Across most blue-chip suburbs in Sydney, the vast majority of properties sell through the auction process.
However, it’s important to understand that many properties never go all the way to auction day.
While a property is scheduled to go to auction, if you ask a sales agent whether they are willing to accept offers, most will say no, but the truth of the matter is that if the offer is right, then they will accept an offer.
The main consideration with this situation is what a vendor is willing to accept. Your job as a buyer is to find out what this number is.
To understand how you go about getting a better idea of what the vendors expectations are, it’s important to trace back their journey.
Generally, sellers meet with the selling agent and at which time, the selling agent will be the one who tries to get clarity around what the vendors ‘price’ might look like. They will likely have discussions around what they want and how that compares to the current state of the market.
As a buyer, your first point of contact is with a sales agent. The better your relationship with the sales agent the more likely they are to share details about the nature of the vendor’s motivations to sell and what their asking price might actually be.
A sellers motivation is very important as it determines the level of urgency. Sometimes, this motivation is very clear for all to see. It can even be in the property listing itself. However, when markets are hot and favouring the seller, there is no real need for the sales agent to release additional information about the seller as this can potentially weaken their hand in a negotiation. Their job is ultimately to get the best deal for the vendor.
If you do have a good relationship with the sales agent or at the very least are able to build some level of rapport, you can then potentially get a clearer idea of what the seller actually wants.
From that point, you’ll need to determine how that price fits in with what has been happening in the market at that point in time. The best way to determine this is to look at recent comparable sales for that type of property in that location. However, it is also well worth speaking to other sales agents who operate in the same area.
These agents can give you an idea about how many people are attending the home opens and also the level of interest for that type of property at the current time. Good sales agents are often on the pulse of the market very closely.
The more information you can gather the better.
It’s also important to understand that if you’re going to make a pre-auction offer, it is likely going to need to be both an attractive offer in the eyes of the vendor and likely your very best price.
Given that the property is slated to go to auction, you will need to bid strongly.
If you feel that the vendor’s expectations are realistic and the property represents value in the current market environment, then you should have no problem putting in your best offer early on.