Property auctions can be a high-adrenaline, unpredictable way to secure your next home or investment. But what if there was a way to bypass the bidding war chaos and secure a deal on your own terms? In this post, we explore the three methods of buying at auction and why a pre-auction approach might just be your secret weapon.
The Three Ways To Buy Property At Auction
Most people know about the traditional auction day, where buyers gather, and a fast-paced bidding war unfolds. However, there are two lesser-known approaches:
- Pre-Auction: Making an offer before the auction day.
- Post-Auction: Sealing the deal after the auction if the property didn’t sell or if there’s room for negotiation.
Each method has its own advantages, but today we’re focusing on the benefits of buying pre-auction.
Why Consider A Pre-Auction Offer?
Imagine the typical auction day scenario: you’re surrounded by eager buyers, the energy is high, and suddenly you’re caught in a bidding war that pushes prices well beyond your comfort zone. This was exactly the concern for one savvy buyer, Dino. He explained that the thought of getting into a bidding war and feeling pressured to exceed his maximum budget was simply not appealing.
Dino Chose the Pre-Auction Route. Here’s How He Did It
- Initiating the Offer: He started by calling the auction house directly and submitted an offer that he felt was fair
- Negotiation in Action: Initially, his offer was rejected. But he was clear on his limits - he wasn’t willing (or able) to go beyond his set maximum
- The Turning Point: A few minutes later, he received a call informing him that his offer had been accepted.
- This experience highlights an essential negotiation tactic: The strongest negotiator is often the one willing to walk away. Dino’s clear stance on his top price ultimately worked in his favour, removing the unpredictability of the auction day and giving him control over the process.
The Advantages Of Going Pre-Auction
- Avoid the Bidding War: By making your move before the auction day, you sidestep the frenzied environment and the risk of being outbid.
- Stay Within Budget: Pre-auction offers allow you to set a firm maximum price, reducing the pressure to overspend in the heat of the moment
- Control the Negotiation: Demonstrating that you’re willing to walk away from a deal if it exceeds your limit can give you significant leverage.
Final Thoughts
If you want to buy a property at auction, don’t limit yourself to auction day. Consider making a pre-auction offer - it could help you avoid stress, stay within your budget, and secure the property on your terms.