If you have to compete with another buyer, start from a position of strength.
So you’ve been through a property a few times and you love it! Mortgage Choice Port Melbourne, as your local Mortgage Broker, is underway with your Pre Approval and you’re getting psyched up to bid at the auction in a week or so. Then the agent calls “the Vendor has received an acceptable offer. The property will be sold unless we receive a higher offer by 5 o’clock tomorrow”. Your heart sinks. The buyer has probably put in the offer because they don’t want the stress of competing at an auction and they’re worried about being bid out of contention. But if the property doesn’t go to auction, how are you supposed to know who you’re bidding against, and how much they’re prepared to pay?
It may be frustrating, but inviting buyers to exceed a pre-auction offer is perfectly legitimate. It’s a tactic that has become more common in the last couple of years. Pre-auction offers are unconditional, so it’s important to approach the situation from a position of strength. Here’s how to play your cards!
1. Speak with your Mortgage Broker and fast-track your preparation; ask Mortgage Choice Port Melbourne to provide you with a free RP Data CMA report
2. Organise the building inspection (if relevant) and ask your conveyance/solicitor to inspect the contract & Vendor’s Statement (Mortgage Choice Port Melbourne can provide Solicitor’s details for you)
3. In conjunction with your Mortgage Broker, determine your spending limit as this may be different from the property’s market value
4. Get an indication of the price you have to beat & how many other offers there are by calling the agent
5. Price isn’t everything - offer flexible terms if you can (ie quick settlement) – having a Mortgage Broker allows you to compete with fast settlement terms!
6. Submit a genuinely competitive offer in writing … then wait!
It may be nerve-wracking, but once the deadline has passed, it won’t be long until you have your answer. If you miss out, at least you’ll know the property’s market value. The more knowledge you have, the stronger you position next time around.
(Sunday Age, October 28, 2007)