Pre-auction sales on the rise

Pre-auction sales on the rise

June 26, 2017 | by DiJones

What if your ideal property is just about to hit the market? Is there some way to hear about it before anyone else, avoiding yet another nail-biting auction day? If you’re connected to pre-auction sales in your area, you may just be able to sidestep the drama and walk straight in.

What is a pre-auction sale?

Pre-auction sales happen when a prospective buyer makes a bid directly to the real estate agent before auction day and that bid is accepted. There are advantages to buying this way, the most obvious being that you won’t have to bid against other buyers if your offer is accepted.

That said, sellers generally won’t accept a pre-auction bid unless it’s above their desired reserve. A higher deposit might also be a deciding factor, which means pre-auction buyers are very unlikely to pay less for acting early.

Pre-auction vs pre-market vs off market

While pre-auction sales happen after a property is publicly listed, some buyers will make an offer even before the property’s marketing campaign begins. These ‘pre-market’ sales depend on real estate agents connecting people who are intending to sell with keen, market-savvy buyers.

Even earlier sales can take place ‘off market’. A property owner may not be actively looking to sell, but willing to consider offers over a certain price. They may also need to sell quickly or prefer to sell in a completely private way, without the publicity of a campaign and inspection period. Again, access to these off market properties usually requires a connection to agents who know their market inside out.

Why are pre-auction sales on the increase?

The increasing number of pre-auction sales happening across Sydney’s upper north shore makes sense. The market is currently very tightly held, with the relatively small amount of stock on offer attracting huge numbers to every inspection.

Meanwhile, buyers in the upper north shore know exactly what they want and they don’t want to wait to get it. When a property appears that ticks all their boxes, in exactly the right location and school zone, they know there’s no time to hesitate.

What does this mean for upper north shore buyers?

While this may sound like yet more competition for buyers already struggling to break into the market, you can also play this trend toward pre-auction sales to your advantage. Be prepared to make a pre-auction bid by:

  • Registering for property alerts to be the first to hear about a new home on the market.

  • Taking the time to get to know real estate agents working in your desired area.

  • Making sure your finances are in order including home loan pre-approval and a set budget limit to simplify any negotiations.

  • Knowing who to call for any necessary building inspections and council checks.

If you’re considering making a pre-auction bid or want expert advice on how to find these properties in Sydney’s upper north shore, get in touch with our team today.


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