What does "passed in" mean in relation to a house auction?

[lara24]

Just trying to get my head round the house auction thing and wondered what passed in means? Sold or withdrawn seem pretty self-explanatory but passed in has me stumped........

 

Thanks L x

[Guest chris955]

It means it failed to reach the reserve price put on it by the seller.

[lara24]

Aahhh thanks. Not sure what that says about the market in Perth as out of 18 auctions last week only 4 were actually sold at auction, 1 sold before, 2 withdrawn and a whopping 11 were passed in. This is the first time I have looked at these figures so it may just be a funny week, will see what the next few weeks show......

 

Thanks again for the info. L x

[Guest chris955]

No problem. It probably means buyers are finally realising house prices are pretty stupid.

[AJ]

Sellers being too greedy and thinking they can ask crazy prices for their house!

[fish.01]

Some cities sell a lot of houses by auction (eg Melbourne 400-500 per week) where other cities just use them sparingly (often in the top end of the market). With only 5-20 auction per week Perth falls into this category so the auction stats sample size is statistically shaky but long term trends may help if yo can find them. Search for "auction clearance rate perth" maybe?. Only 3.3% of homes in Perth are sold by auction.

[Skani]

What often happens after a property is passed in is that the seller and top bidder (assuming that there was at least one bidder) try to negotiate privately for a price they can both agree to.

[Petals]

A lot of buyers have their limit and they will wait until the property is passed in and then they will negotiate if the price is around what they are looking for. At Auction though you need to have done all your homework about the property, and have finance ready and in place as once the contract is signed no cooling off and its a done deal. Deposit paid at auction.

[Blewyn]

This is illuminating.....http://reiwa.com.au/Research/Pages/Perth-listings-and-rental-trends.aspx

 

Suggests availability is tight in the rental market.....but does this translate into higher prices, or is it because of excessive prices ? Can anyone find an inflation-adjusted price chart or a chart of price vs salaries ?

[Johndoe]

What often happens after a property is passed in is that the seller and top bidder (assuming that there was at least one bidder) try to negotiate privately for a price they can both agree to.

 

Yep, a PIO member did this very recently, and got the house at 30k less than the reserve.

[Incata]

We bought at auction a couple of months ago and it was a very interesting experience (as it was a mortgage repossession). My husband attended the auction we won and I attended another (just out of interest as I did not expect my husband to get the pile of junk we are now living in - regrets, I have a few!) The auction I attended was passed in at $1.2 million. They did not come to agreement and the house went on the market the following day. However, talking to one of the real estate staff who had been asked to attend the auction, the owners had been offered $1.4 million to not go to auction, and refused. It was a 4 bed, 2 bathroom and 2 months earlier a 5 bed, 3 bathroom in the same area, same size plot, had gone for $1.365 million, so this auction got passed in due to the greed of the owners. Apparently $1.2million did not meet their reserve price (which at a guess had been set at $1.4million). What made me laugh was that the $1.2 million bid was from them!!!! The look on the auctioneers face when nobody would go higher was an absolute picture!

 

However it has struck me on several occasions that owners still expect their houses to be worth (and people willing to pay) the value when the market hit it's peak in 2010. They have failed to notice the number of redundancies, the lack of sales and the fact that when you look at house price trends and data, they are (in the areas we looked at), back to what they were in 2006. We did extensive research (real estate agents don't like that) so when they gave us tosh about the number of sales increasing and price increases, we asked for their data sources (which they could not provide) and then gave them ours. We weren't overly bothered but the stats backed us up.

 

Mind you, it's a common problem everywhere. My mother-in-law believes our house in the UK (which we have now got an offer on) is worth about £70k more than we got for it. She is living in cloud cuckoo land. Even at the peak of the market it was only worth £20 - 25k more than we got for it now, but it hasn't stopped her little fantasy. She offered to sell it for us and deal with the agents. Once we heard her opinion of its value (having done the usual research on rightmove, zoopla etc), we decided we would deal with it ourselves. Fortunately our agent is happy communicating via email, as is our solicitor, so not too much of a problem and she can't interfere and start trying to get her fantasy figure. Every time she says "Well someone got a good deal out of it", I want to yell, "Yes, us!")

[spottydog]

The auction I attended was passed in at $1.2 million. They did not come to agreement and the house went on the market the following day. However, talking to one of the real estate staff who had been asked to attend the auction, the owners had been offered $1.4 million to not go to auction, and refused. It was a 4 bed, 2 bathroom and 2 months earlier a 5 bed, 3 bathroom in the same area, same size plot, had gone for $1.365 million, so this auction got passed in due to the greed of the owners. Apparently $1.2million did not meet their reserve price (which at a guess had been set at $1.4million). What made me laugh was that the $1.2 million bid was from them!!!! The look on the auctioneers face when nobody would go higher was an absolute picture!

 

This is quite usual, if you only have one bidder they would be stupid to bid against themselves when they have the option of negotiating privately. A house near me got passed in at auction recently then sold the same day for $200k more than it was passed in at, I presume this was someone at the auction.

 

Generally what I have found in my area is the house prices aren't reduced by much (maybe 5% except for those that were obviously trying their luck when they reduce in a few weeks by 20+%). If the house doesn't sell it gets taken off the market then comes back on a bit later and sells for close to original ask. THis is different to what I found in the UK where asking prices were steadily reduced over the months.