When a property is for sale by tender, buyers give confidential written offers to the salesperson by the set deadline.
Understanding the tender process
Offers need to be made in writing on the standard tender document and deposited at the specified location by the deadline. If the property is advertised as ‘for sale by tender (unless sold prior)’, you can make an offer at any time before the tender deadline. The seller can accept an offer at any time and don’t have to wait for the end date.
Once the tender had closed, the seller has up to five working days to decide which offer, if any, they will accept. Although they can negotiate with anyone who made an offer, in most cases a decision is reached on the tender day. If your tender is accepted, you are legally bound by the terms and conditions of the tender document.
Types of offers
A straightforward offer to buy according to the terms set out in the contract.
This is when your offer to buy has conditions attached. For example, it may be conditional on obtaining finance, selling your own property or getting a satisfactory building inspection.
Making an offer
All offers must be made in writing on the standard tender document, which complies with New Zealand Real Estate contract law. You only have one chance to present your best offer to the seller. Unconditional, cash tenders are usually preferred by the seller, but conditional offers may also be made. Your deposit cheque, usually 10% of the purchase price, is usually included with the tender.
If you’re interested in a property, make sure to register your interest formally with the salesperson. That way, if there is any change of circumstance, you’ll be contacted.
Tender documents are different from normal Sale and Purchase Agreements, so Scott recommends you seek legal advice before submitting your tender.
To decide how much to offer, visit Quotable Value, get advice from a registered valuer and ask Scott for information on property sales in the area.
If there are any conditions or variations you want to add into the Tender document, Scott can help with a range of standard clauses to cover common situations. However, you may wish to seek assistance from your solicitor.
Rather than making an offer conditional on finance or selling a home, you might consider organising finance or bridging finance, so you can make your offer unconditional, and therefore more attractive.