Should I Accept an Offer Made Before Auction?

In some cases you do not have to wait until the auction day to sell your property. Auction houses will make the auction brochure available before the auction so possible bidders will have the opportunity to view the properties.

If someone is particularly keen it is not uncommon for them to make a bid before the auction even starts, but just because they have made a bid it doesn’t mean you need to accept.

How Much Have They Offered?

Bids made before an auction vary between bidders who are over eager and want to secure the property, to those that want to grab a bargain for lower than the asking price. As a general rule it would be unwise to accept anything lower than the asking price. If somebody makes an offer to you before the auction it is normally a good sign that your lot will prove popular, if you are seeking a quick sale though you might have to consider selling.

If they have offered you less or even the asking price of the property you might want to hedge your bets and turn down their offer and go straight to auction. If you have been offered more than the asking price you should seriously consider accepting it. Although properties can fetch more at auction, you might not want to risk it on the day when you have a guaranteed offer in your hands.

If you have received a lot of bids that are all offering you below the asking price you might want to consider re-pricing as you may have your property valued too low.

Receiving More Than One Bid

If you have had more than two bids you are in a perfect position to play them against each another and see how high they will go. If there is no rush you should think about waiting until the auction. You could put a reserve price on the property at auction which totals the highest bid made before the auction. If the property does not fetch this at auction you could go back to one of the bidders and ask if they are still interested.

It is possible for bidders to register their interest before an auction without actually making a bid. If they do register their interest it means once anybody has made a bid for the property they can make a counter bid or go higher. You should be able to ask the auctioneer if there is anyone who is interested but has not made a bid.

Having The Correct Finances

There is no way of being 100% sure that the person who has made you the offer is legitimate. If they have made a bid this will work in a similar way to how it would if they made a bid on auction day. The bidder will have to pay a 10% deposit to you immediately and also be able to complete the transaction with 28 days.

If you accept their bid it is important you ask for the deposit for the property straight away. If they delay or say they don’t have it, this should ring alarm bells and you should immediately pull out of the deal.

Accepting a bid before the auction is a risk. On the one hand you are in a good position because you have sold your house and the pressure is off, on the other hand you might be losing out on any bids that might be higher at auction. The fact that somebody has made a bid before the auction is a good indication that your property will be popular and attract bids, so if you are willing to take the risk it might be better to wait for the big day.