AUCTION clearance rates are high and with multiple bidders at many auctions, chances are a lot of buyers are missing out.
In southern states clearance rates are regularly between 70 per cent and 80 per cent at the moment and multiple bidders are lining up to secure their dream homes.
So how do you make sure you win that property?
Should you make an early offer and try and bypass the auction process completely?
Buyers’ agent and valuer Tony Coughran from VFM Property reckons you should.
‘I’ve bought many properties prior to auction day,” he said.
‘Buying a property that is going to auction is really no different to buying one that is being sold through private treaty. Think strategically and always have a plan in place – this begins with making an offer prior to auction,” he said.
Mr Coughran said making an early move could knock out the competition and remove the chances of paying a premium at auction.
‘Emotions don’t even get to play into it (like they can do on auction day) especially if the bidding gets out of control,” he said.
‘Don’t be disappointed if your offer is not accepted; it’s just the start of a process.”
Mr Coughran said the success of buying before auction depended on the property type and the current market in the area you are buying.
‘In an ordinary market if you have done your homework and are making a fair offer with auction-like terms, there is every chance your offer could be accepted.
‘You have to be realistic though, don’t expect an offer to be accepted pre-auction if you’re trying to purchase a great property in a highly sought-after location. Buyers will be lining up come auction day for this type of property and vendors know there is every chance they’ll get a premium under the hammer.”
Empire CEO Chris Gray said if you want to make an offer before auction day, make the conditions appealing to sellers.
‘Unconditional offers (that are not subject to finance, building inspections etc) are always appealing to vendors, as they are serious,” he said.
‘To ensure yours is accepted, you will need to have a conversation with the agent to discuss the vendor’s expectations. Do they want a long or short settlement, or to extend their stay in the property?”
He said be confident of what the property was worth and don’t make an emotional decision when you do find your dream property.
Independent valuations and research will help you work out what to offer.