How to Submit a Winning Tender Offer
Buying a property by tender can be a competitive and sometimes daunting process. Unlike auctions, where bids are made publicly, tenders involve confidential written offers submitted by a specified deadline. To increase your chances of success, it’s essential to understand the tender process and prepare a compelling offer. Here’s a comprehensive guide on how to submit a winning tender offer.
1. Understand the Tender Process
When a property is listed for sale by tender, interested buyers submit confidential written offers to the real estate agent by a set deadline. The seller then reviews all offers and can choose to accept, reject, or negotiate further with one or more buyers.
Key Points:
- Confidential Offers: All offers are confidential and not disclosed to other buyers.
- Deadline: Offers must be submitted before the specified deadline.
- Conditions: Offers can include conditions, such as finance approval or building inspections.
- Deposit: A deposit is usually required with the tender offer, typically 10% of the purchase price.
For a detailed overview of the tender process, visit Settled.govt.nz.
2. Register Your Interest
Registering your interest with the real estate agent is crucial. This ensures you are informed of any changes to the tender process, such as changes to the deadline or if the property is sold prior to the deadline.
Tips:
- Stay Updated: Ask the agent to notify you if someone else makes an offer before the deadline.
- Clarify Terms: Confirm whether the tender is a closed tender (no early offers considered) or if the seller reserves the right to accept offers before the deadline.
3. Conduct Thorough Due Diligence
Before submitting your offer, it’s essential to conduct thorough due diligence to ensure you are making an informed decision.
Steps:
- Property Valuation: Check the property’s value using online tools like homes.co.nz or Trade Me Property Insights.
- Building Inspection: Arrange for a professional building inspection to identify any potential issues.
- LIM Report: Have your lawyer review the Land Information Memorandum (LIM) report for any legal or planning issues.
- Neighbourhood Research: Visit the property at different times of the day and explore the neighbourhood and local amenities.
4. Prepare a Strong Offer
Your offer should be competitive and well-prepared to stand out among other tenders. Consider both the price and the terms of your offer.
Tips:
- Competitive Price: Base your offer on comparable sales and market conditions. While price is crucial, it’s not the only factor sellers consider.
- Unconditional Offers: If possible, make your offer unconditional. Sellers often favour unconditional offers as they provide certainty and a quicker settlement.
- Minimise Conditions: If you need to include conditions, keep them to a minimum and set short timeframes for satisfying them. For example, limit the number of days for finance approval or building inspections.
5. Include a Personal Touch
Adding a personal touch to your offer can make it more appealing to the seller. Consider writing a letter to the seller explaining why you love the property and how you envision living there.
Tips:
- Be Genuine: Share your story and why the property is perfect for you and your family.
- Highlight Flexibility: Mention any flexibility you have with settlement dates or other terms that might be important to the seller.
6. Work with a Professional
Engaging a lawyer or conveyancer is essential when preparing a tender offer. They can help you understand the tender document, review the terms, and ensure your offer is legally sound.
Tips:
- Legal Review: Have your lawyer review the tender document and any conditions you plan to include.
- Advice: Seek advice on how to make your offer as attractive as possible while protecting your interests.
7. Submit Your Offer Correctly
Ensure that your tender offer is submitted correctly and on time. Follow the instructions provided by the real estate agent and double-check all details before submission.
Steps:
- Complete the Tender Document: Fill out the tender document accurately, including your offer price and any conditions.
- Include the Deposit: Attach the required deposit, typically 10% of the purchase price, with your offer.
- Submit on Time: Ensure your offer is submitted before the tender deadline. Late submissions are usually not considered.
8. Be Prepared for the Outcome
After submitting your offer, the seller will review all tenders and make a decision. Be prepared for any outcome, whether your offer is accepted, rejected, or if the seller wants to negotiate further.
Tips:
- Stay Available: Be reachable in case the seller wants to negotiate or requires additional information.
- Plan for Next Steps: If your offer is accepted, be ready to proceed with the settlement process. If not, review the feedback and prepare for future opportunities.
Submitting a winning tender offer requires careful preparation, thorough due diligence, and a strategic approach. By understanding the tender process, conducting comprehensive research, and working with professionals, you can increase your chances of success. Remember, a well-prepared and competitive offer, combined with a personal touch, can make all the difference in securing your dream property. For more detailed guidance on buying by tender, visit REA.govt.nz and Settled.govt.nz.