What should we do?

We found a property we like. It is going for auction at end of August. We think there may or may not be much competition.Let’s call that property A.
Meanwhile another agent rang us yesterday. He has a property for sale on the same street.
It is private sale and not yet gone to realestate.com.au. He said make him a good offer he will present to vendor. Let’s call that property B.
Property B is in a better condition, everything else much the same- land size etc. but the asking price for property B is 50-100k more than quoted price for property A.
We think if we offer to buy property B now and if Property A passes in, we will shoot ourselves in the foot paying too much for property B. But if property A sells at auction at a good price , we may have picked up a bargain . Not sure what to do, what would you do?

 

Make your best offer you're comfortable with on property B.

If it falls through, attend the auction for property A and bid up to the limit that you're comfortable with.

If you don't win the auction, keep looking. Property C will come along sooner or later.

 

Bear in mind that, being an auction, the "quoted price for property A" may end up being 'pie in the sky' unrealistic vendor's expectations or be even under-quoted to attract more buyers to the auction.
If you play your cards wrong, as you know, you may end without either A or B.

Do as @Peter_Tersteeg said.

 

Work on your mindset; this would be the wrong way to look at it.

Don't second-guess your decisions when new information becomes available.

Many years ago, Greg Chappell was asked a year or two after retiring something like "if you knew then what you know now, do you think that retiring was the best decision?"

He wisely responded with something like: "Well, the fact is that I didn't and couldn't know then what I know now. You make a decision based on what you know at the time, and then you channel all your energy into making sure that was the best decision."

You can't make a decision based on information you don't have. You make the best decision that you can based on what's known, and then you don't look back - you only look forward and make it the best decision.

If you buy property B and then property A goes for lower, so what? Clearly, you liked property B and you paid what you thought it was worth. Enjoy it, and don't even look at what property A goes for.

If you miss out on property B, it's because it cost more than what you thought it was worth. If you also miss out on property A, likewise. So wait for property C to come along!

 

The first rule when buying property is to believe that you are in the strongest negotiation position.

I would recommend you change your beliefs.

 

There are no bargains (not in desirable streets and suburbs). It apparently comes down to your appetite for risk, and whether property B is snapped up by someone else (the agent would have told other potential buyers about it).

And have a careful look at the section 32s/vendor statements - there may be a nasty surprise there regarding property B, hence the quick, quiet sale...

 

End of August is 18 days away.
The specifics of the properties are not known so I'll just say things based on what you have said so far.
First of all, any real estate agent worth their salt will know not to over quote for a property going to auction. Either they will just list it as auction and leaving the price blank or, they will under quote to bait people in, a lot of people, probably that includes you.
The idea is to get at least 3 or 4 bidders to keep the auction going, preferably past the market value. When you are in an auction, agents will show up next to you as if to support you. What they are really doing is whispering into the ear that you are about to win, one more bid will do it. But it generally does not, and this goes round and round.

But I digress.

Now, about Property B, talk to the agent, what conditions are they willing to sell by. Ask if they will give you a cooling off period of 20 days. Its a long shot, but does not hurt to ask. The idea is if they agree, then you give the .25% and be prepared to loose it if it comes to that.

Then attend the auction at the end of August. If lets say you really do score great results at the auction, then property A is what you are purchasing. If you loose the auction, then complete the sale of Property B.

Seems like the concept of bait pricing is something you may want to brush up on.