Tender
What is a real estate tender?
The process is a private and confidential means of purchasing/selling real estate to determine the true market value of the property at that time. The property is put up for sale with an advertised date and time for all offers from purchasers to be presented.
Tender Documentation:
Tender documentation is available to all interested purchasers. This usually consists of either a specific Tender contract, or the standard Sale & Purchase contract attached to specific terms of sale for the tender. Two copies of the forms are required. Purchasers complete the forms, stating the amount that they are offering, settlement date and any
conditions of their purchase, if any.
A deposit by way of bank cheque or electronic funds transfer in favour of the agents trust account is attached to the contract and both copies are put into an envelope and delivered to the location of Tender Box. This is often the office of the Real Estate company offering the property for sale, but it can also be at the office of the vendor’s solicitor or another appropriate location. All offers remain in the tender box until after the time of closing of the tender.
The tender documents are different from a normal Sale and Purchase Agreement and you may wish to seek legal advice before submitting your tender.
Conditional Offers:
Your offer may be conditional; however an unconditional cash tender will be more attractive to the vendor.
After closure of the tender:
After the tenders close the vendor will open and view all offers presented. They then may choose to accept any or none of the tenders, or negotiate with the highest or any tender. The more attractive the offer the more likely the chance of having your tender accepted.
In most cases a decision is reached on the tender day. For this reason, your submitted tender should be your best offer. Don’t rely on the opportunity to negotiate with the vendor after the closure of tenders as you may not get the opportunity. The tender offer must state the purchase price as an exact dollars amount
Can I buy before the tender day?
The property should not be able to be purchased prior to the closing of tenders. However in recent years it is commonly seen that tenders are offered for sale with the words “if not sold prior” which indicates that the vendor would consider an offer prior to the closure of the tender. A Tender is not allowed to be opened before the closing time & date.
Acceptance of a tender:
If the vendor chooses to accept an offer they will then sign the contract submitted by the purchaser. A copy will be given to both purchasers and the originals sent to the parties’ solicitor. The deposit cheque will be banked. The total deposit is usually 10% of the purchase price.
Confidentiality:
All Tenders including the identity of the Tenderers will be kept confidential.
Legal Advice:
Before signing any agreements, both the buyer and vendor should seek legal advice.