Your Agent Should Know the Current Market Sentiment
When the property market is competitive, as it has been in Sydney’s Lower North Shore and parts of other major capital cities around Australia, there are many vendors who may find themselves in the lucky position to receive offers from buyers prior to their property going to auction.
This presents a slight dilemma: to accept or not to accept.
The answer to this question lies in how much interest your property and its marketing plan has attracted. A pre-auction offer may indicate that there is a lot of buyer interest, but that’s not always the case. Instead you should base your decision, in consultation with your sales agent, on the following factors:
- How many groups have been through your property on inspection days?
- Have there been a lot of requests for your Vendor Statement Documents?
- Are multiple buyers coming back to inspect the property?
What to do when buyer interest is high
If your sales agent can answer in the affirmative to all of the above questions, then there’s a great deal of buyer interest in your property. In this case, other vendors usually only accept an offer prior to auction when it exceeds all of their expectations, and their sales agent is doubtful that a similar or better result could be achieved at auction.
If the offer’s you’ve been receiving prior to auction have only just met your reserve price, and there is still a great deal of interest in the property, there’s a good chance the buyer is trying to score themselves a bargain before auction. In this case, it may be wise to hold off and still take the property to auction.
Remember that, in making a pre-auction offer, the buyer is not only making an offer to purchase the property, they’re also offering to purchase the right not to compete with the market, so their offer should be commensurate with that.
If buyer interest is slow
Things look a little different if it appears that buyer interest in your property has been slow. This is probably the more difficult decision to make, as rejecting a pre-auction offer in favour of going to auction where you property is passed in, could result in that pre-auction buyer lowering their offer.
In this respect, it may be more beneficial for your sales agent to negotiate a pre-auction sale in your favour.
It’s a good idea to discuss pre-auction offers with your sales agent at the time of listing, rather than when an offer comes along. Buyers are typically very educated, are likely to have seen many other properties prior to yours, and this causes them to move fast. Therefore, it’s best to consider what price you’d be willing to let your home sell for prior to auction, so you aren’t caught off guard by an eager buyer.
The key to securing the best price for your property before, at or after auction, is to appoint a highly skilled sales agent, who understands the property market and your local area.
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