Sale by tender??

Misslight

Hello, we are currently looking for a house and there are an increasing number of properties going on the market as a 'Sale by tender'.

For the vendor, this is perfect for them as they don't have to pay the full whack of estate agents fees. Basically, the vendor pays a nominal fee up front to the estate agent and the agent will pretty much guarantee the sale of the property and at least get them 100% of the guide price. There will be a couple of open days on the property where by the potential buyers will have to place a sealed bid if they want the property. But should the buyer be successful in their bid, they will have to pay the estate agents fees of the vendor!!!

Only specific estate agents are doing it but it happens to be one of the most popular estate agents in the area we are looking in. So not only are we having to pay our own estate agents fees, but we are potentially having to pay the vendors fees, and may I add, at an extortionate rate of 2% or a minimum of £2000 plus VAT. Bearing in mind a typical estate agent fee is 1.25%-1.50% or if it was a dual agency fee then perhaps 1.75%.

The typical price we have been looking at is £275k so the estate agents fees that we would have been faced with is £5500 PLUS VAT!! And this is in addition to the 3% stamp duty that you would have to pay, never mind any additional moving costs that you are paying.

It is an absolute farce and I can't believe that anyone would consider this as an option and I don't believe that it is fair to ask this of the buyer. The budget we are looking at is small, therefore if we had been looking at a bigger purchase price these fees would shoot up!

We certainly don't have the budget for these costs and I know people will turn around and say well don't buy from this agent, but it is narrowing our options of houses in the area as they sell a high volume in the area we are looking at.

I guess by question is, is anyone else coming across this issue and is there anyway to decline to pay the fees? ( I am told its mandatory but I have also read conflicting information.

The point of this post is also to warn people of what they are looking at and the costs involved!

Many thanks
Frustrated buyer

hazyjo

Yep there was a thread on it here recently. I'd noticed quite a few for sale by tender near me.

I suppose time will tell if it works or not. If not, the EA will soon change tack.

Jx

Ether_4

Sale by tender is when the EA changes a small amount to the person selling the house douglas Allen for example charge 150£+ vat.

When you put a bid you place it in a sealed envelope with the status of your mortgage and if you have sold your house ect

The highest bid does not always win but the one that the EA feels has the best prospect of completing. The EA will then advise the seller and they then decide.

You are the selected one you will pay the EA fees around 2 or 3%

bouicca21

EAs in my bit of London are advertising 'sale by tender' and 'sale by informal tender'. In neither case do they state whether this will cost you, the buyer, money. I just avoid them.

Ether_4

They are all the rage with the large companies and I would defo avoid them

Misslight

The adverts usually say that it will cost you as a buyer. An example is it says that it will incur an 'introduction fee' to the estate agent and when you get the bid pack, the t&c's will tell you how much that is. The agent in question is charging 2% of the sale price which is extortionate.