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Auction Reserve not met? Here’s what to do next

12th March 2021

Although the average sales success rate at a property auction is between 75% and 80% - just one of the perks of selling at auction - there are times when the auctioneer will announce ‘lot unsold’. Here we discuss what happens when a property doesn’t meet its reserve - one of the most common reasons why a property lot remains unsold.

What is a ‘reserve’ price?

The reserve price is a figure set between the property seller and the auctioneer before the auction takes place. The figure reflects the minimum price a seller is willing to accept from a buyer, and the auctioneer will only accept bids that meet or exceed the reserve. For a seller, this gives peace-of-mind that their property won’t be undersold for a silly amount.

If you’re a property purchaser, you won’t know what the reserve is ahead of the auction (but a guide price will be published). Plus, you won’t know if your bid is valid until the bidding for that property is over – if the auctioneer declares ‘lot unsold’ but you’ve made an offer, you’ll know your attempt didn’t meet the reserve.

Failed to sell? Your next step

If a property has been listed in an auction but has not sold, the seller is free to list it in another catalogue with the same or a different auction house. One thing to be mindful of is fees. Always check whether there is a fee to list a property in a catalogue and whether there are auctioneer fees, even if the reserve price isn’t met. Many sellers take advantage of Open Online’s auction option as it offers a ‘no sale, no fee’ route to sale.

You can also look to sell on the open market. We offer an express sale service via our online estate agency, designed to sell your property fast. If you really want the minimum of fuss and the maximum chance of success, our sister company – The Open Property Groups – is a cash buyer and will make you a cash offer, with money in the bank and a successful completion, within seven working days.

Failed to buy? Don’t leave immediately

Reaching the reserve depends on who is in the auction room, who is bidding online and the others lots in the catalogue. When there’s competition between buyers, reserves are regularly exceeded but what happens when you’re bidding but the reserve isn’t met?

Disappointed buyers can ask the auctioneer if the lot is available to buy privately. Sometimes the seller and the auctioneer can make a mutually agreeable decision on a sale price directly after the auction, so don’t hesitate to make contact.

In other cases, the seller will reflect on the events of the day and may ask the auctioneer to contact those who unsuccessfully bid to make their ‘best and final’ offers in writing. This approach gives potential buyers from the auction time to secure additional finance to make a higher offer, or a second chance to realise they really do want a property.

Purchasers who missed out can also browse our selection of properties for sale – we have flats and houses available across the UK, with our team of agents ready to help you make an offer, exchange and complete.

If you need any further advice on buying or selling at a property auction, please get in touch.

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