A Buyers Guide to Tenders
Q WHAT IS A TENDER? A Tenders are exclusive listings with a ‘no price’ marketing strategy and a short intensive marketing program usually 3 to 4 weeks prior to a tender closing date. Because there is no fixed price to influence a buyer’s perceived value of the property, the property sells at the market value. In the current market where “Multiple Offer Situations” are common, the tender process, which is a “No Price” marketing strategy designed to attract multiple interest, is not a lot different than a property being marketed without a price by “Offers” or “By Negotiation”. The main difference is that there will be a date when the tender closes and you need to have your offer submitted. Q CAN I MAKE A CONDITIONAL OFFER? A In most cases offers are considered prior to the tender date, and unlike auctions, conditional offers will be considered. However you are in a stronger negotiating position if you have had your finance pre-approved, and have done as much homework as possible prior to submitting your offer in order to have it as free of conditions as possible. Q ARE TENDER DOCUMENTS ALWAYS USED? A Some vendors use tender documents, whilst others prefer the standard 7th edition Sales and Purchase agreement which is devised by the NZ Real Estate Institute of NZ and the Auckland Law Society. It is recommended that if tender documents are being used, you have your solicitor peruse them for you. Q HOW DO I KNOW WHAT TO BID A The agent should provide you with a list of comparable properties around the area and their sell prices to help you understand market values. However, it is important to remember that no two houses are the same and many have a feature that makes the property more valuable to one particular buyer e.g. the outlook, privacy, bedroom configuration. Q CAN I MAKE AN OFFER BEFORE THE TENDER CLOSING DATE? A In most cases an offer can be made prior to the closing date. It is usually stipulated in the advertising if no prior offers will be accepted. If an offer is made prior to the tender date, all buyers who have registered their interest are notified immediately so they may have an opportunity to also present an offer – in this situation they will need to make their ‘best offer’. The offers are all presented together to the vendor who then may accept one outright, choose one they wish to negotiation with, or send them all back to the respective purchasers and asked them to resubmit them. The vendor WILL NOT COUNTER OFFER because he will then undermine the whole purpose of marketing with a price.
