Enzo Raimondo, CEO of the Real Estate Institute of Victoria commented in his quaintly named column ‘Home Truths’ in Herald Sun, on Saturday 5th May on pre-auction offers, headed Make your Play Early.
“The proportion of homes sold before auction has fallen from about 23 per cent to 18 percent.”
There are simple explanations.
Buyers understand, if you wait until the day of auction they are likely to buy cheaper than what they might have offered!
Real estate agents really want to use all the advertising money allocated, and unless the offer is truly exceptional, the agent will want the auction to run its full distance as it helps their profile and with a bit of luck there will be a ‘show’ on the day.
Even if the offer is not exceptional the other benefit for the agent and vendor is it declares the buyers ‘price-hand’. Even if the auction fails in competition, the likely result will be it is passed in on a ‘vendor’s bid‘ at the very least a little above the pre-auction offer to allow some negotiation.
“A successful offer can allow you and the vendor to avoid the auction”
Agents want the process to go the distance, it ensures profile for the agency and further opportunities to ‘smoke out’ prospective vendors.
So what should you do if you really like a home that is being auctioned.
Declare your interest (not price!) to the salesperson and indicate if the vendors were entertaining the idea of selling prior, ensure you are contacted.
Keep in regular contact with the salesperson, you will be surprised what some will tell you if you are friendly!