Conundrum - offer before auction, or not?

[groperfish]

I assume u have done the pest and build and other checks on the place u want to bid on tommorow ?

ta
rolf


I have the opportunity to bid at auction tomorrow on a property, however recently a deceased estate has come up, which wife loves. Agent indicated *at this stage* they won't be considering pre-auction offers.

I'd be willing to go up to the place my wife wants, but we'd also be willing to bid at the place tomorrow, if the price is right.

Q: Should I phone the Agent in the morn and make an offer at exactly the upper expected, unconditional (we'll be bidding at auction anyway if the offer isn't accepted and we have pre-approval) before the OFI tomorrow, stating that we will bid if not accepted? Good strategy, or flawed?

Please excuse my ignorance. First home and I am still learning.

 

[Rolf Latham]

When making a pre aucton offer Id suggest you make sure the seller knows thats it, and you WONT be bidding at auction

Otherwise, all u are doing is setting a floor for the auction.

ta
rolf

 

[groperfish]

When making a pre aucton offer Id suggest you make sure the seller knows thats it, and you WONT be bidding at auction

Otherwise, all u are doing is setting a floor for the auction.

ta
rolf

Hey Rolf,

Thanks for the advice, and if you don't mind, I'll get your advice a little more...

We did not bid on the weekend - place was not right for us, however, the other I mentioned (Auction in a week) is perfect. The upper expected is 415,000, according to the agent.

As mentioned, we'd like to put in an offer prior to auction (there are other properties are on auction the day before, which we would bid on if we were sure we won't win the above).

How would you approach this? If our offer isn't accepted, we can assume it'll go 10-20% higher than the upper expected, which we can't afford, and therefore we will probably have a property even before it goes to auction.

My plan is: phone agent, offer something slightly above the upper (our definate max), stating that we won't be bidding at auction anyway. Make this offer asap, at 3pm and with a four hour deadline?

Thanks for your suggestions - much appreciated.

 

[Propertunity]

My plan is: phone agent, offer something slightly above the upper (our definate max), stating that we won't be bidding at auction anyway. Make this offer asap, at 3pm and with a four hour deadline?

If the agent has been around the traps for a while (and he may not have been) then this strategy smells to me of "novice".

I have tried before to pass on negotiating techniques to newish posters and to not much avail. It takes some years to learn and practice and fine tune. There are many good books and quite a number of posts in here to read on the subject.

I'd never offer above the upper. Only offer what you know it is worth if you think there is a possibility of losing it. Price range - upper / lower is all irrelevant. At the end of the day a valuer has to be convinced that what you are paying is the right money - or you won't be getting the finance.

 

[RightValue]

Based on yor looking at the market ... what do you think it will sell for at Auction?

Trust me the agent knows this as well as you.. with no shortage of buyers they will not recomend acceptance unles it is an offer close to what the current maximum market price will be.

In the current market I would be surprised if the owner would accept a pre aution offer. The upper end of the advertised price range is more likely the bottom end of the realistic value range .. lots of Auctions are going well above the top of the advertised range.

As mentioned. ... why show your hand? Any offer will have to be as unconditional as an Auction bid.

Maybe try going to the Auction and bidding what you are prepared to offer as a knockout bid at the start.

cheers

RightValue

 

[groperfish]

I think it'll sell for maybe 10% on top of the 415. Maybe 15... We can't go that high, so we are probably outta luck.

I just thought that they may consider it, and after all - what can it hurt. At least we know and can then bid on a property beforehand...

Or do we hold out, just in-case.

If the agent has been around the traps for a while (and he may not have been) then this strategy smells to me of "novice".


I'd never offer above the upper. Only offer what you know it is worth if you think there is a possibility of losing it. Price range - upper / lower is all irrelevant. At the end of the day a valuer has to be convinced that what you are paying is the right money - or you won't be getting the finance.

Propertunity, why not put in an offer slightly above? I think it is worth that (perhaps slightly more), but in this market I am under the opinion it'll go for well above. People going nuts before the end of Vic Gov't FHOG subsidy, etc.

Thanks again everyone.

 

[Jacque]

Hi Groper

From all accounts of what I've read about Melbourne auctions at the moment 10% above the anticipated "guide" is not at all uncommon.

Best of luck with it, whatever way you decide to play it. Hope the outcome is worth it to you

 

[Lynchy]

What did you end up doing?

 

[dupli]

How did it go?

Yes im curious how it went.

With our house we made a pre-auction offer partly because we had to make a decision between this and another house selling earlier, but also because we believed the price was going to go at least a bit above the asking price.

 

[groperfish]

Hi all,

Apologies for the late reply; we did phone the agent and requested to put in an offer. He said that it would be a waste of time as the vendor wants to go to auction. So, I never mentioned to him what we were willing to offer.

 

[Learnings]

I just baught in melb pre auction, after looking for around 8 months and feel i baught slightly under value.

I think the decider for the vendor was handing over the signed contract copies, deposit cheque, and a nearly-fair unconditional offer. From the vendors point of view whats a few grand when youve got a solid offer.

I think price is over-rated in offers?

PS: My vendor was "definetly" going to auction too, just hand over the signed stuff with some money attached and take it from there