How do you negotiate a pre-auction offer or a post-auction deal if you miss out on the hammer?

As an auctioneer, and broker, when visiting with sellers I acknowledge the potential for a pre-auction offer. When a pre-auction offer is presented, I remind them why they chose the auction method. It is their full right to accept an offer that comes in pre-auction, but, I advise them to follow the auction and sale method as it can be a detriment to the auction company's reputation and business. If you advertise publicly of the auction and then privately sell, prior to the auction, it causes quite the negative emotion from those potential buyers. The general public loses it's trust in the company when this is done. I present pre-auction offers but, rarely have they accepted, it is better for the buyer to be prepared the day of the auction.

As for pre-auction offers, we actively encourage them as they provide a sense of urgency and prompt prospective buyers to commit to a decision. Nonetheless, the decision to accept such an offer hinges on numerous factors that the auctioneer must consider carefully. My role as an auctioneer is to secure the highest possible price for the property while ensuring a smooth and efficient sale. If we receive a pre-auction offer that aligns with the seller's best interest, we will provide them with all the relevant information to make an informed decision on whether to accept the offer or not. Ultimately, the seller's interests take precedence, and it is their decision to accept or reject the offer.

There are a few things to consider before you make a pre-auction offer. The first is timing; if you make an offer on the day that the catalogue is launched, the auctioneer is in no position to advise their client as to whether or not yours is the best offer they will get as the marketing hasn't even got started yet. Consider making your offer within the last 7 days before the auction. Secondly, a low-ball offer hardly ever works; at best you'll receive a polite "no", at worst the auctioneers will see you as someone unserious. Finally, make sure you are in a position to exchange as soon as the offer is accepted; if you delay, you might miss out, or you might be seen as unreliable and this could prejudice being offered future deals.

Additionally, it is important to note that regular attendees of auctions are well-versed in the process of pre-auction offers and understand that some properties may be sold prior to the auction date. This aspect of the auction marketing process can add another layer of excitement for buyers.

Doing your homework beforehand is key; so ensure that you have done all of your due diligence before you bid. Remember to read the special conditions of sale, checking particularly carefully for any additional fees that might be payable by the buyers. Make sure you've viewed the property (I know this sounds obvious, but you'd be amazed by how many buyers don't!). On the day, set yourself a bidding limit and be disciplined; the auctioneer's job is to get you to bid as much as possible for their client and will work hard to get you to make "just one more bid". If you are buying with finance, get your funding in order well before the auction day and have the required deposit easily accessible, as you'll have to pay that on the day of the sale.

Acting quickly with post auction deals is key; there's a whole cottage industry of property traders who try and pick up bargains that have gone unsold after an auction. Try and speak to the auctioneer ASAP after the sale, asking why they felt a lot didn't sell, what the reserve was, what the bidding reached in the room and how many registered bidders there were for it. The auctioneer can do a deal at the reserve price without further authorisation from the seller, so if you are prepared to offer the reserve, the deal can be done immediately. But don't always assume that you will get the property for less than the reserve, I have had numerous occasions when an unsold lot has reached OVER the reserve due to three or four people making offers.

Acquiring a property can often be an arduous and fiercely competitive undertaking, not only limited to auctions. However, I posit that purchasing a property through auction can be a relatively less daunting experience.

From the seller's perspective, an auction has the fundamental advantage of creating a competitive bidding environment. Plus, with auction a fully binding exchange of contracts takes place immediately, with the buyer paying a 10%, non refundable deposit on the day of the sale, with completion usually taking place 28 days later. The immediate exchange of contracts affected by a sale by auction also eliminates the possibility that a buyer may try to renegotiate the agreed price after survey/valuation and the fully transparent nature of the arms length transaction that auction affords, mitigates any of the doubt as to whether best price has been achieved that may sometimes arise following a sale via private treaty.

A subscription to the Essential Information Group is a good place to start (think of them like the Right Move of the auction world) as they have a database of all property auction sales dating back to the early 90's, information about forthcoming auctions and the lots listed in them. You also need to have a great solicitor to check over legal packs and affect your completions as well as trusted tradesmen to provide you with quotes for cost of works if renovations are required to your purchase. Also, get to know your auctioneer; we're a pretty friendly bunch and we're always happy to talk about all things auctions!

While I appreciate the invitation from LinkedIn to contribute my perspective to these AI-generated articles, it is crucial to possess a comprehensive understanding of the subject matter when utilizing AI for content creation. Although AI is an impressive tool, it still has limitations. Furthermore, I must emphasize that the AI-generated article in question contains flaws and inaccuracies. It is crucial to recognize that AI cannot replace the insights and knowledge that human expertise brings to a topic. Therefore, it is essential to verify the accuracy of AI-generated content before relying on it for decision-making or informational purposes.