The downside of making a pre-auction offer...

Yes there are some negatives to showing your cards early in a negotiation that you need to consider. Firstly you will be breaking the golden rule of being the first to name a price and secondly you run the risk of your pre-auction offer (if rejected as they often are) becoming the benchmark of the vendors expectations e.g. "the reserve".

Whilst I do often negotiate the purchase of a property prior to auction, I do it with considerable experience and technique. Buying prior to auction day is one of the easiest ways to pay more than you have to for a property so you’d better be thinking three steps ahead, have a game plan and stick to it.

If you want to make sure that you’re consulted if another party makes a pre-auction offer then I recommend that you let the selling agent know to contact you as you’d be prepared to make an offer if the vendor is considering selling prior to auction day. Avoid discussing price with them unless you’re sure that another party has made a pre-auction offer and focus on getting ready for the auction instead. When I buy at auction I always stick to my guns, never bid against myself and, more often than not, I buy below fair market value.

For more auction tips take a look at my book "The Insider's Guide to Saving Thousands at Auction".

Related blogs: Key Auction Tips series:

• Part 1 - Understanding the auction process
• Part 2 - Organise Your Finances and Research the Market
• Part 3 - The Psychology of Auctions
• Part 4 - Selling Agents' Tricks of the Trade
• Part 5 - How to Prepare Your Auction Strategy

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