Most auctioneers will accept offers before the auction date and present them to their sellers. Making a pre-auction offer is simple: you put in writing what you are prepared to pay for the property, then submit your offer a week or two before auction day. Remember, the auctioneer cannot tell you the sellers reserve price – so you really have to do your research before and auction rules still apply to pre-auction sales (make sure you read the Terms and Conditions carefully)
Your timing is important. Make an offer too early, and the seller may reject it in favour of seeing what other interest the listing attracts. Make the offer too late and the seller may still prefer to go to auction in the hopes of bidder competition driving up the hammer price.
There is sometimes a sweet spot in the middle when sellers are just as eager to be done with the marketing and viewings, as the buyer is to be done with waiting. The risk here is that your offer may be way above what it would’ve reached on auction day or that an unscrupulous auctioneer uses your offer to set the opening bid at auction.
If your pre-auction offer is rejected, be prepared to walk away. The item could still be passed at auction and the auctioneer may get in touch to see if you’re still interested. Either way, you’ll enjoy peace of mind knowing you haven’t blown your budget.
Your other option could be an Absentee bid or, in online auctions, Maximum bid.
An absentee bid a method of bidding for those who cannot or do not wish to attend an auction. Auctioneers will have different procedures for submitting absentee bids but in short, you will usually complete an Absentee Bid form declaring the maximum amount you are prepared to bid to and then the auctioneer will assign an agent to bid on your behalf. In an online auction, you would just assign this amount once logged into your personal profile and the system would bid on your behalf.
A maximum bid placed ahead of the auction which will be executed on your behalf in response to any other bids placed on the lot. If your maximum bid is below the reserve, responsive bids may be placed by the auctioneer on behalf of the seller up to the amount of the reserve set ahead of the live auction. Upon the start of the live auction, if your maximum bid has not yet been reached, the auctioneer will execute the bid on your behalf at the lowest price possible and never for more than the maximum bid amount you indicate.
With the system managing max bids at online auctions, the process very transparent and trackable with the bids assigned to unique IP addresses, so you can be assured that your bidding has been managed effectively.
The risk with max bids is that you’re not monitoring the progress of the auction and may be unknowingly outbid and miss the opportunity to counter.
Each option has its pros and cons. Either way, it’s to your benefit to play your cards close and always ensure you have some room to negotiate post auction.
