Tips for buying a property before auction.
While auctions are a popular method of selling property, they are not for everyone, with some buyers finding the process daunting and stressful.
If you fall into this category and want to avoid competing in a bidding war to secure your dream home, here are our top tips for buying a property before auction.
Understand the property’s true value
Robust comparable sales analysis and research are your best chance at preparing a pre-auction offer that reflects a property’s market value while meeting vendor expectations.
Do your due diligence using online resources such as Property Value, CoreLogic and Domain to gather insight on your local market including past sales, demand levels and median prices. Get a clear picture of the current state of play in your local market – attending inspections/auctions of comparable properties and tracking what they sell for – to help guide and lend credibility your offer.
Learn more about researching the property market when buying.
Reach out to the agent
Building a positive relationship with the property’s real estate agent can help you understand the vendor’s requirements and gauge the level of interest in the property. Ask about the number of contracts issued and request a property price guide to help inform your offer.
Discover the vendor’s motivation to sell
Knowing the vendor’s motivation to sell can help you prepare a compelling offer to convince them to sell before auction.
Factors other than price can often play a role in a vendor’s motivation to sell pre-auction, such as timing, settlement periods and sentiment. A vendor may decide they would prefer to avoid the uncertainty of an auction and instead seek a definitive outcome beforehand. Everyone has a different situation, so it’s always worthwhile taking time to understand a seller’s motivation.
Get your finances in order
Price isn’t always everything when it comes to a property sale – some vendors may prioritise a quick settlement with a buyer who has their finances in order. Be clear about how much you can afford and get pre-approval from your bank or mortgage broker before making any offer so you can act quickly if necessary.
Learn more about preparing your finances to buy.
Make your offer
Agents are obliged to bring all offers to their clients. When trying to secure a property before auction, your offer needs to be high enough and/or provide enough upside for a vendor compared to going through with the auction. Remember to do your market research and consider recent comparable sales as well as vendor expectations per the property price guide.
Consider the timing of your offer too – in some cases it might be better to wait and gauge how much interest there is in the property rather than making an offer too early in the campaign.
Learn more about what to do before making a property offer.
Negotiating a property sale is all about give and take, and price is often not the only thing on the table. Other elements can be up for discussion such as the length of settlement, deposit amount, repairs required or the inclusion of property fixtures and fittings etc.
No matter how stressful the negotiating process may get, try and leave your feelings at the door and apply pressure only if you are confident your terms are acceptable – remembering emotion and urgency could cost you the sale.
Learn more about negotiating a property sale.
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