As we all know, the current property market is a highly competitive one for home buyers. When you have an increased number of highly motivated buyers and an ongoing shortage of available property for sale, spirited bidding duels at auction and multiple offers for properties available through private sale are becoming increasingly common. Thus, it is no surprise to see buyers trying out a number of tactics in order to gain an edge on their competition.
One of these tactics that has become more common is the tendency for buyers to make strong offers on properties well before the scheduled auction day. In fact, recent data from Domain indicates that the number of pre-auction sales around Melbourne is at its highest level in a decade.
Domain’s latest figures show that in February this year 16.7 per cent of properties for sale in Melbourne sold prior to auction. This continues a recent trend, as the proportion of properties selling prior to auction hovered between 16.6 per cent and 16.8 per cent during the last three months of 2019 as well.
These numbers make an interesting comparison with what was happening in the market a year ago. The percentage of properties selling prior to auction in February 2019 was just 11.2 per cent.
The whole question of making an offer prior to auction as a buyer, and accepting such an offer as a vendor, raises enormous questions for both parties to the sale.
If you are a buyer, you need to be sure that your offer is going to be strong enough to not only convince the seller to halt their auction, but to exceed any other offers that your competition may wish to make at the same time.
If you are a seller, whilst the offer may meet your requirements price wise, there is always the uncertainty about whether you could do even better by holding off until auction day. You could also lose some of your current buyers if they feel that you are holding out for more.
In either role, there is no mistaking the value of having an experienced, objective Advocate by your side to help you make an informed decision, whether making an offer, or deciding whether to accept one.
Our team at Ian Reid can assist you with specialist Advocates who help you sell and help you buy, so why not give us a call on 9430 0000 today to talk through your options? You’ll also find plenty of helpful suggestions for property sellers in our free booklet, “Fatal Real Estate Traps Exposed”.