Can you really buy a property before auction day?

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We’ve all seen those listings that promise that a property will be sold on auction day or before, haven’t we?  

The question is: will it really be sold before auction? Sold Home For Sale Sign & New House

There are many tools in a selling agent’s kit-bag and one of the most successful is to create competition for a property.

More competition means a higher price after all.

So, if an auction is the best strategy to create competition amongst buyers, why would a vendor sell the property beforehand?

Sale deadline

Here’s the thing: as well as creating competition, an auction also sets a deadline for the property to be sold.

On auction day, the vendor can sell the property to the highest bidder if they so choose.

With this in mind, auctions are often used by sellers who want to offload their property quickly, without giving the impression that they need a speedy sale.

Likewise, if a quick sale is one of their main motivations, vendors might be open to pre-auction offers as well.

Especially in the current property market where conditions are less buoyant and vendors are a little less confident about selling “on the day.”

The secret is to work out whether they’re truly open to selling before auction day – or perhaps they’re merely fishing for market feedback on price.

Of course, that’s when an experienced buyer’s agent who understands how agents think can help by asking the right questions of the agent.

Tips to negotiating a pre-auction purchase

Let’s say there’s a vendor who is open to pre-auction offers, how do you make sure yours is the winning one?

And how do you ensure you’re not paying over the odds?

In summary, here are my top five top tips for negotiating your way into a pre-auction purchase:

1. Do your homework

It might be considered “flying blind” to make a competitive offer when trying to secure a property prior to auction, but that shouldn’t mean you have no idea about the price you’re prepared to pay. library Freelance

The best weapon when it comes to negotiation in real estate is knowledge.

Know the market and know the value of the property in question.

Armed with that power, if it’s the right property – and especially if you’re looking at buying your home – don’t be scared to put your best offer first

But you should also be prepared to walk away if the price is too high.

2. Be prepared to lose

While no one likes to consider themselves the “loser” in any sort of negotiation, it’s far better to walk away and live to fight another day than over-commit to a property you’ve become emotionally blinded by.

This comes back to tip number one – if you know the true value of a property and set a limit on what you’re prepared to pay, make sure you stick to your plan.

After all, there are plenty more “fish in the sea” and by losing gracefully, you just might find you’re a bigger winner the next time around.

3. Don’t be forced into a “Dutch Auction”

A “Dutch Auction” is essentially where two or more potential purchasers end up making “blind bids” prior to the property going to auction. auction

Having no idea how much the other party is offering, the selling agent may tell you that they’ve put in a higher amount and ask if you’re prepared to increase your offer.

This can go back and forth a number of times, depending on just how far each party is prepared to go.

Dutch Auctions often push the price of a property beyond reason as emotions get the better of unwitting participants.

Again, the key is to walk away when you reach the limit you’ve set yourself.

4. Time is your greatest weapon

Use time to your advantage by making your offer at the last possible minute.

Never be too hasty or impatient as this will work against you and could be the reason you lose out to another purchaser.

During any negotiations, waiting is a great weapon in your arsenal as it will make the other party sweat a little and give you the upper hand.

5. Play your cards close to your chest library equity

Real estate agents are very skilled at prying information out of potential buyers, including the price they’re prepared to pay for a property.

After all – it is their job!

Sometimes you can end up revealing things to them that you never intended to and that might be detrimental to your negotiating power.

By keeping your cards close to your chest and revealing very little about how much you might pay, you maintain an advantage.

It’s vital that an agent cannot use your information to sway another potential buyer to increase their offer and outbid you.

So let’s clarify…

Properties that are being sold by auction may be open to offers before the day. sold property auction

The key to success is understanding how serious the vendor is about selling before auction day.

Now the point here is to gather all the necessary market intel before you submit an offer.

And then don’t get emotional.

Like I’ve said many times before: successful property investment is about buying with your head and not your heart.


You may also want to read: 5 TOP TIPS TO NEGOTIATE YOUR WAY INTO A PRE-AUCTION PURCHASE

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on

Metropole

If you’re wondering what’s ahead for property you are not alone.

You can trust the team at Metropole to provide you with direction, guidance and results.

In “interesting” times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award winning team at Metropole.

If you’re looking at buying your next home or investment property here’s 4 ways we can help you:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!  This will give you direction, results and more certainty. Click here to learn more
  2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3.5 Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.  Click here to learn how we can help you.
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  4. Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.
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About

Bryce is a property development specialist, having successfully sourced, project managed and completed hundreds of development projects for Metropole’s clients, helping them create substantial wealth.Visit Metropole.com.au


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