The tender works in a similar way to the auction system, except there is no public auction day. Instead, tenders or offers close at a specific time on a specific date.
Tender presents another opportunity for sellers to create a competitive situation without stating a listed price. They set the terms, conditions and the deadline, and prospective buyers have only one opportunity to put forward their most competitive offer.
Like auction, tender increases the number of enquiries, inspections and opportunities to obtain the very best price for the property. Also, the seller doesn't necessarily have to accept the highest price. They can choose to negotiate with any of the tenderers to achieve a satisfactory conclusion.
The tender process
When sellers offer their property for sale by tender, everyone with an interest to purchase must put in their offer on a normal Sale and Purchase Agreement/Contract or a specially prepared tender document.
These offers are sealed in an envelope and deposited in a tender box, by a predetermined date and time.
All tenders are held by the consultant or someone appointed by the seller until the close-off date. They are then opened together, allowing the seller to choose the most favourable offer. A time frame is often given for those offers to be considered.
Benefits to the seller
If the property is not sold by the tender date, it will be exposed on the open market as an exclusive listing.