Pre-Auction Offers?

Discussion in 'The Buying & Selling Process' started by FHB_melb, 16th Oct, 2021.

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  1. FHB_melb

    FHB_melb New Member

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    I am a first home buyer in Melbourne and have found a place that I very much like. The agent has said the vendor is unlikely to accept offers prior to auction.

    I would prefer to make an offer prior to auction. Would there be any problem with me submitting a written pre-auction offer in light of what the agent said?

    Note that the CoS + s32 are yet to be issued so obviously this would only be if all is in order with documents.
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    You can try.... I'd say in the current climate, you may have to go in at 20% over the upper range of the estimated range to get them interested.....

    The Y-man
     
  3. FHB_melb

    FHB_melb New Member

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    Thank you
     
  4. The Y-man

    The Y-man Moderator Staff Member

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    You'll also need to make the offer unconditional (i.e. same as auction conditions) if you want them to bite.

    The Y-man
     
  5. Trainee

    Trainee Well-Known Member

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    What would be the point?
     
  6. The Y-man

    The Y-man Moderator Staff Member

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    It's pretty common here - to basically "beat the others to the deal".

    It can be good for sellers too, as it will lock the price in and not leave it to chance for the auction.
    Other vendors use it to gage the market.

    To the OP - also be prepared to up your offer - as it can turn into a "pre-auction auction". As soon as you put your offer in, the agent should (if they are any good!) ring around other prospects (anyone who signed in at opens) to invite offers to better yours.

    The Y-man
     
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Not InSignificant finance risk.

    Unless you have a bit of spare cash/equity to tip in

    Pre auction outcome. valuers will argue more that "overpaid" and not market

    ta

    rolf
     
    The Y-man likes this.
  8. JetstreamVic

    JetstreamVic Well-Known Member

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    I wouldn’t.

    you are showing your hand as to what you would pay for it.

    Unless you are going to pay drug money for the house, why wouldn’t they accept?

    if you are going to pay drug money, why wouldn’t you wait?

    All you’re doing is allowing the rea to say to other buyers, I know that they won’t accept offers prior to auction and FHB is going to pay xxx, so unless you have xxx + $1000, don’t bother
     
  9. lil85

    lil85 Well-Known Member

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    We asked an agent whether we could put an offer before auction, and the agent said no because the vendors live far away. The property was sold in auction, $200k above the price guide with 5+ bidders.

    The same agent offered us another property, and persuade us to put an offer prior to auction. But when we want to put an offer, they said that it must be over the price guide. We ended up not putting any offer. The property then was sold in auction, within the price guide.

    Moral of the story: when an agent knows a property would attract more than 2 bidders, they will try to sell it through auction.
    When the agent feels that the property is not that sellable, they will try to sell it before the auction
     
    momentum26 likes this.
  10. dabbler

    dabbler Well-Known Member

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    I think you are dismissing that the owners have a say !
     
  11. Stoffo

    Stoffo Well-Known Member

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    Ensure you put a time limit on your offer.
    Example, offer of $800,000 made this day 16/10/21 is valid for 48hours/ 2 working days only
     
  12. The Y-man

    The Y-man Moderator Staff Member

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    The good thing with the pro-forma victoria contract is that it has a default expiry of 3 days built in I think unless you delete it and initial it.

    The Y-man