The only thing bigger than the ratings for the season finale of The Block is the drama, and we at Perspective were hooked watching the late-night painting parties, apparent sabotages and heated body corporate meetings.
Just shy of 2.5 million Australians tuned into Sunday night’s finale to watch the five couples reap the benefits of their hard work. Those looking for high drama and high prices weren’t disappointed.
The auction of Ronnie and Georgia Cacere’s house dropped jaws around the country when it looked like the $2.62 million reserve price would not be achieved.
After consulting with the pair and well-loved host Scott “Scotty” Cam, auctioneer Bill Stavrakis informed the crowd the property would be passed in. Cue confusion from viewers all over the country. Cam didn’t hold back, saying it had been part of a strategy planned prior to the auction beginning.
“I said if it hovers around the $2.6 million mark, which is under reserve, you’d have to pass it in immediately,” he said on the program.
The decision caused controversy with buyer’s agents who, despite holding off bidding during the auction, said they would have been part of private negotiations if given the opportunity. But the move paid off for the pair, who finished dead middle with a profit of $161,000.
This season marks the first time since 2011 that a property has passed in. And while the rare situation made for great TV viewing, the possibility of this happening in the real-life world of auctions is a lot less shocking. Mark Wolens, Principal of Independent Property Group’s Woden and Weston Creek, explains.
What does it mean to ‘pass a property in’ and just how rare of a phenomenon is it?
Before an auction begins, the agent and seller will determine a reserve price. This is the minimum price the seller wants to achieve at auction and is often determined by the needs of the seller and the advice of their agent. Often this price is only known by the agent, the auctioneer and the seller.
Sometimes an auction looks like it won’t meet the required reserve, bids may be too small, or the bidding may slow down between potential buyers. When this happens, the seller and auctioneer may choose to stop the auction and negotiate privately with the highest bidder.
Passing a property in may be a rare thing to do on The Block, but it does happen more often in real life.
A good agent works to get the best outcome for the buyer and seller, and they may choose to pass a property in and negotiate privately to achieve this.
Audiences and buyers were shocked the auctioneer did not announce the property was about to be passed in. Are auctioneers required to let people know this is about to happen?
Ultimately, the auctioneer acts on the instructions of the seller. If the seller chooses to pass the property in, the auctioneer is not required to give notice. The auctioneer will announce the property has been passed in and then give the highest bidder the opportunity to begin private negotiations.
In the case of the Block, the buyer’s agent should have known better than to be shocked at the outcome. They would have known there was always the possibility of passing the property in and had the opportunity to continue bidding.
It may seem controversial if you’re not used to auctions or the property market, but that’s what we’re here for – to help guide buyers and sellers on auction day.
The last bidder was offered the chance to negotiate privately, but their offer was not accepted. The auctioneer then began negotiating with the second highest bidder – is this a common thing to do?
Because the agent’s job is to get the best outcome for the buyer and seller, this happens quite a lot. It is common for a property to eventually be sold to the second or third bidder in private negotiations.
Many people, including casual viewers of the Block, think an auction happens and then it’s all over, but this isn’t true. An auction is sometimes just the beginning of the process, with negotiations happening over the next few days.
What can be done to avoid a property passing in on auction day?
Independent Property Group has an average auction clearance rate of 79%. We use a qualified auctioneer and then have a team of agents who are there on the day to help both the seller and potential buyers. They are there to answer questions and help facilitate the auction.
On The Block, you won’t find agents in the crowd helping the bidders, it doesn’t make for good TV if everyone is getting along. But we know a great auction is a result of everyone working together during the campaign and on auction day.
A good agent knows there is always a possibility of a property passing in, so they will have a plan B to negotiate and achieve the best outcome for the seller. Every property is different and it’s important the auctioneer works closely with the seller and agent to plan for all possibilities on auction day.
What’s your advice for avoiding drama on auction day?
Choose an agent who will work closely with you to achieve the best result on auction day. Make sure they have a strategy if the property does pass in. Agree on a plan beforehand so you feel comfortable and understand the process.
While everyone hopes to sell on auction day, it’s important to remember that if your home doesn’t sell at auction, it is not the end of the process. Stay positive and continue to work with your agent to secure the best price.
So there you have it, perhaps The Block drama was not that dramatic after all. Though to avoid the unnecessary stress, we suggest you don’t auction your home on national TV.