Buying property through TENDER process

Greetings all,

Have a question and would like to see if anyone can shed some information and experience re: tender process.

I'm looking at purchasing a property in Canberra which is currently on the market, unfortunately the property is going for sale via Tender process. I feel that it isn't the most transparent method of selling the property - on the other hand perhaps it's the best option for the vendors (agents advice).

My question is, what are the issues or things that I need to be concerned about (one obviously not paying too much for the property :).

I underatand that all tenders need to be received by blah blah blah however I feel that the agent can have a field day with this process. Obviously this process encourageg to get people to "put their best foot forward".

Furthermore, I also feel that I need to be strategic when sumitting offers to the agent.

Anyway, if anyone can shed some light on this topic I would love to hear your thoughts.

Cheers

LK
 
Gday LK,
The first question that needs to be asked is if the property is going to be a ppor or an IP. The answer to this question would determine the answer or ideas provided.

PPOR - you may well be prepared to pay a little over the odds if this property ticks all of your boxes in regards to what you are looking for in a home. You should still be prepared by doing your research in finding comparative sales in the area, to avoid paying WAY too much, but generally, if you will be staying there for a while, it isn't going to matter too much.

IP - Offer what your DD indicated that it is worth, not a cent more. If you miss out, then the other person has probably overpaid. Move on to the next property. There will always be another.

Boods
 
its a bit like a silent auction , i don't like this at all and one always keeps wondering if its all smoke screens and lie's
getting feed back like , another party has offered more, etc, etc, when there might not be another party???

try and think like this, you have seen whats around, and know what your buying, pretend , that your the only one and ask what you think a fair price for the home is, and make the offer , if you miss out you will know next time , but i am sure there will be a second chance at it as the agent will tell you that its been beaten , and then you might have to offer more, good luck from another Canberren, :D
 
a tender is fairer than a silent auction...

all submitted tenders are placed generally in sealed envelopes until the tender closes and then opened by the vendor in the presence of the agent and sometimes the solicitor depending on the state.

An agent generally will not know what the offers are so cannot play the games of another party's offer is more etc.

it does make it more difficult for the purchaser in that there is no price point indication and you have to be sure of your research. But from a sellers perspective it is the only way to get a proper indication of what the market thinks it is worth - i.e. no auction pressure to force price up, no agents talking things up and no price indicated for buyers to argue is too high etc.
 
it does make it more difficult for the purchaser in that there is no price point indication and you have to be sure of your research.

That's why most Buyers don't like this method of sale.

The onus is upon the Buyer to do the work......and generally speaking they are lazy and like to be led by the nose. Ozzies like getting the asking price and simply knocking 5-6% off....then call it good research.

Most prime property assets are sold this way, so if you want to play with the big boys, you better get comfortable with this method.

Seller has 100% power in this negotiation. Buyer has 0%.

As always, comes down to the quality of the asset. I've also found that quality assets do not come up every day.
 
The only time we tendered was with a house we really loved. We thought it was worth around $520K. Agent told us the figure would have a "5" in front of it.

We put our contract in at $490K hoping that we might be the only tenderer, in which case we could proceed to negotiate, and get an idea of the price the vendor wanted.

Two other contracts went in. Found out later one was $520K and the other $550K. Vendor apparently wanted a "6" in front of it :eek:.

Anyway, it didn't sell for maybe a year later and I think it sold for about $620K (cannot remember exactly). I don't think it was worth $620K at the time, and it obviously wasn't worth that much. Time did its magic and the vendor got what she wanted, but only when the market moved up enough to support her price.

I really hate tenders :D.
 
Most prime property assets are sold this way, so if you want to play with the big boys, you better get comfortable with this method.

....and a lot of corporate business is done this way. We have have just put in responses to 3 different RFT's to drum up some new biz.

Cheers,

The Y-man
 
Most prime property assets are sold this way, so if you want to play with the big boys, you better get comfortable with this method.

Seller has 100% power in this negotiation. Buyer has 0%.

As always, comes down to the quality of the asset. I've also found that quality assets do not come up every day.


absolutely agree - the other trap for young players looking at putting a tender in is to remember it isn't ALL about the price - conditions can play a big part in the process.

also remember you often don't get the chance to negotiate - it is first in best dressed best offer...(again, not always best price!)
 
it isn't ALL about the price - conditions can play a big part in the process.

Exactly right. This is the territory where a clean unconditional cash contract trumps almost all comers....especially when dealing with a risk adverse Vendor who really really needs the CASH NOW.

I've missed out on crackingly good assets due to not being able to rip the finance clause off....and conversely under-bid competitors by the use of clean contracts to secure life changing assets.

I love this method of sale.
 
Neighbours over-the-back sold about 2 years ago by tender.

Likely purchaser discussed pricing with the agent who said if they went above xxx they stood a good chance. They did, the agent rang the owners as it was above their expectations and the deal was settled that evening.

This was about 10 days before the tenders were alleged to be closing.

Another sales ploy.
Marg
 
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