When a property is being sold by tender, (prospective) buyers will submit confidential offers (wtitten in sealed envelope) to the agency before a set closing deadline. Buyers (tenderers) details are secret and cannot be shared. At the closing deadline, the branch manager or supervisor will usually present all tenders to the vendor (seller). The listing agent may be present for this, as well as the vendor’s lawyer.
Listing by tender may be useful when:
- the property has some unique value which make it difficult to price on the market
- the vendor doesn’t want to share their price expectations with buyers
- there are privacy concerns for one or both parties.
In general this method give more favor to the vendors than buyers.
Features of the tender process include:
– A property can be sold before the tender date but must be advertised ‘for sale by tender (unless sold prior)’. All marketing material and tender documents must make this clear.
– Tenderers will be asked to fill in a legally binding agreement: ‘The Particulars of Sale of Real Estate by Tender’ which includes the tendered price, deposit amount, settlement dates and any conditions attached to the offer.
– Tenderers provide a deposit which is negotiable and typically 10% of the purchase price. The deposit is returned to the tenderer if their tender is not successful.
Copies of all tendered offers must be kept by you for 12 months (Rule 10.12).
– When the tender offers have been opened the vendor may choose to negotiate further with one or more tenderers or reject all offers.