Some buyers have a perception that securing a property prior to auction means they will get it cheaper by eliminating other buyers. Quite often this can be the opposite given the property is fresh to the market and the reaction from buyers looking for that type of home can inflate the initial perceived value.
Options for owners in receipt of early pre-auction offers is to give all buyers expressing interest equal opportunity to purchase their home by bringing their auction forward or calling for offers from all parties expressing interest.
When an owner brings an auction forward it is transparent and you can monitor your competition’s actions and take comfort that you may only pay a minimal amount more than what another buyer is prepared to pay.
Outside of the auction arena there is a risk of paying significantly more than what someone else is prepared to and your purchase price may end up in excess of market value.
Some buyers have also been known to act prematurely and purchase a property pre-auction without completing effective due diligence which can also have some serious and costly long term consequences.
It’s wise to exercise caution when buying prior to auction.