Tender is one of the less common methods of buying residential property, but every now and then it's the chosen sale method of the seller. To help you navigate what tender means and how to purchase property by tender, we've put together the following question and answer list.
Q. What is a Real Estate Tender?
A. Tender is a form of marketing and selling a property through intensive advertising media designed to capture the maximum attention of buyers within a set time frame. The process is a means of purchasing/selling Real Estate through public negotiations to determine the true market value of the property at that time.
Q. How should I approach the Tender Process?
A. The Tender contract, which is your offer, is fi lled in and then deposited at our branch offi ce and held secure until closing time. The Tender documents are different from normal Sale and Purchase Agreements and you may wish to seek legal advice before submitting your tender contract.
Q. Can I submit a Tender if I have to arrange finance?
A. Obviously, an unconditional, cash Tender would be more attractive to the vendor and you can organise finance prior to submitting your offer. However, do not hesitate to submit your Tender, even if conditional.
Q. Can I submit a Tender if I have a house to sell?
A. Yes. There are three options - (1) You may make a Tender, conditional on the sale of your property (2) If you are in a sound financial position you may want to arrange a bridging loan to cover any delay in settling the property (3) You may offer on an unconditional basis but with a longer settlement date, giving you time to sell and settle your own property.
Q. How do I decide how much to pay?
A. Naturally the more attractive the offer the more likely the chance of having your Tender accepted. Although vendors reserve the right to negotiate with the highest, or any, Tenderer in most cases a decision is reached on the Tender day. However the vendor can have up to five working days from the closing of the tender to make a decision. For this reason, your submitted Tender should be your best offer. A combination of your own instincts, market awareness and guidance from your sales consultant will give you a good indication of price. Obviously, the price you tender is in direct proportion to your desire to own the property.
Q. Can I buy before the Tender day?
A. No. Any tender received will only be considered at the close of the tender at the date and time stipulated on the tender documentation.
Q. What contract do we sign and what are the standard conditions?
A. The contract is the standard Tender contract approved by the Law society of New Zealand and the New Zealand Real Estate Institute. This is available from the sales consultant. You should have read and understood the Tender documents. If you need to insert any conditions or vary the settlement date, do so. To ensure the correct wording seek assistance from your solicitor or your sales consultant. If your tender is accepted you are legally bound by the terms and conditions of the Tender contract.
Your Harcourts Sales Consultant is specially trained to assist you if you have any questions or if you require further information about Tenders. Feel free to contact them, or the office for more information.