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PPG_Blog_June_image 1_making an offer before auction

When a house or apartment is advertised for sale by auction it does not mean you have to wait until auction day to buy it. A pre-auction offer to the vendor can be made through the real estate agent who is marketing the property.

According to the REIV, 18% of all auction sales this year have been sold before the day of the auction; this compares to 19% at this time last year. So, if you are interested, it is sensible to consider making an offer, lest you miss out. With that in mind, there are a number of advantages in making an offer, even if the offer is rejected.

A successful offer can allow you and the vendor to avoid the inevitable auction day jitters and uncertainty. It is also the case that, even if your offer is unsuccessful, the vendor is less likely to sell to a higher bidder without giving you another opportunity to make an offer.

Some people believe that making a pre-auction offer is one of the easiest ways to pay more than you have to for a property. This is unlikely if you have done your homework and researched the market. Besides, if you do make an offer, it has to be an attractive one that gets the vendor’s attention and convinces them not to wait until the day of the auction.

There are a couple of things you can do to make the offer attractive. Firstly, put the offer in writing; secondly, attach a time limit after which the offer expires. In some cases, presenting the offer along with a cheque for the deposit can really show the vendor that your offer is serious and that they may be better off not waiting until the auction.

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