Pre Auction Offers – Can you buy sooner?

We are often asked to explain the how and why of buying a property early under an Auction marketing program. We all have come across the situation with buyers where they see a property and want to secure it now! Not wait for the entire term of the Auction campaign. So in this case what would a keen purchaser do? I put the question to David Johnstone our Auctioneer to answer:

“It’s an Auction.  Can I buy it prior?  The simple answer is Yes”.

Barfoot & Thompson have a procedure in place that allows buyers to make an offer on an auction property prior to the proposed auction date.

My name is David Johnstone, and I’m one of Barfoot & Thompson’s company auctioneers.  I’ve been calling auctions in Auckland on a weekly basis for the last 34 years.  I’d like to take the opportunity to explain the process of pre-auction offers.

Your offer must be on the same terms as currently being offered ie. a cash unconditional offer accompanied by a 10% deposit.  This offer must be written up on an auction contract.  The deposit can be either a cheque or a commitment to transfer the deposit by electronic transfer on the fall of the hammer.  The settlement date will be stated on the auction contract however, in some circumstances, there may be some flexibility – either earlier or later.  That’s a question you can ask your salesperson.

The offer is then relayed to the auctioneer overseeing that auction.

The selling party (vendor) is given the details of the offer confidentially and makes a decision on whether they feel the offer is at an acceptable level for them.  When drawing up your offer you will be asked to read and sign a form called ‘Procedure for Pre-Auction Offers’.  This form details how the process works.  Also in your offer will be a clause that you initial.  This clause states that you cannot withdraw your offer prior to 6.00pm on the second working day after the offer has been first presented to the selling party.  This is to allow enough time for the selling party to discuss the offer and make a decision and then for Barfoot & Thompson to contact all other interested parties and advise them that we have received an offer that is acceptable to the owner, and the auction date has now been brought forward.  Example: if the offer is presented to the owner on a Friday and the offer is acceptable to the owner, then the auction would be called on the following Tuesday before 6.00pm.

At the auction your offer will be the opening bid and the owners will sign a reserve for the same amount.  If no other buyers attend the auction, then the home is sold to you at your offer price.  If other buyers attend the auction and then make an acceptable bid above your offer, you have then been given another chance to either raise your bid or let the property sell to the other buyer.

Over the years, this process has proven to be the fairest way of dealing with pre-auction offers.

At the auction you can see how much other buyers are prepared to pay and make your decision to purchase – or not – very easily.  It is a totally transparent process.

I trust this clarifies the Pre-Auction offer process and removes the mystery some may feel surrounds the pre-auction offer scenario.

Happy bidding!

David Johnstone

Barfoot & Thompson

June 06 2016 05:45 pm

2 Responses to “Pre Auction Offers – Can you buy sooner?”

  1. Back to More Information on Barfoot & Thompson Auctions on 16 Apr 2012 at 3:56 pm #

    […] David Johnstone, our auctioneer explains … Pre Auction Offers – Can you buy sooner? […]

  2. Cara on 13 May 2014 at 3:49 pm #

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