How to buy before auction - because now’s a good time

We’re already feeling the effects of the latest Sydney lockdown with vendors and their agents looking for new ways to navigate the changing market. 

What does this mean for buyers? Well, now might be time to negotiate a deal before auction. 

This year particularly being such a hot market,  it has been challenging to broker a deal pre-auction. Vendor agents love auctions not only because of the record prices we’ve been seeing but auctions also act as a great marketing tool to attract other potential sellers.

Unfortunately, lockdowns have meant that auctions have moved online, and they're making vendors and their agents nervous. The technology is new and takes away many traditional auction tactics agents use to entice buyer competition. Falling clearance rates during Sydney’s latest lockdown say it all.  

This market uncertainty means that vendors and agents are more motivated to sell before going to an online auction. But, there are a few things to think about before making a pre-auction offer. 

Firstly, ask if this is the property for you.

It’s very easy to let FOMO (fear of missing out) take over. You should be sure the property you want to offer on ticks all of your boxes, and you're not just jumping on it because you're tired of searching or don't want to miss out. 

Do your due diligence before making a move. 

Having all of your ducks in a row before making an offer is very important, and you should have a solicitor look over your contract and make any necessary changes. Then there's Development Application research, Building & Pest inspections or Strata reports and also your finances to consider. Do your market research to ensure you're planning to offer a fair yet competitive price for the property. 

Your due diligence shouldn't just be restricted to the property itself, either. Look into the local area, public transport options, school catchment, council plans and the facilities available in the suburb to ensure it's right for you. 

Don't be afraid to ask questions.

Understanding the vendor’s motivations will guide your pre-auction offer strategy. You should always ask why the vendor is selling. If they’re an investor, have already bought elsewhere or are relocating to a new city for work, they’ll likely be more motivated to get the deal done. If they’re simply looking to cash in on the heat of the property market and chasing price only, making an offer may not be the best route. 

Get on the same page as the vendor agent.

Just like understanding the vendor’s motivations, make sure you know what the agent is planning to do with your offer once you make it. Will they use it to shop around to other interested buyers? The last thing you want is to be gazumped or have your offer end up in sealed bids.

If you make an offer, ask the agent, is the vendor in a position to exchange quickly? The shorter the time between offer and signing the contract, the safer you are. 

Consider the timing of your offer.

You want to avoid your offer sitting on the table long enough for the vendor agents to nab another higher-paying buyer. So, it's essential to go in with all of the facts and offer at a strategic time.  

While auction scenarios, particularly those online, are stressful and tricky, making an offer before an auction can be too. If you're feeling unsure, having a Buyer’s Agent on your side will give you a head start and help you make the best decisions every step of the way. 

If you have any questions or want to know more, please reach out for a chat about your situation.