The Auction Didn’t End With a Bang — Now What? A Guide for the Underbidder When the Property Passes In

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The Scene: Saturday Afternoon, Auction Day

You’re standing on the footpath, heart racing. The final call has just been made.
“Passed in at $880,000. Thank you for your bidding.”

The crowd starts to murmur. Some people drift away. Others hang back out of curiosity.
You? You’re the underbidder — the last person to place a live bid before the auction came to a halt.

You didn’t win. But you're not out. In fact, you might be in the best position of all.

What Just Happened?

When a property is passed in, it means the vendor’s reserve price wasn’t reached during the auction. But if your bid was the highest, you’ve now earned something valuable:

The first right to negotiate with the vendor.

And in Victoria, that right is exclusive — but fleeting. It usually only lasts while you remain on site.

Step One: Don’t Leave

This sounds obvious, but it’s the most common mistake.

The underbidder — still flustered from the auction — thanks the agent and walks away to “think about it.”
And just like that, they lose priority.

If you’ve made it this far, stay put. You’re not dealing with a crowd now — you’re negotiating one-on-one.

Step Two: Prepare for the Private Chat

The agent will likely invite you inside or aside for a private discussion. This is your window.

They might say:

“The reserve is $900,000. Are you prepared to meet that?”

You don’t need to say yes. But you do need to engage.

Ask:

  • “Has the vendor reconsidered their reserve now that bidding has ended?”

  • “Is there room to move if we sign today?”

  • “Can I put forward terms subject to finance or inspection?”

This is now a private sale negotiation, not an auction.

Step Three: Know the Rules

This negotiation is governed by a few unique auction aftermath rules:

  • No cooling-off period applies if you bid at auction, even if you sign afterwards.

  • The sale can now include conditions, if the vendor agrees.

  • If you walk away, the agent is free to speak with others — you lose your priority position.

Step Four: Negotiate With Clarity

You’re no longer on the spot. There’s no crowd.
So take a breath. Think commercially.

You can say:

  • “My final bid was $880,000, and I’m willing to increase to $890,000 with a 60-day settlement and subject to finance.”

Or:

  • “I’d be willing to meet the $900,000 reserve if we can agree on building inspection and delayed settlement.”

But whatever you do: stick to your budget. Just because you’re first in line doesn’t mean you should overpay.

Also consider:

  • Settlement periods that suit your financial arrangements

  • Flexibility in deposit timing

  • Whether vendor terms align with your goals

Step Five: If You Don’t Agree

Not every negotiation ends in a handshake. That’s okay.

If you can’t agree:

  • Thank the agent and say you’re still interested if circumstances change.

  • Ask to be contacted before it’s re-listed or offered to others.

  • Keep a written record of your final offer.

Deals sometimes fall over. Your professionalism and patience can pay off in the days to follow.

Strategy Tip: Have Your Conveyancer or Advocate Ready

Having a conveyancer (like us) on call can make a big difference. The agent may present you with a contract on the spot. You don’t want to feel pressured to sign something you haven’t reviewed.

We help clients:

  • Check special conditions

  • Insert clauses that protect you (subject to finance/building, etc.)

  • Adjust deposit or settlement terms if needed

Why This Process Exists

The law recognises that the underbidder has skin in the game.
You’ve shown real interest — and real money.

Giving you the first chance to deal reflects that you’ve already set the market’s tone.

But it’s up to you to take that opportunity seriously.

Final Thought: Some of the Best Deals Are Made After the Auction

An auction is theatre.
A pass-in? That’s business.

As a conveyancer, I’ve seen countless buyers pick up properties post-auction on better terms and sometimes at less than the reserve — simply because they stayed calm, knew their position, and negotiated clearly.

If that’s you, don’t consider it a loss.

You might just be the next owner.

✅ Need Help Negotiating After a Pass-In?

If you’re the underbidder and the property passed in, get in touch. We’ll help you:

  • Understand your rights

  • Review contract terms

  • Negotiate smartly with the agent

📞 03 9783 0111
📧 info@quick32.com
🌐 www.victorianpropertysettlements.com.au