If you’ve found your perfect home but it’s destined for auction, don’t be afraid to make an offer straight away. Before doing so, you should be confident you know the home’s value based on your extensive research.
Ask the sales agent for their process in handling multiple bids before an auction because you need to be sure you’ll be allowed to put forward your best offer. Good agents will have this nailed.
Usually, an owner will test their fortunes at auction. But if your offer is accepted, be ready to pay the deposit and exchange contracts quickly, or other bidders may outflank you. Even then, you could be gazumped – that’s when the owner accepts a higher offer and pulls out on you.
The vendor’s agent might offer a chance to counter-bid. In such an aggravating scenario, you mustn’t lose focus on your budget and assessment of the property’s value. It’s easy to make a wrong judgment in a charged atmosphere.
As an experienced agency, we offer a quick guide on handling pre-auction negotiations when multiple offers are on the table. We hope you find these helpful.
- Agent approach: Some agents will encourage you to respond to rival offers to drive up the price. That’s standard so don’t be offended. Focus on your assessment of the property’s value and how much you want it.
- Be ready to sign: If you’re serious, you must have your finances lined up. Be ready to put down a deposit and exchange contracts quickly. This should secure the property in most instances.
- Are you selling? You want to be confident the owner is prepared to sell before the auction. If not, you’re just kicking a tyre. If your best offer is rejected, you may question the value of attending the auction. However, it’s worth seeing what happens if you really want the home. The outcome isn’t always predictable.
- No fear: Don’t make an offer because you fear having to compete for the property at auction. Don’t be frightened of the auction process. It’s transparent, you know exactly what the highest amount is and how much competition there is for the property.
- Set your limit: Don’t stretch your finances beyond breaking point. There’ll always be similar properties. Or if you’re regularly being outbid, it may be time to revise your purchasing strategy. Do you need to downgrade your property expectations or perhaps consider a nearby suburb that may be more in your budget?