get you interested). So the final bidder can then formally offer $600k or a higher amount and the owners can counter offer with any amount they want (doesn't have to be reserve or the auction price guide). They can keep going back and forth until the seller is happy. This might be at $650, 700k or 750k etc
    If they can't agree then it might go back on open market with a price guide and anyone can put in an offer and the dance begins again.
     
    Westminster, 5th Apr, 2019
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  7. AlbertWT

    AlbertWT Well-Known Member

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    Yes, that does make sense, I will still need to be the highest bidder AND also have the unconditional approval letter to be able to win without any risk of stalling the deal due to financing.
     
    AlbertWT, 6th Apr, 2019
    #7
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