Anyone Sold/Bought by Tender?

H0601

Hello Everyone

I am a first time buyer and have found a house that I absolutely love. It needs a lot of TLC but I am more than happy to renovate it over time. The only problem is..... it is being sold by Tender.

I've now done quite a lot of research on sale by tender and i'm aware that i will have to pay a 'finders' fee to the estate agent however, what I'm really wondering is whether the guide price that is put on houses being sold this way is is an accurate reflection of its value or whether it is simply a ploy to attract the most interest.

To give you a bit of context, the house I would like has a guide price of £150,000. A house a few doors down which was originally built the same but has had a lot of extension work sold in 2011 for £250,000 so that is a big different in price (largely due to the extension I'm sure but nether the less, still a large jump)

I would really love to buy this house and the guide price is at my ideal budget. I could also stretch to a bit more but as a first time buyer I do not want to pay more than I need to.

This leaves me feeling stuck between rock and a hard place, not knowing whether to bid modestly and potentially lose out or bid more and potentially over pay. I really hate this sale by tender malarky whatever happened to the old fashioned negotiation.

Has anyone else bought/sold in this way that can offer any advise as to guide prices and the outcomes? Did bids go way over the guide price? Any tips to 'winning' sale by tender?

Any help would be much appreciated
Thank you

vansboy

Tender bids are awkward, as you simply have no way of knowing what someone else would value the place at. Sometimes you can buy, for much LESS than the guide price, as well as much more, of course.

There was a Phil and Kirsty episode, iirc, where it did achieve a 'bargain' price, but a long time back.

What you need to establish is if it is to be sold to highest offer, or if there will still be a reserve (as in an auction).

If it is highest offer buys it, think of your best price, but not at level money, ie £150k, make it an odd amount like £150328.

This has worked many times in sealed bid situations, when I've bought other things.

And of course, you will have to have all your finaces in place, with surveys done, ready to proceed, with little opportunity to change your mind.

VB

stator

Is it sale by Formal or Informal tender?

H0601

It is being sold by informal tender - bids in envelopes, all opened on the same day, no obligation to seller or buyer at that stage as I understand it.

stator

It'll be a gamble then. Just make what you think is a fair offer and if you lose out keep on looking, something else will come up
Don't be pressured into offering more than you want to.

If may be that the only other people making offers are property developers, who tend to offer low on a lot of properties. If you're the only person making an offer for occupation you might be the highest.

anselld

Sale by tender puts some people off so perhaps it gives you a better chance.
Just make sure you subtract the fee from the amount you would normally be willing to offer for a similar property elsewhere.

H0601

Thank you for all of your replies. It is definitely something that I am going to have to have a good think about.

Has anyone else sold/bought in this way? What were your experiences?

AMILLIONDOLLARS

I would adjust your offer to reflect a deduction of the finders fee( +VAT), which is the Vendors way of getting you to pay their Estate Agents Costs, a lot of Estates agents expect this. There is also a wording that you can use to state that your maximum bid is £xxx, but you will not be paying the fee. My daughter did this on her bid.

A lot of people automatically assume that you have to pay this fee, but there are ways around it using the above methods.

AMD

eddddy

AMILLIONDOLLARS wrote: »

... There is also a wording that you can use to state that your maximum bid is £xxx, but you will not be paying the fee. My daughter did this on her bid.

A lot of people automatically assume that you have to pay this fee, but there are ways around it using the above methods.

AMD

Yes you can do that.

But the seller's contract says that the seller must then pay the fee. So the net result to the seller and the EA is exactly the same.

So if the OP offered £101k - refusing to pay the fee.
And somebody else offered £100k - agreeing to pay the fee.

... the seller would accept the £100k offer (assuming a 2% fee)


But if your mortgage is going to be close to its LTV limit, it's safer to refuse to pay the fee.

AdrianC

Doesn't really matter whether the guide price is appropriate or just a come-on. What do you think it's actually WORTH?

AMILLIONDOLLARS

eddddy wrote: »

Yes you can do that.

But the seller's contract says that the seller must then pay the fee. So the net result to the seller and the EA is exactly the same.

So if the OP offered £101k - refusing to pay the fee.
And somebody else offered £100k - agreeing to pay the fee.

... the seller would accept the £100k offer (assuming a 2% fee)


But if your mortgage is going to be close to its LTV limit, it's safer to refuse to pay the fee.

You'll find that the way the Tender Document is worded, it overrides the Seller's Contract, that why they tell you to read the Legal Pack carefully!

AMD