How quickly can we secure a property?

We get this question often. In competitive climates, pre-auction offers occur a lot more frequently. This can create a lot of stress for buyers who suddenly become aware of an urgent time pressure. So how quickly can we pivot, and how fast can a property be purchased…. with all of the due diligence completed?

Auction campaigns usually run over the course of four weeks. Occasionally this period is a week shorter, or longer. However, auction campaigns can be brought to a head very quickly when an acceptable pre-auction offer is received. Agents aren’t always supportive of a pre-auction offer, particularly if a vendor has expressed a desire to sell on auction day, but a strong offer or a change of circumstance can change plans.

Typically, agents like to use the entirety of an auction campaign to market the property effectively and to meet as many potential buyers as possible. They also invest the campaign time to meet prospective vendors and to showcase their auction skills. However, agents will recommend a pre-auction sale if any of the following apply.

• One obvious buyer is apparent, and no others are on the horizon
• The vendor has purchased and needs an imminent sale and settlement
• The vendor has a change of circumstances and needs their property to be sold earlier than auction day. A common example could be a new auction listing that has caught the vendor’s eye as a potential next home
• The agent is aware of another competing listing about to hit the market
• A buyer has made a knock-out offer that is well above the vendor’s (and agent’s) price expectations
• The property could present uncomfortable challenges on auction day, (ie. difficult neighbours, objecting family members, etc)

When an acceptable pre-auction offer is received, agents will usually sms or place calls to other ‘interested parties’. These people are those who expressed they had interest to the agent at the door (or over the phone following their inspection). It also includes those who have requested a contract of sale. Agents send a message out via their CRM and we are all familiar with those texts.

So, what do you do if you have 24 hours to make a purchase decision? And how much should you be prepared to pay? How do you know if there is anything wrong with the property?

This time-pressure and intensity can be highly stressful, and many buyers opt out because it’s all too hard.

We can do it though. As soon as we have received that call, we pivot quickly, place a high-priority on the assignment, and we work to our checklists.

The first step is a thorough inspection. Agents will almost always facilitate inspections when such a deadline looms. I assess and appraise the property once I have physically inspected. My analysis also takes into account the neighbouring properties, the street and the amenities. Floor plan, orientation, condition, era and improvements are all considered, and the comparable sales analysis enables me to circle a tight price-band that I believe the appraised value sits within. Rigorous conversation with the agent paints a picture of the level of competition I’ll likely face too.

Provided there are no red flags at the property inspection, the next step involves checking the title and encumbrances. We arrange a contract review with a legal professional and we contrast the title plan in the contract with our recorded observations at the site, the online planning systems, satellite imagery and our council planning department checks. We are looking for potential issues such as built-over easements, illegal structures and non-permitted works.

We also check for parking permits in higher density areas, we interview Owners Corporation Managers, we read through Owners Corporation minutes and we arrange independent rental appraisals for investor clients.

We negotiate terms and contract changes with the agents following our legal reviews and we confirm deposit payment details.

Once our appraising and due diligence is finalised, we arrange a building and pest inspection. This can sometimes be one of the heftiest challenges because 24 hours could seem insufficient for most buyers to arrange an inspection and report. We are fortunate to have three obliging and supportive building inspectors who can help us with short notice.

Boardroom auctions and late night negotiations are familiar territory for us.

While a quick pivot like the above could seem almost impossible for some buyers, we encounter this regularly. Instead of fearing this scenario, buyers who can prepare sufficiently will find that these types of battles are often advantageous. Bidding via zoom, bidding in an agency boardroom on a weeknight and negotiating blindly are all uncomfortable for many buyers… but not for us.