Measuring the potential success of your auction can help you establish whether or not to accept a pre-auction offer. You can tell if your auction is shaping up to be hot by answering these questions about buyer behaviour:
Have you had many buyers request information?
Have you had a number purchasers request contracts or pre purchased pest and building reports?
Are multiple potential buyers coming back to inspect the property time and again?
If the answer is yes, you’ve likely got one hot auction on your hands with a lot of buyer interest and activity.
Pre-auction offers when buyer interest is high
Unless the offer presented to you prior to auction truly exceeds all of your expectations, you may be well advised to take the property to auction and let the buyers ‘fight it out’.
Offers made prior to auction must be exceptional in price and favourable in all conditions, as buyers are not just purchasing your property – they’re purchasing the right not to compete with the market.
What if buyer interest seems low?
Perhaps your property isn’t quite as inundated with buyer interest, and an attractive pre-auction offer presents itself. Should you still continue to auction day, or take the money now?
It all depends on the offer’s timing. Rather than passing your property in at auction – thereby allowing your key buyer to see there is no competition to drive their offer upwards – it may be strategically beneficial to negotiate a pre-auction sale in your favour. If the offer for your property is better than any other party has indicated, it may well be worth considering.
Each property is different. If you have lots of interest and enquiries it may be best to continue with the auction. If things are not as busy as you’d hoped sometimes it can be more beneficial to sell prior to auction.