THE AUCTION-RUN-AROUND

How buyers can get noticed.

We are interested in a property which has been set to go to auction shortly.

Over the last week and half the real estate agent has contacted us every second day saying that other parties are making bids.

It started from $1.35M and is now around $1.45M…however, we don’t really know if there are any other parties biding.

It’s like a silent auction with unregistered bidders (which if it was an official auction where registration is required would make it illegal) where you don’t have any idea if there are any other bidders.

Do you have any comments on how to manage this matter?

You are getting the classic auction-run-around.

I recommend the following three courses of action:

1. Tell the agent, in writing, that you are VERY keen and that you will pay a HIGH price and that the agent should not sell to any other buyers without first giving you the chance to make another offer.

This puts the agent in a difficult position because he/she has a legal duty to get the best price for the seller.

If the agent sells the property for a lower price than you would have paid, then the agent may, technically, be sued by the seller for the difference.

So, make your letter clear that you are quite likely to be the highest paying buyer for the property. This should get the agent’s attention.

2. Contact the owner or the owner’s lawyers and let them know you are a keen buyer and prepared to pay a HIGH price and that you want to be notified BEFORE the property is sold to another buyer.

This, of course, is not just in your interests, but, quite likely, in the interests of the seller.

If the sellers know that there is another buyer (you), then they should give you the opportunity to make your best offer before they sell to anyone else.

Most times, when buyers lose properties (in these circumstances) it’s because the owners were not even aware of the existence of the buyers. And the agents didn’t care because, after all, the agents can only get one commission because no matter how many buyers there may be, the agents have only got one house to sell.

So, shove your way to the front. Be noticed.

3. Don’t get too concerned with what everyone else (agents and buyers) is or is not doing. Just focus on what you do and what you can pay.

In these circumstances (where it’s a family home which involves your heart) it may be best to work out your absolute maximum and offer that in writing to the agent with a copy to the seller’s lawyer and to the seller.

If you miss out because someone pays more, well, at least you know you gave it your best shot.

If you need any more help, you can call Real Estate Monitorsanytime on 1800 1800 18 and you should be able to speak to a live and competent person almost instantly.

No charge, of course.

 

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