Avoiding the Bidding War: The Smart Approach to Buying a House Prior to Auction
Introduction
In the ever-competitive Sydney property market, purchasing a house can often turn into a high-stakes bidding war during auction day. However, is the market conditions allow there is an alternative - buying a property prior to the auction. This strategy can save you from the stress and uncertainties of a bidding war while increasing your chances of securing your dream home. In this blog post, we'll delve into the advantages of buying prior to auction, when to buy at auction, the ideal scenarios for adopting this approach - and explore the significance of issued contracts, supply and demand, and registered bidders leading up to auction day.
The Advantage of Buying Prior to Auction
Avoiding Bidding Wars: When you buy a house prior to the auction, you eliminate the risk of getting caught up in a fierce bidding war. This can be particularly advantageous in a highly competitive market like Sydney, where demand often surpasses supply, driving up prices during auctions.
Securing the Property Sooner: Buying before the auction allows you to secure the property earlier than the auction date. This is especially appealing if you're eager to move quickly or if you've been searching for a long time and have finally found the perfect home.
Negotiating Leverage: Purchasing before the auction gives you the opportunity to negotiate with the seller directly. Without other potential buyers involved, you may have more leverage in negotiating a better price or favorable terms.
The Auction for 8 Cliff St in Manly. Picture: Tim Hunter
When to Buy Prior to Auction and When to Let It Run
Knowing when to buy a house prior to auction or let it run to auction depends on several factors:
Market Conditions: If the market is highly competitive with limited supply and numerous eager buyers, purchasing prior to auction might be a wise decision to avoid getting embroiled in intense bidding.
Property Desirability: If you've found a property that aligns perfectly with your criteria and it's expected to attract significant interest, buying prior to auction ensures you don't miss out.
Seller's Motivation: Gauge the seller's motivation to understand if they are open to early offers. If they are looking for a quick sale or are in a favorable financial position, they may be more receptive to offers before the auction.
Your Budget: If you have a strict budget and cannot afford to engage in a bidding war, making a pre-auction offer might be your best chance of securing the property within your financial limits.
The Role of Issued Contracts and Registered Bidders
Issued Contracts: Prior to auction, the seller will prepare the Contract of Sale. The number of issued contracts can provide valuable insights into the level of interest and demand for a property. As prospective buyers express their interest in the property, they request access to the Contract of Sale. The more issued contracts there are, the higher the likelihood of strong demand for the property. Conversely, if there are relatively fewer issued contracts, it may suggest that the property has not generated as much attention. In such cases, making a pre-auction offer might present an excellent opportunity to negotiate with the seller directly and potentially secure the property at a favorable price before facing potential competition during the auction.
Registered Bidders: Before the auction, prospective buyers must register their interest if they wish to bid to purchase the property. Knowing the number of registered bidders can give you insight into the competition you might face during the auction. If there are several registered bidders, buying prior may be a more appealing choice to avoid a bidding frenzy.
In the highly competitive Sydney property market it is wise to engaging the services of a buyers’ agent who can provide you with a strategic advantage in navigating the competitive real estate market. By avoiding bidding wars, securing the property sooner, and leveraging negotiations, you increase your chances of successfully acquiring your dream home while enjoying a smoother and less stressful buying process overall.
So, if you're considering purchasing a property, partnering with MacKenzie Buyers Agency is a wise step to take.
📧 aaron@mackenziepropertygroup.com.au
📱0431 148 187
