Passed in
An average of 37 per cent of properties auctioned this year have been passed in. This occurs when the highest bid at the auction does not meet the vendor's reserve price.
Passed in on vendor's bid
This occurs when the last bid was made by the vendor or the agent on the vendor's behalf. This shows that demand at the auction has fallen short of the vendor’s expectations. This around six out of every 10 homes passed in are on a vendor's bid, much the same as last year.
Reserve price
At the heart of the auction process is the reserve price. The reserve price is the minimum price that the vendor wants for the property. The reserve is typically set by the vendor the day of, or the day before, the auction. It is also worth noting that while it is often announced, there is no requirement for the auctioneer to announce that the reserve has been met.
Clearance rate
The clearance rate is often used as an indicator of market sentiment. It is the combined total of the properties sold before the auction, at the auction or the day after the auction divided by the number of auctions reported that day. For instance if one home is sold before the auction, five sold at auction and one the day after the auction and 10 properties were listed, the clearance rate is 70 per cent. The REIV publishes clearance rates and the actual number sold before, after, passed in and passed in on vendor bid to which provides transparency to market analysts and casual observers.
Taken from REIV.com.au
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