Buying at Auction Part 5 - Making a Pre-Auction Bid
If you’re impatient to get your foot in the door on a property, why wait until auction day? You can make a pre-auction bid to get a home before the bidding opens. Just make sure you do it right.
Here are some tips on the steps you need to consider to get it right. From timing the offer, getting the price right and the process you need to go through to make sure it is a legitimate offer.
Getting in Before Someone Else Does
If you’re impatient to get your foot in the door on a property, why wait until auction day? You can make a pre-auction bid to get a home before the bidding opens. Just make sure you do it right and try to remove any emotions from the process.
Get it in Writing
These steps will make your offer straight to the point, and this shows the seller that you mean business.
- Make your pre-auction offer in writing.
- Have a contract and deposit cheque ready.
- Set a time limit.
Making a pre-auction offer is often about getting the house you absolutely want, so let the seller know you’re in this for the long run.
Make sure the price is right
Don’t jump in with an offer that is miles below the vendor expectations, as it isn’t likely to be taken seriously. In fact, it may even make the seller reluctant to work with you.
Making sure you have done your research is your best weapon when it comes to negotiation. Knowing the market, the value of the property you are looking at and what your best offer would be is very important.
Once you know all this, make an offer that is realistic - don't be scared to put your best offer in as it may mean the difference between walking away with the property or not. Also remember that working for a quick purchase can mean the tradeoff is in the cost, so be wary of your budge and if the prices is too high be prepared to walk away.
Get Your Timing Right
By waiting until close to the auction date before pre-offering, sellers and agents will have a concrete idea of the interest in a property. Agents will note disclose offers to you as a buyer but may disclose what offers the vendors refused to accept. You can use this to your advantage and undercut the competition with an eleventh hour bid, and secure a great home.
On the other hand, early research and offers can get you a home before anyone else can do their homework properly.
Pre-auction offers can trigger other parties to give up early, or spark an early bidding war. Done correctly, you can cut out the competition and swoop in on a property with ease.
Need help with bidding at pre-auction? Getting it right can be difficult, which is why the team at LJ Hooker put together a comprehensive guide to tell you everything you need to know to be ready to make an offer.