One of the most frustrating things as a property buyer is having your heart set on a house, then showing up at the auction only to learn it’s been withdrawn. But why are properties withdrawn from auction?
Properties are withdrawn from auction for one of three reasons: The seller may have had a change in circumstances, they may not have resolved certain issues in time for the auction, or the auction house simply withdrew it due to lack of interest before the auction.
It's not necessarily the end of the road though. You may still have a chance to buy the property. This is why it's important to understand the reasons properties are withdrawn, and what your options are.
1. What does "Withdrawn" mean in a property auction?
When you search this question on Google, many websites will tell you it's because the property hasn't sold. But there's a real mix-up between properties that have been "withdrawn", and those that are "sold prior" or "unsold".
1.1. Withdrawn vs Sold Prior vs Unsold
In their glossary, EIG say these are all the same thing: "If a property is sold prior to auction or when there is a failure to reach the reserve price [i.e. it's not sold]... the auctioneer will withdraw the property".
It's the same in IAmSold's conditional auction contract: "If no bid equals or exceeds that reserve price [i.e. it's not sold] the Property will be withdrawn from the conditional auction".
But in my experience that's just not true. Withdrawn, Sold Prior, and Unsold are all different. Here's what actually happens to those properties:
- Properties sold prior to the auction are marked "Sold Prior". Auction houses do this to show off the fact they're successfully selling, and to create a feeling of scarcity and FOMO among buyers.
- Properties that fail to meet their reserve are marked "Unsold". Auction houses advertise that a property is unsold because they want you to come forward to try and buy it!
Here's an example from recent Auction House results:
So "withdrawn" doesn't mean "sold prior" or "unsold". But what does it mean?
There are three reasons properties are withdrawn from auction. Let's get into them.
2. Why would a property be withdrawn before auction?
From my own experience, and from scouring articles and forums, there are three main reasons properties are withdrawn from auction.
2.1. Change of circumstance with the seller
According to Section 57(2) of the Sale of Goods Act 1979 "A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer". This means that sales are legally binding once the hammer falls.
But before then it's different.
A seller is well within their rights to withdraw their property before the auction altogether if they have a change of circumstances, or a change of heart.
Change of circumstances
A typical example would be if someone's selling a property in order to finance another property purchase, or maybe a business opportunity.
If that other house gets snapped up, or if that opportunity evaporates, then the motivation for selling is gone.
In this kind of situation the seller would withdrawn the property from the auction.
Change of heart about selling a house
Selling a property is a big financial decision, but it's a big emotional one too. This is especially true if the property is particularly meaningful to you. (For example, inheriting your old family home after the passing of a parent).
A change of heart isn't especially unusual in this sort of situation, and sellers are free to withdraw the property from the auction if they desire.
This can crop up with big refurbishment or development opportunities too though.
Perhaps the seller initially wanted to offload the property to a developer, who would do the work and reap the profits themselves. But seeing all the interest the property generated led to a change of heart with the seller, and made them want to do the work themselves instead.
The seller can withdraw the property from auction, roll their sleeves up, and jump into the project themselves.
2.2. Issues not resolved ready for the auction
Sometimes the sale of a property will be dependent on something else happening. But if that "something else" doesn't materialise in time then the property may need to be withdrawn from the auction.
Inheritance/Grant Of Probate example
For example, imagine an inherited property needs to go through probate before it can be sold:
- According to Farewill, an online service providing legal information, a probate application takes 3-6 weeks to be approved.
- The property may be entered into an auction 8 weeks from now on the assumption that probate will be granted by then...
- But what if it's not?
In this case, the property simply can't be sold. It's not yet legally in the name of the people trying to sell it.
It would therefore need to be withdrawn from auction.
Bear in mind that this withdrawal will only be temporary... Chances are it'll be right back in the next auction when the probate's all in place.
Withdrawing a property from auction due to divorce
Imagine another example with a divorce. A seller may need the court's permission to sell the property... But if this doesn't materialise in time for the auction then it may need to be withdrawn.
2.3. Auction house withdraws the property due to a lack of interest
In our other articles we cover how an auction house's "success rate" is one of the key stats for their business. It's one of the big "hooks" they use to draw more sellers to their service.
(After all, if auction houses were no more likely to sell than estate agents were, then why use them?)
Auctions know that sellers are going to look at their success rate, so they do everything they can to protect it.
Withdrawing under-performing properties to boost success rate
With this in mind, what would an auction house do if they had a few properties in their next auction that they just knew weren't going to sell? Perhaps there'd been no viewing requests, and no one had viewed the legal pack.
It makes total sense for the auction house to withdraw those properties from the auction!
Example: Withdrawing lots gives an increased success rate
This actually happened in the auction pictured above. (The Auction House West Yorkshire May 2021 auction)
Here are the stats from the auction:
Here are some workings:
- Actual Success Rate: 51 / 56 = 91.1%
- Success Rate Ignoring the Withdrawals: 51 / 53 = 96.2%
In other words, if the auction house were to leave all the "withdrawn" properties in the auction they'd have a success rate of 91%. (This is still really high compared with the national average of about 75-80%!)
But after the withdrawals, the success rate jumps up to 96.2%! (This still isn't the 97% they said... I think they must have rounded incorrectly!)
Now, I don't know what the circumstances actually were with these withdrawals in this auction. But it's a good example that demonstrates the principle: It's in the auction house's interest to withdraw properties that simply aren't performing during the pre-auction marketing period.
The auction house would simply withdraw it from the auction and push it back to the next one. In the interim, they'd work on the seller to reduce their reserve price in order to make it more attractive to buyers.
Related: 17 Benefits of selling your house at auction (a high success rate is one of them)
3. What should you do if the house you want has been withdrawn?
We've covered the 3 reasons properties may be withdrawn before the auction. Although they're gone from auction now, they won't be gone for good.
- That seller who changed their mind could have another change of heart and re-list,
- The grant of probate is finally going to arrive, and the house may be auctioned then,
- The property withdrawn due to lack of interest could have a price reduction, and pop up in the next auction.
So what should you do if the house you wanted to bid on has been withdrawn?
Contact the auction company to find out why it was withdrawn and to express your interest:
- If it was withdrawn due to lack of interest the seller may be open to a lower offer now.
- If it's being entered into the next auction you may have an opportunity to agree a pre-auction sale on it. At the very least you can be first in line to view it.
Circumstances are always going to be different for each house, but getting on the phone with the auction house is the first step to figuring out what happened. You can also find out whether you're still in with a chance of getting the house.
A property being withdrawn from auction isn't the same as it being "unsold" or "sold prior". Properties are withdrawn from auction for one of three reasons:
- Change of circumstances (or heart) with the seller,
- Issues that needed to be resolved before the auction haven't been,
- It may have been withdrawn due to a lack of interest. (The auction house is trying to protect their high "success rate"!)
If you were hoping to buy a property that's been withdrawn then contact the auction house. They may be able to tell you what happened, and you can find out if it's coming back to market. If it is set to be sold in the future, you can try and tie up an out-of-auction sale. At the very least you'll be first in line to see it when it's available again.
By Matthew Cooper, Co-Founder of Home Selling Expert