A tender is a form of selling property through advertising media designed to capture the maximum attention of customers within a set time frame.
This property sales process is a private and confidential means of buying/selling real estate to determine the true market value of the property at that time.
What are the benefits?
- As opposed to an auction, you are advantaged by having the option of dealing with conditional buyers as well as unconditional buyers.
- A tender promotion creates a finite time frame for interested buyers, causing them to act with more urgency.
- Home owners are not put under unnecessary pressure.
- The property gains prominence through high profile marketing over a set period of time.
- The vendor, as the seller, has a five-day irrevocable period in which to decide which offer to accept. Offers cannot be withdrawn while they are utilising this time.
- A tender allows you, the seller, to be more flexible with your terms and conditions of sale. For example, you choose the possession date.
- A tender creates potential for a premium price through buyer competition.
- No price marketing means you are never limited by setting an asking price that is too high or too low.
- As there is no listed selling price, this means that buyers cannot compare your home to others on the market.
- If there is more than one buyer, selling by 'tender' can cause bidders to bid higher than they usually would.
- Extensive use of open homes during a planned timetable allows easy access for buyers.
- A tender can be negotiated after it closes, giving the vendor the opportunity to work through any issues and terms they deem unsuitable.
- You only need one buyer to drive up the price, unlike an auction which requires two buyers to bid against each other.
- Buyers also feel less pressure than in an auction situation as they don't feel like they need to respond immediately.
However, there are also disadvantages
- Because buyers don't know the price, it could also backfire and lead to them bidding well under market value, as they are unaware of their competitors offers.
- This process can often be shorter than the usual sale campaign, which means that there may not be as much exposure for the property, and therefore not as much interest.
It's best to weigh up these advantages and disadvantages and consider whether this is the right method for you to sell your own home.