There’s nothing more frustrating than preparing for an auction only to discover that your dream home was bought the day before. All that wasted time, research and effort!
Many people are unaware that it is sometimes possible to purchase prior to auction. This is possible even when properties are in high demand and prices are high.
Buying a home prior to auction can be an excellent choice for some home buyers. Here is our advice on how to buy a property before auction.
Expert Brisbane Buyer’s Agent Advice – How to Buy a Property Prior to Auction
Buying property before auction is not always a straight forward process. In fact, it’s often important that the stars align for both the buyer and seller for a transaction prior to auction. However, a buyer should never assume that a seller will see the campaign through to the end. Personal circumstances and market conditions are changeable and alluring offers can shut campaigns down.
Why homeowners sell prior to auction
The first thing we’ll want to understand is why homeowners sell before auction. There are several reasons.
For example:
- A seller may want to sell before auction because they have found a property that they want to buy. Selling before buying allows them financial certainty around putting their best offer forward.
- A sale might happen before auction because the seller has already purchased their new home and committed to an earlier settlement date.
- A seller might find the auction and open home process stressful. This can be the case for older vendors.
- Market situations may change suddenly, such as the recent unexpected floods in Brisbane.
The process of buying a property before auction
1. Reach out to the seller
If you’re keen to buy a certain property before auction your first step is to reach out to the seller. It’s important to find out if the agent and seller are open to pre-auction offers. If they are receptive this can be advantageous for a buyer in a strong market because it reduces competition for a property.
2. Ensure you have your finance pre-approved
To attract the seller’s attention your pre-auction offer needs to be clean with no conditions. This is how you would have been your position on auction day and the seller will want the same now. Wavering the cooling off period should also be considered if the market is strong. In doing so, the buyer needs to understand what they are agreeing to. They need to weigh up all the risks involved in relinquishing their cooling off rights.
3. Research the market extensively so that you can make a compelling offer
This is where you may want to consider engaging a buyer’s agent in Brisbane. We will be able to advise you on market value through a researched market analysis in the area.
We’ll also be able to negotiate an offer that may persuade the seller not to go to auction. And we can help you work towards an offer that is appealing but where you aren’t overpaying. As buyer’s agent we’re proficient at communicating with selling agents and gaining valuable insights on the vendor’s expectations.
4. Be prepared to increase your offer if the seller’s expectations have not been met
In order to purchase a property before auction, you may have to offer slightly more than you want. However, it could still end up being less than what you might bid at auction under extremely competitive and emotionally charged conditions.
Beware of the risks of pre-auction offers
Pre-auction offers do have risks. The biggest one being that the selling agent takes your offer and uses it to start a bidding war. This may cause you to become involved in a hidden auction rather than a public one. If a seller rejects your offer the agent may also end up using your offer to set the reserve price.
Time to Get Help
If you’re still uncertain about the best strategy to pursue or how to buy property before an auction, get in touch. Our Brisbane buyer’s agents can help advise you and streamline the process.