Josh Masters shares his tips on how to beat the property market and avoid auctions altogether.
Do you hate auctions and wish you could skip the whole process completely?
You’re not the only one. Auctions are nerve-wracking, emotional events and can be costly, disappointing and a waste of time if you keep missing out.
With so many properties being sold at auction, it’s easy to feel like they’re unavoidable, and as a seller, why wouldn't you take it to auction with clearance rates nearing 80 to 90%?
But you might be surprised to know that as a professional investor myself, I rarely go to auction.
In fact, 75% of the properties that we purchase for our clients are bought prior to auction. That means they were intending to sell at auction but sold to us prior to actually getting into that auction room.
So how do you achieve this result for yourself?
It comes down to three simple steps.
- Ask the agent whether they’re willing to sell prior
Sounds simple, but when I walk into an open for inspection I ask the agent, "Are these sellers willing to sell prior to auction?"
If they're not, then I'll generally walk away because it's not going to be a great deal for us and I don’t have to waste my time any further.
- Get serious about making an offer
If I'm going to make an offer then I always make sure it's on a written contract - it's unconditional, and I've got a 10% deposit to back it up.
I don’t waste my time putting verbal offers in. The vendor has committed to an auction campaign so you need to get their attention with a real offer.
Agents are very wary of tire-kickers so go in with all guns blazing assuming that you can take it off the table.
- Play fair
While I don’t want to pay top dollar (I can do that in the auction room), I also know that I may not get a bargain basement price if I want to beat all the competition.
Remember, if there’s strong competition and it’s a hot market, there's no point putting in low ball offers for these deals because the seller would rather take their chances in the auction room.
I know that if I go in at a fair price and get a fair deal, over the long term I'll have a great investment in my portfolio that will multiply my returns significantly.
So the next time you’re looking for property and are faced with auctions left, right and centre, don’t feel disheartened. There is a good chance the seller will be open to an offer prior to auction. After all, they’re looking to sell their property and many won’t care how it happens.
Need some expert property advice?
Purchasing and managing an investment property can be both stressful and time-consuming. This is where an expert property consultant can assist. Whether it be assistance with purchasing a property or a full property management service, a property consultant can help you with your investment. If you would like talk to an expert about the options available, please contact us for an introduction to Josh Masters.