Pre-Auction Offers and Competing with a Friend on the Same Melbourne Property: What to Do

Making a pre-auction offer in Melbourne while a friend is also interested in the same property is legally and ethically straightforward — both parties are entitled to pursue the same home independently. The practical challenges are relational, not legal. The most effective approach is to have a brief, honest conversation with your friend before either of you acts, agree that the process is impersonal, and then each pursue the property on your own terms. If a pre-auction offer is the right strategy for your position, structuring it correctly — and quickly — matters far more than the discomfort of the situation.

How Pre-Auction Offers Work in Victoria

In Victoria, a vendor is under no obligation to accept or even respond to a pre-auction offer. Agents are generally expected to present all written offers to the vendor, consistent with professional conduct obligations outlined by Consumer Affairs Victoria. However, the vendor retains full discretion.

A pre-auction offer only succeeds if the vendor decides that the certainty of a known price outweighs the potential upside of an auction — typically when the market feels uncertain, the property has been sitting, or the vendor has a pressing settlement timeline.

For a pre-auction offer to be taken seriously in Melbourne’s inner suburbs — Carlton North, Fitzroy, Northcote, Brunswick — it generally needs to be unconditional (or close to it), include a flexible settlement, and be priced high enough to eliminate auction risk. Offering at the top of the advertised range rarely achieves this, as most agents and vendors expect buyers to anchor there.

Melbourne Underquoting and What “How Much Over” Actually Means

Victoria’s underquoting laws, governed under the Estate Agents Act 1980 (Vic) and enforced by Consumer Affairs Victoria, require agents to advertise a price that is reasonable and based on evidence such as comparable sales.

While there is no fixed “10% rule” in legislation, price guides must reflect a realistic estimated selling price. In practice, competitive markets — particularly in inner Melbourne — often see results exceed quoted ranges due to demand and auction dynamics.

For a pre-auction offer to have genuine stopping power, buyers typically need to align with the vendor’s likely reserve (based on comparable sales), not the lower end of the advertised range. A practical strategy is to:

• Analyse recent comparable sales (not listings)
• Add a premium for certainty (avoiding auction risk)
• Submit a clean, time-bound offer (e.g. 24–48 hours)

Competing with a Friend: Ethics, Strategy, and the Conversation Worth Having

There is no legal obligation to step aside for a friend. Property decisions involve significant financial and personal considerations that generally outweigh informal social expectations.

The most effective approach is transparency before action. A simple conversation — “I’m seriously considering making an offer on this property, just wanted to let you know” — removes surprise and allows both parties to proceed clearly.

If the relationship is particularly close and the stakes are high, it may be worth discussing relative needs (e.g. first home vs investment). But this is a personal decision, not something governed by agents or legal frameworks.

When a Buyer’s Advocate Removes the Personal Dimension

One underappreciated advantage of using a buyer’s advocate is that it removes personal tension from the process. The advocate acts independently, handling negotiations and bidding without emotional overlay.

This can be especially helpful when multiple known parties — including friends — are competing for the same property. The interaction becomes professional rather than personal.

For buyers navigating complex situations like this, working with professionals can also help structure stronger offers and reduce negotiation mistakes. For example, guidance similar to this pre-auction strategy breakdown can help clarify when to act early versus going to auction.

Practical Summary: Auction vs Pre-Auction in Victoria

A pre-auction offer makes the most sense when:

• Your budget is below likely auction competition levels
• The property has lingered on the market
• The vendor values certainty over competition

Going to auction may be better when:

• Strong competition is expected
• Comparable sales suggest a higher reserve
• The vendor is clearly motivated by competitive bidding

If accessibility or long-term suitability is part of your decision (e.g. planning for mobility needs), it’s also worth factoring in potential modification costs early. Providers like Mobility Access Modifications can help assess what changes may be required post-purchase, which can influence your true budget ceiling.

Ultimately, there is no universally “correct” path. The key is to make a deliberate decision based on market evidence, communicate clearly with anyone personally affected, and structure your offer in a way that aligns with how Melbourne’s property market actually behaves.

Forge Real Estate Melbourne can help you blueprint your future by finding the perfect blue-chip property where your lifestyle needs and investment goals converge.

📞 Phone: (03) 91003633

✉️ Email: info@forgeproperty.com.au

🌐 Website: www.forgerealestate.com.au

We offer specialized consultation and can assist in both Mandarin and Cantonese.