What does sale by tender mean?
Asked on Jul 2 2011,
General in Gillingham |
Sale by Tender is like a silent auction. A property is marketed for sale with or without a guide price and there is a deadline for all offers. Anyone interested puts in their offer and the vendor is presented with these offers, which are private, to be considered on the day.
Answered on Jul 12 2011,
Whilst I agree with the sealed bid answer posted a couple of years ago a word of warning does need to go out to purchasers. Sale by Tender to a purchaser means that you will have to pay a fee of around 2-2.5% + VAT of the purchase price to the Vendors Estate Agents as an "Introduction Fee". It appears to me that this is just a way of imposing a non negotiable sales fee on the purchaser rather than the seller paying the estates agents fee which can be negotiated. From my recent experience with several estate agents if I was to sell my house by Tender I as the seller would on have to pay my estate agents £180 including VAT. The rest of their fee is paid for by whoever purchases the property and at a much higher rate than if the seller was charged as normal.
If I sell my house as a normal sale and my offer is £100,000. I would normally pay the estate agents a fee of around 1.5% +VAT or £1500 + VAT (£1800).
If I sell my house by Tender I pay the estate agents £180. They then charge a minimum of 2% of the offer price to the purchaser £2000+VAT (£2400). The agent has just made £2580 instead of £1800. Seller saves around £1350. But the purchase has an additional bill of £2400.
However your purchaser may have not sold their house by tender therefore leaving them with a bad taste in their mouth as they are stung for 2 lots of estate agents fees. On their sale and purchase.
As a purchaser you have no way of negotiating the Sale by Tender fee. Where as you have that power as a Vendor. PLEASE BE AWARE. Sale by Tender only really benefits 1 person. The Estate Agents. If you Sell and Buy by tender your are paying the higher fee (As you would normally be buying a larger more expensive property than you are selling).
Answered on Apr 23 2014,
So glad someone else is struggling to see the positives from a buyers POV regarding sales by tender. We are looking at property around the £200,000 mark meaning we will have a £4,000+ bill if we go into a tender. (Most agents in our area charge 2% to buyers on a tender). It's really stressful and frustrating. They call it an introduction fee but I found the property online and called them about it - they didn't contact me about the property!
Answered on Apr 28 2014,
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