When a property goes to auction, there’s no guarantee that it will sell. Often there will be a reserve price set and if no-one bids at that price or above it, the house won’t be sold. This reserve price is the minimum the seller is willing to accept, and is kept a secret.
If a property goes under the hammer but fails to meet its reserve, it will be removed from the sale. However, following the auction the auctioneer will invite offers from anyone who was interested in the property, in the hopes to reach a sale. Find out more about how property auctions works here.
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How can you find these unsold properties?
If you’ve gone to an auction, hang around after the lots have finished as the auctioneer should then move onto the unsold properties and you’ll have a second chance to win one.
Alternatively, it’s worth looking on auction house websites to see if they have a page listing properties which failed to sell at auction. If they don’t have properties listed, they may instead offer a sign up form to receive alerts of the properties available.
What’s the unsold property auction lot tactic?
Some professional buyers only purchase at the unsold auction property stage, and have built their entire portfolio on these. If a property is still being offered for sale after it didn’t reach its reserve price under the hammer, it means the seller still wants to sell it. There’s a chance you could grab a bargain straight after the auction, or perhaps play the waiting game. The unsold property auction lot tactic can involve repeated visits to the auction house to keep tabs on properties which haven’t sold. As time goes on the seller will be more desperate to sell which can improve your negotiating position.
Don’t rely on an auction’s website, try calling them instead
It can take time for an unsold property to be added to an auction house’s website, depending on how active they are online. Some auction houses may add the property straight away, but others could take days to weeks to get round to it.
It’s best not to wait if you’re keen to grab a bargain. Try phoning the auction house on the day of the auction or the next day and ask for a list of the unsold properties. They will likely be more than happy to help as they want to get them sold too so they get their commission!
What about the reserve price on unsold lots?
When a lot goes to auction, the reserve price is kept private. However, this can change if it failed to sell. Don’t be afraid to ask the auctioneer what the reserve price is, some may even tell you without needing to ask.
Once you know the reserve price, you could offer it if you’re happy to pay the amount. Of course, if there are other interested buyers they may offer more, so just because you offer the minimum price it doesn’t mean you’ll win the lot.
I began writing for Property Press Online in October 2019. Particular areas of interest are housing market news and new developments in the market.