What is "Sale by tender"?

Running_Horse

Then "offers above" a low starting point might be the way to go.

Sounds to me more like the agent has an interest in encouraging this particular mode of selling, than in getting the best price for you.

pinkteapot

Are you near a stamp duty threshold?

We're selling at £250k. One of the agents who came round to value said that one of the ways they get more money for people selling at £250k (where buyers won't go higher because of the SD threshold) is that they accept an offer of £250k but have the buyer pay the EA selling fee instead of the seller. In our case, that would have meant the buyer paid the £3k bill instead of us so would have been like getting £253k.

I was slightly dubious as to what HMRC would think of this so didn't pursue it...

marc06

We have been searching for a property to buy in our area and I've seen one agent on the are starting doing this in a few properties. We were interested on a 2 bed house, but this method required the buyer to pay 2% as an introduction fee (essentially state agents fee) as well as introducing conditions like: If your bid gets accepted you can't backtrack without penalties, and you must commit to a 12 month period in which if you want to sell the house you must be using this state agents.
All of this, combined with in my opinion an overvaluation, put me off and we never bid. Checking RightMove this week I've seen the property now being advertised by this agent and two others for £10K less and no mention of tender. So I can only assume that this didn't work despite it being a very interesting property on a nice area in SW London with significant demand.

Kynthia

I've seen a couple of house in my area (outer London borough) being sold this way and failing. I can't understand why they weren't sold the normal way as they weren't particularly unique or highly desirable in any way. However if yours is unique and highly desirable then take a look further at what buyers would have to do to bid and see what other properties they've successfully sold this way.

PasturesNew

RowaN wrote: »

... there are 70+ buyers looking right now for this type of property here (so I'm told).

I bet that's a loose exagerration. "70+ buyers looking right now for this type of property" reads to the seller as "houses exactly like mine". What the EA means is "We have 70+ buyers registered with us that want X bedrooms within a 5 mile radius of ..... with a budget of up to this amount".

Not the same thing at all.

Ivana_Tinkle

IMO trying the get the buyer to pay the agents' fee is a terrible idea. As you point out in the OP, they'll reduce their offer to compensate, so you'll be no better off, but it's actually worse than that. Since they need cash to pay the fee, it needs to come out of their deposit, possibly decreasing the amount they can borrow and so reducing their offer even further.

Or they just won't bother as it's all so much more hassle than buying any other house on the market.

Running_Horse

About the 70+ buyers.

If they had that many wanting to compete for your property they would just make a few phone calls and get their commission without having to do any real marketing.

When we were selling we had endless leaflets from rival agents claiming to have buyers lined up; presumably buyers who cannot use Rightmove and only want to buy through one agent!

Are they lying? Are their lips moving?

Paully232000

Running_Horse wrote: »

About the 70+ buyers.

If they had that many wanting to compete for your property they would just make a few phone calls and get their commission without having to do any real marketing.

When we were selling we had endless leaflets from rival agents claiming to have buyers lined up; presumably buyers who cannot use Rightmove and only want to buy through one agent!

Are they lying? Are their lips moving?

Reminds me when we were selling our house with one agent (Agent A), and one of the bigger EAs phoned me and said something along the lines of we have a couple of people who are looking for a house just like yours, in your street.
Conversation soon ended when I said, oh good tell them to phone Agent A and they can come and view. Never did get any viewings from them I don't think!

sartois

Ivana_Tinkle wrote: »

IMO trying the get the buyer to pay the agents' fee is a terrible idea. As you point out in the OP, they'll reduce their offer to compensate, so you'll be no better off, but it's actually worse than that. Since they need cash to pay the fee, it needs to come out of their deposit, possibly decreasing the amount they can borrow and so reducing their offer even further.

Or they just won't bother as it's all so much more hassle than buying any other house on the market.

This.

There is an EA in London using this method and its a real put off. Seems a bizarre way of doing business compared to the normal method. I'm pretty sure if Ebay started charging the buyer introduction fees then they would quickly go out of business. The problem is that in an area where demand massively outstrips supply as in London, then why wouldn't sellers take advantage? Frustrating though. As a FTB its challenging enough already to raise a deposit as well as all the normal fees and then fork out EA fees on top.

I am going to see 4 properties on Saturday, all have open house days and 2 of them are Sale By Tender. If I like them then my bids will certainly be the 2% below what I would normally offer to compensate, which probably means I won't get them but so be it.

RowaN

OK so its time for an update.

Recap: the agent said S.B.T. was the best thing since sliced bread and will get people bidding above ask, there is massive demand and desirability in my area, my flat is in great condition, buyers are only saying positive things, it is valued/priced correctly, etc etc.

Yet, after 2 open days and many viewings in between, I have only received one bid, today, and that was for £23k below the asking price!!! Something just does not add up here? I'm beginning to agree with those of you above who say that S.B.T. is a massive put-off. Not that I was ever really "pro" S.B.T. to begin with.

I'm going to have a little chat with the EA tomorrow....