You may have noticed properties for sale by informal tender, but what does informal tender actually mean and how does the process differ to a standard transaction?
What is informal tender?
A ‘guide price’ is set and the property is widely advertised for a period of a few weeks, with a final date for offers to be submitted specified from the outset.
Any offer must be given in writing and placed within a sealed envelope clearly marked with the property address as reference. Your agent should supply a form to complete which identifies any required information to strengthen a bid.
This could include whether your offer is dependent upon the sale of an existing property and, if so, whether that is on the market or already sold subject to contract. How you intend to fund the purchase, by mortgage or cash for example, would also be included here.
On the closing date, the seller will be invited to open all the ‘sealed bids’.
When is informal tender used?
This method of marketing is generally used for probate sales or the sale of vacant properties, often those with potential to improve, and benefits the seller by ensuring that the best possible price is achieved.
How does informal tender work for buyers?
If you’re a buyer, informal tender or sealed bids may feel a little like a ‘blind auction’ but ensuring that your bid is the maximum that you are able and prepared to pay will give you the best possible chance of securing the property.
Some buyers may enclose a personal letter with their bid with a little more background on their position. If there’s little between two offers this could just make the difference between your offer being the one that’s accepted.
What offer should I accept?
It is important to remember that the purchasing position of the buyer can have as much importance as the offer itself. If you do need to sell a home in order to buy, it’s vital to get your property on the market as soon as possible, and ideally to have a buyer in place yourself before the tender closes.
If you have a property to sell or you’re interested in a property that we’re marketing by informal tender and want more advice on placing your bid, get in touch today.
