Can I Sell a Property Before Auction Day?

Once a property has been listed for sale in an auction, it is possible that you might receive pre-auction offers. Unlike in many sales processes, this is permitted and allowable. In fact, as your auctioneer representing your interests, we are obliged to present you with the offer and allow you to decide how you would like to proceed. But should you sell a property before auction day?

The right decision will depend on several factors, not least an assessment of the interest in the property and how likely the auctioneer thinks you are to receive a higher offer or competitive bids above your reserve price on the day.

Let’s look at how pre-auction offers work, tips to ensure you make informed decisions, and what happens if you decide to go with an offer and remove your property from auction.

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Any legitimate pre-auction offer should be made to the auctioneer rather than directly to you. This is an important point because, as property auction specialists, we follow a series of controls to verify the authenticity of registered bidders and will apply the same process to any pre-auction bidder.

It is unwise to consider an offer that is made directly to you – especially if this arrives in the form of a letter posted through the letterbox since these are commonly scams.

Another possibility is that by taking a property off the market, you are exposed to the risk that the seller does not follow through, will waste a considerable amount of time, or does not have the funds in place to complete the transaction as quickly as would have been possible at auction.

Many auction property sellers are keen to finalise the sale as quickly as they can, with auctions often facilitating a final transfer of funds within as little as a month. Therefore, we would never recommend removing a property from sale on the premise of a forthcoming ‘guaranteed’ price.

Any pre-auction buyer should be prepared to exchange contracts within 24 hours, indicating that they have a serious intent to buy, with financing readily available, rather than attempting to take the property off the market.

Related article: How long does it take to sell a property at auction?

What Happens if I Accept an Offer on My Property Before Auction Day?

Fast completion should be a core objective, ensuring you don’t accept an offer that turns out to be false or find yourself in a position with a stalling buyer who will then attempt to reduce their offer.

If you receive an offer that you and your auctioneer are happy with and that presents a good financial outcome, you can decide to go ahead. The sale will follow the same terms and conditions as agreed with the auctioneer, providing assurance of professional processing and checks before the legal paperwork is completed.

The standard timeframe is for contracts to be exchanged is within 24 hours, although this may sometimes be extended depending on the nature of the transaction and your wishes.

Rejected offers will not make an impact on your auction listing. You may, however, wish to use the offered price to reassess your reserve and guide prices.

Is it a Good Idea to Accept a Pre-Auction Offer on My Property?

We advise each seller on a case-by-case basis. In some circumstances, a verified and attractive pre-auction offer could be a great resolution. In others, it is the opposite and may be accompanied by a recommendation to turn the prospective buyer down for one of numerous reasons.

Clive Emson will evaluate any pre-auction offer made before making recommendations, such as:

• Confirming the buyer is a genuine bidder with cash funds available and has been verified through the bidder registration process.
• Analysing the views against the property listing, response to marketing and number of legal packs downloaded to determine whether there is a good likelihood the property will invite competitive bidding at auction – resulting in a higher final sale price.
• Looking at the number of potential buyers who have attended or registered to attend in-person viewings and the number of newly registered bidders who have submitted their details to participate in the scheduled auction.
• Discussing your objectives and response to help you make confident decisions about the right way forward.

If a property has been newly listed, it may simply be too early to make an assessment. In this case, we may suggest waiting for a certain period to see how quickly interest accumulates rather than accepting an offer that may turn out to be less than favourable.

When Should I Accept a Pre-Auction Offer?

Generally speaking, offers made before an auction are of a lower value than those achieved on the day. Auction bidding often becomes competitive, and a pre-auction buyer will usually be trying to secure the property for a lower amount than they would expect to pay at auction.

The speed and certainty of an auction mean that the time saved by accepting an early offer would be minimal, and it would be better to wait for the auction to achieve the highest possible price.

However, there may be some scenarios where you, as the seller, are keen to accept the offer or where this appears to be in your interests. We would always advise you to discuss the situation with the auctioneer and gain insights from their experience before moving forward.

Receiving an Offer Before Auction Day From a Preferred Buyer

Preferred buyers may be friends or family, associates or members of the community whom you would like to sell your property to in preference of an unknown party. It is fairly common to hear from sellers who are conscious that a neighbour has expressed an interest in the property but has not made any steps to progress this.

Selling at auction means that if a preferred buyer is committed to the purchase, they have a finite date by which to register as an auction bidder or submit an offer to the auctioneer.

Exchanging contracts on a good offer before auction day means the property is withdrawn from the auction, although the deadline in place means there is no risk that the transaction will drag on or that the property will remain unsold if the preferred buyer does not come forward.

Accepting a Pre-Auction Offer for Speed

Property auctions are completed very quickly – within 20 days in most cases. However, if you need to sell your property as quickly as possible, and a difference of a few days or a week would be a decision-making factor, you might accept an offer regardless of whether you could achieve a higher price at auction.

Although the sale price made for a direct sale transaction is almost always beneath that made during an open auction, this could be a compromise you wish to make.

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