BIDDING AT AUCTIONS

What happens when the property is passed in to you?

 

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The living area of a new apartment in Canberra

It’s end end of the auction, the hammer has fallen and the bidding has finished

To your amazement – you’re the highest bidder and the property is passed in to you! You’re now standing in front of what could potentially become your new home – everyone’s attention turns to you. What do you do now?

What happens next when you’re the highest bidder?

Since you’re the highest bidder you are allowed to negotiate exclusively with the vendors. If you decide to stop negotiating – the selling agent can kick off negotiations with other buyers. Take comfort in knowing that you have first dibs!

The selling agent may try to invite you inside of the home to chat – don’t head in! Once you pop inside the home, you’re in the vendors territory which could put you at a disadvantage. Instead – let the agent go back and forth between the vendor and you.  Staying outside will allow you to see what’s going on and get an idea if there’s any other serious buyers lurking around. You have time on your side – the agent might be in a rush and the vendor wants a result.

Working out a negotiating strategy

You would have hopefully carried out your due diligence and checked out recent sale results in the area – so you should have an idea of how much the property should sell for.  Having a rough idea of the value coupled with the price it was passed in at will give you an indication of what the seller is expecting to get. You may have also sussed out the reason behind the sale to get an idea of the sense of urgency. Have the vendors committed to another purchase?

Finding the right price

You have an idea of how much you’re going to pay – and what you can realistically afford. You should also now have a better understanding of the price the vendors are expecting to achieve.  It can also be a good idea to ask the real estate agent about what price the property will sell for. Make your offer – and stick to it. Inform the real estate agent that you have made an offer with your bid which passed in – now it’s up to the vendors to come back with a counter.

Don’t tell the agent your final price when negotiating. Try to be vague and don’t let emotions get in the way – real estate agents can sense this!

It’s also a good idea to be a bit flexible – you don’t want to miss out on that dream home over a few extra thousand.

Happy reading – and feel free to share with anyone who may find this info useful.

Jamie

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The information herein is not intended as investment, financial, legal, taxation, building, development or any other advice and must not be relied upon as such. You should obtain independent professional advice and make further independent enquiries before making financial, legal, taxation, building, development or investment decisions.

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