Ep. 88. Offer before auction, or wait: Why Playing It Safe Costs Sydney Buyers

Should you make an offer before auction, or is that just fear talking? I break down how to read a vendor and an agent before you move, why an early offer can push up the price guide, and why the transparency of an auction room can actually work in your favour.

Listener FAQs

Does making an offer before auction get you a better price?

Not necessarily. Unless you're confident a deal can be done before auction and you understand why the vendor would take it, you're often paying a premium to avoid a bidding war. In a softer market, that bidding war may never have happened.

What happens to the price guide if my pre-auction offer is rejected?

In NSW, if you offer above the guide and it's knocked back, the guide has to move up. That tells every other buyer someone was prepared to pay that much, and it raises the floor you'll face at auction.

How do I know if there's real competition on a property?

Agents rarely tell you when they're flooded with interest, because they don't want to scare you off. The reverse tell is louder: if an agent is calling you several times a week asking for an offer, they probably don't have anyone else.

If I'm the highest bidder and it passes in, do I get to negotiate first?

It's a courtesy, not a legal right. The agent can still go back to the other parties. If you're serious, don't announce loudly that you're done, because that frees them up to do the deal with someone else.

When will an agent refuse to consider an offer before auction?

Often when the vendors can't agree among themselves. An acrimonious divorce or a deceased estate with several beneficiaries usually has to run to auction so the result plays out in front of everyone.