What is a Real Estate Tender?
Tender is a method of selling a property by requesting that all interested buyers submit a private and confidential offer within a set timeline, usually 4-5 weeks. For a property being marketed by tender there is no advertised price to guide potential buyers, encouraging buyers to put their best offer forward up front.
When Rural and Lifestyle Sales market a property in this way they provide an information pack to interested buyers that will include an Information Memorandum (a detailed document about the property), Tender Documents, Certificate of Title and may include a copy of Resource Consents and/or a LIM report. If you have any concerns prior to the close of tender, it is recommended you consult your legal advisor before making an offer.
All offers need to be made using the tender documents in the information pack.
Tender documents are then deposited at a designated site and will be kept secure in a locked box until the deadline.
All tenders are opened with the vendor and/or their representative(s) present, as well as the salesperson, after the deadline expires.
The offers are then reviewed and the vendor selects an offer that meets their expectations.
Even though you might have made the best offer, the vendor may still wish to negotiate on aspects of the tender – this is acceptable and part of the process. If a tender is accepted, then the agreement is binding under the legal terms and conditions of the agreement.
Ideally you want your tender to be the best offer for the seller to consider. It is therefore helpful for your offer to be an unconditional offer, but conditional offers also can be made. It is best though to discuss conditions with the salesperson before submitting the tender and to see what might be able to be managed before the deadline.
Other steps that assist in making a tender include obtaining a registered valuation, not only securing suitable finance but help guide you in where to price your offer. There is a cost to gaining a valuation that will be at your expense regardless of the outcome of the tender.
Prior to submitting your tender
- Ensure that you have read and understood the Tender Documents thoroughly.
- Sit down with your legal representative and advisors to discuss.
- Clearly add any conditions that you may require.
Withdrawing a Tender
Most tenders have a period during which your offer cannot be withdrawn. This is usually 5-10 working days from the tender closing. It is therefore important to ensure that you are serious and sure about your offer and that you have put your best foot forward – there may not be a chance to negotiate.