Making a Tender on a House – Putting in Your TenderLast blog post we talked about just what a tender is.This post is all about putting in a tender. Next post we give you an insight to after the tender.
Thinking of Making a Tender on a House?If you are interested in making a tender on a property, request a copy of the tender documents from the real estate agent. The tender documents can include any or all of:
- A partially filled in sale and purchase agreement
- A copy of the certificate of title
- Terms and conditions of sale by tender
- Instructions to use when filling out the tender
- Any other documents relevant to the property
Ready to Put in a Tender?If you have done all your checks, your happy, and you have decided you are going ahead with the tender, read all the tender documents carefully, and fill them in.
The sale and purchase agreement will need to be completed including adding your details, the purchase price, the deposit amount, the settlement date and any conditions. There may also be other documents to sign i.e. acknowledgement that the sale is by tender.
Get in Touch with Your Bank or Mortgage BrokerThis is also a good time to run the details of the property you are interested in past your bank or mortgage broker. There may be some issues with the property that could affect the amount a bank is prepared to lend i.e. its condition, title type, location etc.
This can be quickly checked. It is always good to have some mortgage advice at this point and a good mortgage broker, or personal banker can help – take advantage of free advice from a mortgage broker!
Conditions in Your TenderDeciding on conditions to have in your tender can be difficult. A condition free tender (a cash tender) is always going to be more attractive then a conditional tender if the money is approximately the same.
A tender process often gives you time to work through all your potential conditions prior to the tender date i.e. you can get a building inspection, valuation, LIM, and confirm you finance etc, but whether or not you choose to do this is up to you. Propertytoolbox has a few thoughts on the subject of conditional vs cash offers here.
Help with Your Tender From Your Property LawyerIt is very important to get your property lawyer or conveyancer to look over the tender documents. In most cases, the vendor will have added conditions and deleted standard clauses in the sale and purchase agreement.
Your property lawyer can tell you the implications of these changes, change the wording of the tender conditions if necessary, add any of your own conditions and check the title.
Done all Your Checks? Time to Submit Your TenderAfter all these checks have been done, and you are happy to proceed, the tender can be submitted (usually to the real estate agents’ offices), with a cheque for the deposit, before the tender closes. You will get a receipt to confirm that your tender documents & deposit were submitted.
Working Out Your Chances of Winning the TenderWith a tender situation you may be the only tender, or one of many. You may be able to gauge this by asking the real estate agents office how many copies of the tender documents were sent out, or you can ask the agent – neither is a reliable method.
The reality of a tender is that unless you have reliable information to the contrary, you have to assume you are in a competitive bidding situation and have to put in your best offer.
Houses Sold Prior to TenderBe aware of the fine print as some houses are advertised for sale by tender (unless sold prior), which means the vendor is open to offers before the tender date. In this situation, you can choose to approach the vendor early or wait to the tender date.
Registering your interest in the property with the agent ensures that if an offer is being submitted prior to the tender date, you get a chance to put an offer in also.Next Post – Part 3 – Making a Tender on a House – After the Tender Has Been Made |
The Propertytoolbox Home Buyers GuideThe Propertytoolbox house buying guide has lots more helpful stuff for all you house hunters – head there now!