Hedging Your Bets When You Face an Auction

89A The Avenue, Spotswood
Photo: Greg Hocking

Recently I had an exciting adventure with a delightful couple who were determined to secure their dream home in Melbourne’s inner west.

Their criteria was very specific, their budget was sensible and their approach was grounded. Everything about this assignment was a buyer agent’s perfect challenge.

I only encountered one issue. The property that caught their attention (and captured their hearts) was an auction property.

The Auction Property

Auctions always pose a risk – the risk of losing to someone else after investing due diligence costs and emotional energy.

Given my buyers’ tight criteria, the vendor’s reasonable expectations and the keen level of interest in the property, I tried to buy it prior to auction.

“Auctions always pose a risk – the risk of losing to someone else after investing due diligence costs and emotional energy.”

However, the agents gave mixed messages. One believed the vendors were enthusiastic about my offer, while the other wanted to run the property through to auction because she felt she had good interest.

The listing agent won the toss and the property remained on schedule for a Saturday 26th auction. We knew this lovely 4 bedroom townhouse, which was located on Bradley Street in Newport, could sell within our $700,000 budget, but competition could also easily cloud our optimism.

Our Strategy

As always in situations like this, I tracked the campaign carefully and stayed in touch with the agents all the way through to Thursday 24th.

At the same time, I stayed in touch with other local agents in an effort to identify other potential options in the event we were unsuccessful.

To my dismay, the property continued to attract buyers, and a buyer’s advocate booked a building inspection on the property for Friday 25th.  

At this point I knew I had strong competition. So on Thursday 24th, when I received a phone call from an opposition agent, it yielded good news.

The Other Property

A very similar 4 bedroom townhouse in Spotswood had come on the market. I managed to get through (and get my clients through) within hours.

The asking price was $695,000, so it was certainly appealing. After a quick conversation and a historical sales analysis, we made the snap decision to drop the auction property and go for the alternative property.

The modern kitchen at the Spotswood property.
Photo: Greg Hocking

“We made the snap decision to drop the auction property and go for the alternative property.”

I was able to swap the building inspection from one property to the other within this small timeframe.

Following a bill of good health from the builder, we had contracts signed at 9.30pm that night on our verbally negotiated price of $690,000. A sold sticker was on the board in the morning.

The Final Result

My professional couple had secured a stunning townhouse featuring modern comforts, a beautifully appointed kitchen and bathroom, and a fabulously well-lit living area with a courtyard outlook… everything a busy professional couple could enjoy now and into the future.

The courtyard visible from the living area.
Photo: Greg Hocking

The interesting angle to this story was to take place the next day at 11:00am.

Under tough competition, the other property scooted past our budget and sold for $742,500, leaving our competing buyer’s agent the under bidder.

Had we not pounced on our purchase, he may well have competed with us for the one we secured. Timing, careful judgement and swift decision-making can make the difference between a hit and a miss!

For more information about Spotswood, read our suburb profile here.

Points of Interest in Spotswood, Postcode 3015

Spotswood Primary School
Duchess of Spotswood
The Spotswood Hotel
Hobsons Bay City Council