Buying with Tender
What is a sale of Real Estate by Tender?
Tender is a process of purchasing real estate through confidential submitted written offers and involves marketing a property through intensive advertising and promotion designed to capture the maximum attention of buyers within a set time frame.
Is there a Reserve Price?
There is no reserve price as such but the vendor will have in mind a price which will be established by the closing date of the Tender. Other than the vendor, the real estate salesperson is the only person who may know this price which is generally established by feedback from intending purchasers.
How do we submit our Tender?
Through the salesperson who listed the property or the salesperson who introduced you to the property. They will assist you to fill out the correct Sale and Purchase Agreement Form for Sale by Tender. It is important this is done before the closing date and time of the tender.
Can we make the Tender subject to any conditions of our choosing?
Yes, however the vendor will take into consideration any conditions on any contract and therefore may make it part of the selection process if there are more than one tendered offer. It is more prudent that as many conditions as possible are satisfied before submitting the tender.
Can I buy the property before the closing date of the Tender?
No, unless the following words appear alongside advertising of the Tender closing date and time: "unless sold by private treaty". It is recommended that any pre-tender closing date purchase viability is checked with the Listing Salesperson.
Will I be able to obtain the details of any unsuccessful Tenders?
No the Privacy Act precludes any such information being distributed other than what becomes public knowledge through successful sale of Real Estate.
What is an open or closed Tender?
The new code of Practice for Tenders prepared by the Real Estate Institute of New Zealand stipulated that these terms are no longer valid terms to be used in the sale of real estate by the Tender process.
I want to buy it, but I have a house to sell?
There are three answers:-
- If you are in a sound financial position you may organise a bridging loan.
- Offer a longer settlement date, giving you time to sell and settle your house.
- Make the offer conditional upon the sale of your own home.
What price do I have to pay to buy the property?
This is the price YOU are prepared to pay. Other people will perceive different amounts. Generally, your price will be established by what property has sold for around the area and also the particular features that the home offers you.
What if the house doesn't sell?
If the vendor's price is not reached or if the tender offers contain unsuitable terms then the vendors may seek to negotiate an agreement with any unsuccessful tenderer.
What contract do we sign & what are the standard conditions?
The contract is the standard contract as approved for use by the Members of the Real Estate Institute of New Zealand (Inc) with Particulars of Property as per the property available for sale by Tender and with the following Conditions of Sale:-
- 10% of the purchase price paid at deposit either by cash, bank cheque or personal cheque.
- Settlement date is generally 30-90 days from the signing of the contract as will be stated in the contract on display (Clause - 1.5 Terms).
The contract will be available and on display throughout the advertising period prior to the Tender closing date through the Listing salesperson.