How to Win a Boardroom Auction

You've heard of Auctions, and you've heard of Online Auctions. But have you heard of Boardroom Auctions? Boardroom Auctions are probably the most secretive, illusive and most stressful of all auctions. This article will explain what a Boardroom Auction is, what you need to do, and how to manage this properly, or you may just lost your dream property or end up with bad buyer's remorse.

What are Boardroom Auctions? How are they different from the usual auctions or online auctions? Are there any differences at all? These are the common questions most buyers have in their minds. Stay with us, and we'll guide you through them.

With rising interest rates, buyer interests in the property market have been dampened. But as with any other times, good properties are still available and they tend to sell very fast. Multiple offers for good properties are still common in this cooling market. Real estate sales agents, though, are staying away from auctions in a cooling market, as there is not likely going to be enough interests to create a frenzy at open auctions. Instead, they are marketing properties or advertising the properties as fixed date sales or Expression of Interest (EOI), or fixed priced sale or simply private sale. But that is not all. Sales agents can change the marketing of good properties at any time throughout the sales campaign, depending on demand, and seller's, or to a smaller extent, the buyer's circumstances.

We have received an offer that was deemed acceptable to the vendor.

The above phrase is probably one of the most disheartening phrase any buyers could get from a real estate agent. It means the vendor has received an offer that they think is acceptable. If you are interested in the property, you do not have much time to waste. You need to action quickly, before you lose it. The sales agent is giving you a chance to make an offer, so, grab that chance.

Also note that a sales campaign which was originally a sale by set date or EOI or Fixed priced sale can and almost always evolve into a "Best and Final Offer" situation, or a "sale by negotiation" or a "Boardroom Auction" situation.

What is a Boardroom Auction?

Let's go back to the basics. What is a boardroom auction?

If you had subscribed to our blogs and been following us, you would be familiar with auctions, and how to win auctions. If not, head over to our "Winning Auctions" guide for tips on winning auctions. These auction winning tips are applicable to winning a Boardroom Auction, with some modifications. In a boardroom auction, interested buyers get together at a set place and time, usually at the real estate agent's office's meeting room (thus the name boardroom auction).

How is a Boardroom Auction similar to a regular Auction?

Boardroom Auctions are very similar to the more common auctions. It is conducted by an auctioneer, and interested buyers are invited to participate in the bidding, at a set date, time and location. The rules are similar. Properties bought at the boardroom auction are unconditional. Offers subject to finance, building and pests, etc, will not be accepted. Thus, you need to be very prepared and be up-to-date with your due diligence. If you has not already done your due diligence, you do not usually have much time to do any due diligence, when you sales agent informs you of the auction. A typical person takes about 2 weeks to do a proper due diligence on a property, while buyers are usually notified on boardroom auctions 24 to 72 hours in advance.

As part of our property buying service offerings, our auction bidding service prepares our clients for auctions, and manage the due diligence, helping our clients determine the best price and what the various price points should be. We will also investigate and advice what the other bidders could be offering. Taping into our 20+ years of property investment and buying experience, we will be able to give you a good indication of price points, the good and bad, within 24 hours, giving you confidence to proceed or pull away from the Boardroom auction. We can also represent you, to shield you from the stress and tension from the boardroom auction. Boardroom auctions can be easily 3-5 times more intense than open auctions.

How is a Boardroom Auction different from a regular Auction?

Whilst boardroom auctions are similar to regular auctions, there are significant differences that makes them interesting. The intensity, outcome, duration, etc, varies as a direct result of the number of participants and the decisions each party makes during the boardroom auction.

So, they are similar, but they are different. What are the differences?

1. Boardroom Auctions do not have a scheduled auction date, unlike a typical auction. Boardroom auctions, are triggered when the vendor or sales agent receives an acceptable offer, and they wanted to see who else is interested; or it could be forced upon by Buyers Advocates. As such, there is no way to pre-determine an auction date.

2. Boardroom Auctions have little notice. Because of the unknown auction date, there is very little an interested buyer can do, to foresee when the auction will be held. The real estate agents will usually inform buyers whom they think might be interested, notifying them of the boardroom auction date and time. This notice period can vary from between 24 to 48 or more hours, depending on a few factors.

3. Buyers will definitely miss out if they had not indicated their interests. Hey.. because the agents have to individually inform the buyers, if the agents do not know you are interested, how would they know they have to inform you? This is obvious. Hesitant or unconfident buyers will almost always miss out on good properties they want.

