Why are auctions cancelled?

We are often asked this question, and whether it be a buyer’s market or a seller’s market, auction cancellations can strike for various reasons. In this current COVID lockdown climate, it isn’t a surprise to see auction cancellations strike, but what are the driving forces that often initiate an auction cancellation? Today’s Sunday Blog explores.

Vendor having a change of heart.

This is a less common occurrence, but it’s one that we should always be prepared for. Sometimes a vendor will have a change of circumstances that initiates a “let’s stay put” response. Our past experiences have ranged from hearing that job loss has blocked a vendor’s plans to upgrade, or a termination of interstate/overseas employment contract has put their migration plans on hold. One situation we recently faced included a separated couple rekindling their love and deciding not to divorce after all.

And sometimes a vendor will decide to take the property off the market and sell to a family member or friend at a later date.

Vendor receiving accountant, broker or taxation advice that recommends leasing out the property.

Upgrader vendors will often assume that they need to sell their home in order to financially facilitate the new purchase. More often than most would realise, many vendors explore the option of holding their current property and converting it to an investment property, (which we fondly term an ‘accidental investment). Sometimes the brainwave is their own, borne from an emotional connection to the home, but sometimes their broker, accountant or buyer’s agent suggests they explore the possibility of holding onto the asset.

Campaign not going so well.

This isn’t so common in a market like our current, crazy seller’s market, but we certainly see it apply in a grim, buyer’s market. Vendors who sense that their campaign isn’t tracking so well will sometimes make the decision to put their plans on hold, and to sit tight and wait until the market conditions improve before selling their property. Obviously this isn’t a luxury that every vendor has, but for those who haven’t financially committed to another purchase, it is sometimes the preferred course of action to take.

The decision to cancel the auction isn’t always necessarily driven by the vendor, either. A pro-active agent who fears a bad campaign tarnishing the buyer perception of the property may cancel the auction. The typical action they take is to either convert the campaign to a private sale or ‘expressions of interest’ format, or to cancel the impending auction and reschedule for a later date.

In our COVID lockdown climate, we have been privy to the latter on many an occasion.

A strong offer received which will close out the campaign.

This is the bane of many buyers’ voyages, and a common stunt that professional buyers will apply in a hot market. A conceived offer that tempts a vendor is often the trigger for a cancelled auction campaign. We often receive a text message like this one below, advising a tight timeframe and an end date/time for registration of interest.

If buyers have any interest in a property, regardless of how emphatic an agent is about the property running all the way to auction, they must make it clear that they have interest.

Missing a message like this can be devastating for a buyer who played it cool.

Bringing the sale forward to avoid COVID lockdown.

In the midst of lockdown activity, we are seeing many agents bringing forward their vendor’s campaigns too, especially when we have adequate notice. Our most recent lockdown was thrust upon us with only four hours’ notice, but our adaptive ability with online platforms and zoom auctions enabled a lot of pre-auction, transparent showdowns within the days after our premier’s lockdown order this time around.

One thing that 2020 and 2021 has taught us all is that auction cancellations can strike without much warning, (or time), and we must always be prepared to ‘go-live’.

Assuming we have a full campaign tenure to prep our due diligence is naive and ill-prepared.