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After an auction- negotiating a conditional offer

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  • After an auction- negotiating a conditional offer

    I'm a noob to the auction process and after a bit of advice. When you go to an auction and no one else bids and your starting bid is the only bid or bids don't meet reserve ,if you are the highest bid do you negotiate with the vendor? The agent said that even though the auction was passed in and we were the highest offer we had to present a clean/unconditional offer to secure the place. They would not accept conditional offers until 2 days after the auction. I felt pressured so we declined and walked away. There weren't other people waiting around after the auction either so not much competition. Great to hear what other experienced investors have done

  • #2
    Agent was a w*nker. As the highest underbidder you can now negotiate with the seller absolutely.
    The agent may have meant that to buy it right now you needed to make your best cash offer and they would try to get seller to lower reserve to that amount. But after that you are first up best dressed.
    I am slightly confused though, as you bid at auction so were unconditionally buying why not just make your best offer post auction?

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    • #3
      The agent must think it's still 2016 where they could afford to be arrogant. Don't feel pressured. He's trying to get the vendor a unconditional sale - well that's what the action was for and it failed. So now is the time for negotiation. A lot of agents are going to go bust this year because they don't actually know how to sell.

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      • #4
        You've bid unconditionally at auction. So you've made the highest offer.

        I'd now be asking the vendor to 'counter sign' i.e. come back and say what they'd take. So you could put the amount you bid in writing, but no higher.

        Don't negotiate against yourself by going upwards, until you've seen what the vendor is prepared to take.
        Squadly dinky do!

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        • #5
          I had bid unconditionally but the reserve hadn't been met. My plan is to have the auction passed in as it didn't hit reserve but as the highest bidder go in and negotiate a conditional sale so I can get a building report done. What the agent is trying to do it seems is not accept the conditional offer but buy time to go into a multi offer so she did not allow me to present a conditional offer right after the passed in auction. I thought it was a bit strange but its my first auction

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          • #6
            I would strongly recommend you get a building report. I was looking at a property last year – ticked all the boxes. I was lucky that I had a mate who was a builder who could checkout the property for me and found a couple of hundred grands worth of structural problems in the foundation and floor. Some other punters went to auction and paid over top dollar - I bet if they knew what I knew they wouldn’t have even shown up.

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            • #7
              Not too strange
              You making a conditional offer post auction is more strange.

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              • #8
                I dont think so Dean. The market brought the vendors the unconditional interest on the day.

                They chose not to accept it.

                Now they must take whatever they can.

                If the OP has become more cautious in the few days after the auction, that's his/her perogative and the vendor should perhaps have taken their lower, but unconditional offer at the time.
                Squadly dinky do!

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                • #9
                  If you're not in love with the property then just wait... any real interest turned up to the auction and with you being the only bid the lack of interest was disclosed.

                  put in a written offer with your conditions UP TO but not over your bid... the reality is, without further interested parties you were the one willing to pay the highest price on auction day. A written offer has to be presented and as davo36 says - get the vendor to counter.

                  the longer this draws out the less likely other buyers will show up... as it is the listing is over 4 wks old unless he auction had a short campaign. The listing is heading to stale territory and the agent will be working to condition the vendor to reassess their expectations as this is the only way the agent will get paid.

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                  • #10
                    Originally posted by Bobsyouruncle View Post
                    Not too strange
                    You making a conditional offer post auction is more strange.
                    Not sure I agree. By putting in at least a Building Inspection and Finance clause there is safety net. Going in unconditionally is always taking a risk, even for an experienced buyer. I HATE auctions!!
                    www.ilender.co.nz
                    Financial Paramedics

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                    • #11
                      I didn't mean the OP was strange. I just meant the agent would think it was weird. You were unconditional 30 seconds ago now it's changed. I also hate auctions and generally avoid them,. Having said that 3 recent deals I bought were all at auctions (where agents told me to turn up).

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                      • #12
                        Originally posted by Bobsyouruncle View Post
                        I didn't mean the OP was strange. I just meant the agent would think it was weird. You were unconditional 30 seconds ago now it's changed. I also hate auctions and generally avoid them,. Having said that 3 recent deals I bought were all at auctions (where agents told me to turn up).
                        I was happy to bid $800k unconditionally but they wanted to push for $900k which I think was the reserve so was happy to negotiate after the auction if I could get it conditional on builders

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                        • #13
                          My immediate reaction is why didn't you get a builder through it pre auction? You're FAR braver than me.....

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                          • #14
                            Originally posted by Bobsyouruncle View Post
                            You were unconditional 30 seconds ago now it's changed.
                            I thought that 30 seconds ago the property was up for auction. Now, it's not.

                            www.3888444.co.nz
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                            • #15
                              Matt the salesperson is legally obliged to present your offer to the vendor if it is in writing. If you ever have a salesperson refuse to do so, quote Rule 10.10 of their Code of Professional Conduct to them.

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