'Will you take an offer prior to auction?'
It’s a question that most buyers will ask the selling agent at the point of inspection when a property is listed as an auction sale. I hear it all the time and whilst responses can be mixed, one thing is for sure.
An auction is an agent’s way into market share.
What does this mean? An auction is street theatre, free advertising to a crowd of prospective sellers as much as potential buyers. An auction not only draws a crowd of people who live outside the area but more likely than not, neighbours and residents of the street will also attend out of interest.
An auctioneer who is engaging, approachable and make the auction enjoyable by taking the tension out of it will always be well received by the attendees. By having a property successfully sell at auction, the selling agent now holds a key position in the market for the street, block and even suburb of the property.
So I shouldn’t make an offer prior to auction? Well, in my opinion, the downfall for a buyer to place an offer prior to auction is that you have shown your cards too early. If the offer is on the higher end of the range, the auctioneer already has intel about where you feel the value lies and can pull it out of you during the auction process.
If a vendor has committed to a campaign to go to auction, chances are that they have already mentally prepared for the stress of auction day and believe that they will get the highest possible price for their property by having all buyers battle it out.
Always remember, an auction is an agent's way in to gain market share.