4. There are significantly less bidders and audience during the Boardroom Auction. Due to its impromptu and "invitation-only" process. It is also normal that only serious buyers (plus their families and buyers advocates) are present at the auction.

5. It is usually held in a smaller environment, usually at the real estate agencies' boardroom. Thus the name "Boardroom Auction". Or indoors, at the site of the property.

6. Rules of the auction may differ between auctions, or between agencies, but they will all be disclosed at the start of the auction.

What could happen during the Boardroom Auction?

Boardroom auctions can end with different outcomes, depending a number of factors:

1. How many participants there are.

2. How prepared the participants are.

3. The intentions of the participants.

More often than not, boardroom auctions will almost always end with a winner. Remember, the trigger is usually when the vendor receives an offer which they think is acceptable, and other buyers are then invited to the auction. So, someone in the boardroom already has submitted a good-enough offer in the vendor's eyes. The property will sell at the auction. So, if you are invited to the boardroom auction and your offer is not the one that triggered the auction, you know you have a strong competitor. And it is someone else in the boardroom with an acceptable offer. If you are not well prepared, be prepared to say goodbye to your dream property.

Always attend the boardroom auction, if you triggered the auction. It means your offer is acceptable. It may be very stressful due to the impromptu nature and you are probably unprepared. You have to be there, to have a chance to buy it. The real estate agent may inform you that there are other bidders. It is usual that some buyers might get cold feet, and chose not to attend. Auction situations are very stressful and anxiety causing, to those unfamiliar with them. More so, when all bidders are gather within arm's length in a small, enclosed room. While it is designed to be transparent, many buyers are intimidated by this transparency, the close proximity of other competitors and the boardroom environment that it is held in.

How do you win a Boardroom Auction?

The secret to winning a Boardroom auction is similar to how you can win an auction... Preparation is the key. For auction preparation tips, head over to our "Auction Winning Tips" articles, where we will teach you how you can win ANY auctions without overpaying.

However, the MOST critical step to winning happens PRIOR to the auction. This is one critical step you must do, in order to participate in the Boardroom Auction.

You need to let the agent know you are interested in the property as soon as you know you are interested.

This lets a good agent know they have to inform you, if and when a decision is made to conduct a Boardroom Auction, or any other forms of auction or changes in buying processes.

Why are Boardroom Auctions Scary and Intimidating?

Too often, we see buyers being scared of boardroom auctions and will try to avoid them at all costs. There are many reasons why they see boardroom auctions as scary. The usual reasons could be

• Finances are not yet ready. Because in a usual set date sale campaign, they would have the opportunity to submit their offer "subject to finance".

• Assumes that the final price will go way beyond their limit.

• Unsure of what a boardroom auction is.

• Paddle-phobia. Auction Phobia. Yes, this is real. Some buyers have a phobia of bidding at auctions. And this is normal.

• Being skeptical about the agent’s intention with the boardroom auction.

• Doubt that it is actually going to happen (assuming it’s an agent bluff).

• Fear of bidding in an enclosed room where opponents are up close and intimidating.

• Unable to make it to the boardroom auction at short notice.

• Insufficient time to complete the full due diligence at short notice.

• The buyer might actually be more interested in another property.

We have had spectacular successes representing clients during boardroom auctions or any other forms of auctions. Our buyers advocates are often the triggers of boardroom auctions, as we prefer the transparency. It is a swift outcome for the real estate agent as well, thus it is a win-win for all.

Where to get help with Boardroom Auctions?

Practice. Practice. Practice. Practice and attend as many boardroom auctions as possible. Or our buyers advocates can help with bidding on your behalf.

Our convenient one-stop property buying service manages the entire purchase strategy for our property buying clients. We search, scrutinise properties and attend auctions, including boardroom auctions, negotiate at private sales, for our clients, often with successful results. Our strategies have saved our clients up to $500,000 in one instance. Here is our story.

While we cannot guarantee that you will definitely win the auction at a discount, we can guarantee that you will:

• Know what to expect at the auction

• Know what the property is worth

• Know what others could be offering for the property

• Know what you should offer for it

• Know when to walk away

• Be in good hands at the auction

• Be represented at the auction

Get in touch if you need more information on our property purchase plans.

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