If you’ve fallen in love with a house but you don’t want to risk losing it at auction, you can always offer to buy it privately. Auctions can be a daunting experience, especially for first home buyers. Not only do you have to be well researched on the property and your own financial position, you also have to be ready to out-bid other prospective buyers in front of the public. So, how can you buy a house privately, even if it’s going to auction?
Make a pre-auction bid
When you’ve found a house you want to purchase that is scheduled to go to auction, you can always make a pre-auction offer through the agent. The earlier you do this, the better as you’ll give the vendor time to consider your offer instead of waiting for the auction sale date. Once the agent takes your offer to the vendor and they agree to it, the negotiation process that follows is the same as buying a house via private sale. Keep in mind that some vendors have chosen to sell via auction because they want a higher price for their home or a shorter cooling off period, so be willing to negotiate other aspects of the sale when you make your offer.
Be ready to put in an offer
Make sure you already have your pre-approval before you put in your pre-auction bid with the agent. Doing this will help speed up the process of sale which can also help convince the vendor to accept your early offer. It also allows you to safely negotiate the price without overstepping your means. Before you put in your offer, have a building and pest inspection of the property complete so you can also offer a shorter cooling off period when you make your bid. If you want to be ready to sign the contract as soon as your offer has been accepted, make sure you’ve already reviewed it with your solicitor or conveyancer and are comfortable with the terms.
Be prepared for other bidders
While the house is scheduled to go to auction, you might not be the only interested buyer who has made an early, pre-auction bid. Much like at an auction, other offers that are made can drive the price of the house up. If there are multiple parties interested in the property and the vendor is willing to sell to the highest offer made, the agent may continue contacting you with the counter offer. You’ll need to be ready to offer more than you did initially, so it helps to have a budget in mind before you get there. When setting a budget, consider your pre-approval, as well as how much money you’ll need to spend on renovating the property and any taxes or moving costs that will follow.
While properties may be scheduled to sell at auction, vendors may be willing to accept a pre-auction bid. Make sure you speak to the agent about making an offer as soon as you can to avoid missing out.