Property investors and home buyers need to determine quickly whether a property is likely to make it to auction in the current Coronavirus climate, say leading property experts.
Real Estate Buyers Agents Association (REBAA) president Cate Bakos said with global restrictions on COVID 19 moving rapidly, there was a high chance vendors could start choosing to take the ‘money and run’, preferring to accept early offers rather than risk seeing how many buyers turn up at auction.
“On the flipside, smaller auction crowds can present significant advantages to buyers looking to negotiate with less competition,” she said.
“As a buyer it’s hugely important to understand the motivation of the vendor and to make sure you have regular, open dialogue with the real estate agent involved.”
Ms Bakos said it was reassuring to see auction clearance rates holding firm in our major cities last weekend in the face of strong stock volumes.
“Auctions were well attended and there were plenty of super-strong results out there, namely for the crowd-pleaser homes with limited compromises or negatives,” she said.
“This weekend certainly demonstrated that well-located, quality homes are still being hotly contested. Lending rates are at an all-time low and many home buyers are keen to capitalise on this potentially limited chance to get into a market they would otherwise have been priced out of.
“We can expect to see some buyers who decide to sit it out, but we’re also seeing some opportunistic buyers who missed out last year returning to buy in softer conditions, keen to make up for the mistake they made last year when they could have bought in their desired suburb but didn’t.”
Here are REBAA’s tips for determining whether a property will make it to auction:
Understand the vendor’s motivation for selling
Now more than ever, it’s important to understand the reason the vendor is selling. If that reason is not rock solid, then there is a high chance the property could be pulled from the market.
- Understand how the competition is tracking
Try and understand how many other buyers are seriously interested in the property and what they’re saying. Conversations with the selling agent should determine how many other motivated buyers there are. Few interested parties could prompt an early offer.
- Maintain dialogue with the selling agent
Communicating with your selling agent is extremely important to understand how the vendor is tracking and whether the property is likely to go to auction.
- Be purchase ready
Make sure you are purchase ready should the vendor be open to early offers. Make sure you are finance ready and have done the appropriate due diligence. Also be prepared if an auction date is brought forward early.
- Be adept at negotiating
In situations where a vendor decides to pull the auction be ready to pivot the auction scenario into a negotiation that’s private and feasible for the buyer.