What is a real estate Public Tender?
A Real Estate Tender is a method of buying and selling real estate. It is an intense and accelerated real estate marketing process that involves the public sale of property through competitive bidding. The tender procedure is simple. It is just like normal offers but the difference is that all the written offers (or bids) are sealed in envelopes and place in a tender box ( “A silent auction” ). This tender box is locked and only the tender director has the key. On tender date this box is opened at the date and time as specified in the advertising. The only people present is the tender director and the owners. The owners may decide to accept one of the offers, renegotiate on any of the offers (they don’t have to accept the highest offer) or they could say they are not going to accept any offer at all if the reserve price is not met. All this is in private.
The greatest benefit of the tender process for you is total privacy. All the bids or offers are in writing. No buyer is “starting low” as at auctions because with a tender they have only one chance to secure the property and most importantly, it protects the integrity of your property in the marketplace.
A Public Tender eliminates totally unrealistic Purchasers who attend Public Auctions, and waste everybodyís time and syndications that donít bid in order to keep the price down. Public Tender forces serious Buyers to put their best foot forward, thus achieving a higher price.
Most Important Points To Consider
In some cases the Seller does not pay commission or transfer fees.
Sellers don’t have to wait for buyers but will have buyers waiting for their properties.
They can name the day and hour at which they wish to sell and get it sold at the highest possible price.
Sellers have all potential buyers assembled at one time, each competing against on another.
The Seller has the assurance that if the reserve price is not reached, he can withdraw the property.
The very fact of placing a property on tender means that the buyer has to make an immediate decision.
All Buyers view the property at the same time, in order to create a “hive of activity”
This allows the home to find its own price in a free market.
Buyers in the market place respond with a written offer.
All efforts are made and to date +- 80% of these properties have been featured in editorial.
We achieve the highest price in the shortest amount of time, with the least amount of hassle.
Keep up with the trends
About 80 percent of the homes in Australia are sold by auction, with similarly high figures in parts of the USA. Any negative stigmas attached to these practices are gone with a Public Tender and more and more South African sellers who utilise the skills of a qualified professional are seeing the benefits of these alternative marketing methods by going the Public Tender route.
The inconvenience of show houses, coupled with the ongoing invasion of their privacy while their homes are on the market week after week, month after month, and even year after year, has seen the popularity of selling by Public Tender escalate to the point where it’s quite usual to have 100 or more visitors at a preview. Of these, around 80 percent are willing and able buyers.
Why choose a public tender?
Better Than Auctions
With Public Tender you have all the buyers in competition although the prospective buyers are not together in one room on one date. So you have the benefit that they don’t know what the other tenders are. You donít have an under bidder setting the market value. Nothing stops buyers from making high offers because they know that there will be competition especially in a good market. Buyers have no indication of the value of the other offers and they cannot trim their offers to be more in line with the other offers. Should you decide not to sell because the reserve price was not met there is no “pass in figure” as with auctions.
Ride The Hype
Selling by Public Tender creates a hype in the market, where the buyers wait for the preview. With show houses, you have to wait for the buyers to come. The agents involved, of which are there at least two, are fully focused on the Public Tender in order to expedite a speedy, successful and hassle-free sale at the highest possible price. The tender can call for unconditional offers, which means buyers would need to check quality and value of the property before the tender date. This would mean a clean sale. With a clean sale you know there is finality in the acceptance of the tender.
You Are In Control
It is always your choice to sell or not. You can also decide if you want your agent to renegotiate with one or more of the buyers. You don't have to accept any offer unless you advertise as such or the reseve price has been achieved. Remember that one buyer can submit more than one tender with different conditions and or purchase prices on each.
Sellers who would prefer to limit the amount of public viewings of their property would do well to consider marketing their homes by Public Tender. Instead of the inevitable run of Sunday show houses and midweek viewings until the property is sold, the seller chooses a specific date and time for all prospective buyers to view the property at once.