March Tip of the Month

In Melbourne it’s not uncommon to see properties advertised for auction that end up selling before the scheduled auction date. While this can sometimes be frustrating for buyers who are preparing to bid, there are several reasons why vendors and agents choose to sell early.

The most common reason is strong early interest. If a property attracts multiple buyers during the first week or two of a campaign, an agent may encourage buyers to submit offers prior to auction. For a seller, this can remove the uncertainty of auction day and secure a result they are comfortable with.

Another factor is buyer psychology. Some buyers prefer not to compete publicly at auction and will make a strong pre-auction offer in an attempt to secure the property before other buyers have the chance to bid.

Market conditions also play a role. In more balanced markets like Melbourne at the moment, vendors may be willing to accept a strong offer early rather than risk the property passing in at auction.

What Buyers Should Know

If you are seriously interested in a property scheduled for auction, it’s important to understand that the opportunity to buy may arise well before auction day.

That means buyers should ideally have the following ready early in the campaign:

• Finance or pre-approval in place
• Contract reviewed by a solicitor or conveyancer
• Due diligence completed
• A clear understanding of value based on recent comparable sales

Being prepared allows you to act quickly if the agent invites offers.

Equally important is clarifying the process with the selling agent before making an offer. Buyers should understand how the agent intends to manage competing interest and what will happen once an offer is submitted.

Questions worth asking include:

• How will other interested parties be notified that an offer has been made?
• What timeframe will the vendor allow for competing offers?
• Will buyers be given a right of reply if another offer is received?

Having this clarity before submitting an offer helps ensure the process is fair and that you are not inadvertently revealing your position without understanding how the negotiation will be handled.

Buyers Advocate Insight

A well-structured pre-auction offer can sometimes be an effective way to secure a property, particularly if it is supported by strong terms and a clear understanding of the seller’s motivations.

However, it is equally important not to overpay simply to avoid the auction process. In many cases, competition at auction can actually provide valuable price transparency.

Having a buyers advocate act on your behalf can also help remove emotion from the process. They can ask hypothetical questions to determine whether an offer would be considered and at what level, without compromising your position or revealing your true limit if the vendor still intends to proceed to auction.

An experienced advocate can also read the situation more clearly, including assessing the legitimacy of competing interest and understanding the agent’s strategy. This helps ensure the buyer’s position is protected throughout the negotiation process and that decisions are made based on evidence rather than emotion.