Is it better to buy at Auction or make an offer prior?
The answer is- it depends.
The motivations of the sales agent and vendor, and where you are in your buying journey all have a part to play. As does your confidence around what the property is worth.
Quite a few sales agents in Sydney’s desirable suburbs will rarely run a property to auction. A typical campaign for these agents is to show VIP buyers and buyers agents through off-market then list online as “auction forthcoming” if not sold. The property will stay up just long enough to attract a pool of motivated buyers who are then encouraged to submit offers and engage in a negotiation. These agents know their ‘patch’ well and have managed their vendor to ensure they’re agreeable and ready to accept the highest offer when it comes in.
In other circumstances sales agents will 100% run a campaign to auction. For example If multiple beneficiaries of a deceased estate are difficult to manage or the vendor is adamant to see the auction process through. In this case there is no point lodging an offer before, even a strong one. Not only will it not be accepted, it will only give the vendor more confidence to get a better result at auction.
Gathering intel on the vendors situation counts.
For example if they’ve already bought they’ll be feeling some pressure and may be open to a prior offer.
On the flip side if an owner is just selling because they think they can get a really strong price, then a pre auction offer will be a waste of your time unless it’s at a high number.
Then there is your personal motivation. If you’ve missed out on a few properties, have confirmed the vendor and agent are receptive to trade prior to auction and you know what the property is worth, then a pre offer can be the best way forward for your timing and peace of mind.
Knowing what a property is worth (and why) is essential to buying well either at an auction or with a pre offer.
Buying pre auction is a frustrating experience lacking in transparency for most buyers. Buying at auction may seem more transparent but can actually be just as nerve wracking and frustrating.
With good research you can calculate a range of what a property is worth and will sell for.
When you confidently know the range you have the power to choose what you’re prepared to pay, knowing it’s the right price for you and it doesnt really matter if you have to buy at auction or you decide to buy before.
I hope you’ve found today’s buyer tip valuable.
As always, please get in touch if you’d like help to secure your ideal property.
