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selling house by tender, but received no bids
Comments
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I'm buying a sale by tender house. I reckon I was the only one to make an offer and got a bargain as offered quite low.
After my offer was accepted I went to the EA to pay £60 fee and once we exchange I will pay the EA 1.25% of the offer.
I researched the value of the house and then deducted 1.5% and that was my offer.0 -
The only one to lose out here is the buyer as they need to find more money now if considering anything for sale by tender.
That assumes that the house will sell at the same price regardless of the method and that the buyer will just swallow the additional fees.
Another way of looking at it is the buyer only has a finite amount of money and they can either pay it to the seller or to the EA.
For me the seller is as likely to lose. If I'm a buyer and I have 250k to spend then I can either pay 250k for the house or pay 245k and give 5k to the EA. As a seller it should be obvious which is preferable.0 -
TheCyclingProgrammer wrote: »Its essentially a way for sellers to get the buyer to pay their fees but in such a way that there is no transfer of economic value because the debt was never the sellers in the first place (and therefore not adding to the sale price of the house as far as stamp duty is concerned). Potentially a clever stamp duty dodge. I wouldn't be surprised if some EAs sell it as such for properties around stamp duty thresholds.
We sold our house for £250k (SD threshold) - tried to get more but couldn't jump over the hurdle.
One EA who valued and quoted mentioned that one thing they could do to get us more money was to accept an offer of £250k but get the buyer to pay our EA selling fee instead of us. The way it worked is that they'd cancel our contract and draw up a new one with the buyer. Anyone can pay an EA to sell any house - it doesn't have to be the house owner that signs the contract. Buyer signs a fresh contract with the EA to say "please sell X house". Buyer's then liable for the fee.
So, this wasn't a sale by tender house. Normal house, but the EA said that they'd try and negotiate more for us by getting the buyer to pay instead of us.
Didn't use that EA. They said HMRC are happy with it. I wasn't convinced.0 -
Reducing your offer to cover the fees is all well and good as long as you actually have the cash to cover the fees on top of your stamp duty, legal fees and other costs. I imagine a lot of people won't. If you pay more for the property you can cover this with an increased mortgage but you can't do this for the fees.
You also have to consider that the whole sale by tender process is designed to increase competition and inflate bids, often above asking/guide price. Reducing your offer to compensate for the fees reduces your chances if winning.0 -
TheCyclingProgrammer wrote: »Reducing your offer to cover the fees is all well and good as long as you actually have the cash to cover the fees on top of your stamp duty, legal fees and other costs. I imagine a lot of people won't. If you pay more for the property you can cover this with an increased mortgage but you can't do this for the fees.
Buying a property usually takes a few months, your salary within those months will cover most of the EA fee. Stamp duty, legal fees and other costs are fixed at the point of trying to get the mortgage.TheCyclingProgrammer wrote: »You also have to consider that the whole sale by tender process is designed to increase competition and inflate bids, often above asking/guide price. Reducing your offer to compensate for the fees reduces your chances if winning.
Unless you are the only bidder...0 -
TheCyclingProgrammer wrote: »Reducing your offer to cover the fees is all well and good as long as you actually have the cash to cover the fees on top of your stamp duty, legal fees and other costs. I imagine a lot of people won't. If you pay more for the property you can cover this with an increased mortgage but you can't do this for the fees.
You also have to consider that the whole sale by tender process is designed to increase competition and inflate bids, often above asking/guide price. Reducing your offer to compensate for the fees reduces your chances if winning.
Come on you can't have it both ways! If not having enough cash to cover the fees takes out a tranche of potential buyers then that has to result in less competition than if they were all bidding doesn't it?
Basically it's a rubbish system and the only nailed on winners are the EA.0 -
I almost wonder if this is a viewing I didn't go to because of the fact it was sale by tender. I originally was intending to go forward, and then as others have mentioned realised that I would have to pay an EA fee.
Now having examined the sale by tender process I will not be looking at any properties that are using it.0 -
ladyabouttown wrote: »Buying a property usually takes a few months, your salary within those months will cover most of the EA fee. Stamp duty, legal fees and other costs are fixed at the point of trying to get the mortgage.
Most people budget for the expected costs of stamp duty and legal fees. We have a budget of £6k on top of our deposit set aside. But for arguments sake, a 2% fee on a £250k house is £5k. You really think most people can save up £5k in a few months? More to the point, why should they have to?
If you're the only bidder, then you might get lucky, but the whole point of Sale By Tender is its supposed to increase the number of viewings and potential bids. If it wasn't an effective method of selling, I'm not sure estate agents would bother.0 -
Jitterbug123 wrote: »I almost wonder if this is a viewing I didn't go to because of the fact it was sale by tender. I originally was intending to go forward, and then as others have mentioned realised that I would have to pay an EA fee.
Now having examined the sale by tender process I will not be looking at any properties that are using it.
I almost didn't go as didn't understand what it meant, but after researching it and with no other properties to view at the weekend I thought I might as well go have a look.
Liked it, was told about the fees, so took that off what I valued it at and my offer was accepted.0 -
Ah see, I had other properties to view.0
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