Sale By Formal Tender

NiggyG

1) Does anyone have any tips on purchases by this method?

I understand that 'formal' bids mean that once they are accepted they are effectively a binding contract - good protection from gazumping.

2) The property would need some renovations to a collapsed extension. If I submit a written bid am I able to stipulate 'get-outs' such as stating that my bid is subject to a a survey confirming that the existing damage to the extension has not caused structural damage to the main building?

3) Also with regards to having the money in place, I don't have the mortgage ready to go but with about ~50 deposit and requiring less than 3x my wage I amuse I could just put this in the written bid and that shouldn't be a problem?

agrinnall

You'll probably get some advice on here from other people (not me as I don't know anything about this scenario) but wouldn't it make sense to engage a solicitor now and seek their advice? The consequences of getting it wrong sound expensive to me.

Alchemilla

My understanding is that if you wish to have a survey then you will need to do it prior to bidding.

Have you been given the legal pack?

eddddy

If it's a formal tender, it's like bidding at an auction. Your bid should be unconditional and binding, and you cannot later withdraw. (You might even have to include a bankers draft for the deposit with your offer.)

If you need a mortgage (or finance) you should have a firm mortgage offer, plus any surveys and searches, before you bid.

Having said this, you can propose any terms you like in your bid. e.g. your bid is subject to survey, searches, legal checks, mortgage etc. But if they have chosen to go to formal tender, I suspect they would not accept a bid on that basis.


As a final comment, if the property is mortgageable, I'm almost certain they wouldn't be selling it by formal tender.

stator

Also check what fees there are. Often they try to transfer the agents fees to the buyer. If this is the case make your offer conditional on the seller paying his agents fees, not you.

NiggyG

It is defiantly by formal tender. I have't been given a legal pack yet, we don't look around it until 11th April.

Bids are to be in by the 17th April - so there isn't a lot of time to organise anything.

We bought our first house in '09. If I remember correctly the seller provided basic surveys. Have things changed?

I guess I'll get onto the bank asap to see if we can have an 'agreement in-principle' before the 17th.

DTDfanBoy

stator wrote: »

Also check what fees there are. Often they try to transfer the agents fees to the buyer. If this is the case make your offer conditional on the seller paying his agents fees, not you.

If it's a formal tender conditional offers will generally not be accepted, it's much easier to simply adjust your offer

eddddy

NiggyG wrote: »

I guess I'll get onto the bank asap to see if we can have an 'agreement in-principle' before the 17th.

If you're making an unconditional offer, an agreement in principle isn't sufficient (In fact, in this case, where you are buying a property with structural problems, an agreement in principle is meaningless.)

You need to make a full application, pay the application fee, have it valued, and have a firm mortgage offer - before you make your offer.

NiggyG wrote: »

We bought our first house in '09. If I remember correctly the seller provided basic surveys. Have things changed?

Are you in England? That's not how things usually work. (Could be different in Scotland.)

TrickyDicky101

eddddy wrote: »

As a final comment, if the property is mortgageable, I'm almost certain they wouldn't be selling it by formal tender.

^ this.

Also, since you need a mortgage you need to get the lender's agreement to advance a mortgage on this property before you bid on it, otherwise you may find yourself in a position of being obliged to buy without the means to do so.

Obtaining a mortgage on the property is unlikely to be straightforward - otherwise it probably wouldn't be being sold by formal tender.

NiggyG

eddddy wrote: »

If you're making an unconditional offer, an agreement in principle isn't sufficient (In fact, in this case, where you are buying a property with structural problems, an agreement in principle is meaningless.)

You need to make a full application, pay the application fee, have it valued, and have a firm mortgage offer - before you make your offer.

Are you in England? That's not how things usually work. (Could be different in Scotland.)

Yeah - in England - my mind obviously playing tricks with me


It doesn't sound like I have the time required to do things before the 17th...

DTDfanBoy

NiggyG wrote: »

It doesn't sound like I have the time required to do things before the 17th...

Most probably not

It's pretty much the same as buying a property at auction, the major difference being that you only get to place one bid.