Understanding Property Tenders in Real Estate: A Comprehensive Guide
A tender is a distinct method of selling property that involves a formal, private, and confidential process where potential buyers submit written offers by a specified deadline. Unlike auctions or traditional negotiations, tenders allow buyers to present their best offer without knowing what others are bidding, similar to a “silent auction.”What Is a Property Tender?
A property tender is a structured sales method where:- Buyers submit confidential written offers by a specific deadline
- All offers remain sealed until the tender closing date
- Offers are opened simultaneously, usually in the presence of a real estate manager
- Sellers have a set period (typically five working days) to review and decide
- The entire process maintains privacy and confidentiality for all parties
For Sellers: Why Choose and How to Manage a Tender
Advantages of Selling by Tender
- Creates urgency: The finite timeframe encourages serious buyers to act
- Fosters competition: Buyers present their best offer without knowing competitors’ bids
- Maintains confidentiality: Results and individual offer details remain private
- Provides flexibility: Sellers can specify terms and conditions that suit their needs
- Removes price limitations: Marketing without a fixed price attracts a wider range of potential buyers
- Allows decision time: The irrevocable period after tenders are opened gives sellers time to carefully consider all offers
When Is a Tender Most Suitable?
While any property can be sold by tender, this method is particularly effective for:- Properties where multiple parties must be consulted in the decision-making process (family trusts or deceased estates)
- Properties requiring significant buyer due diligence before submitting an offer (those with development potential)
- Unique properties where market value is difficult to determine
- High-end properties where privacy is valued by all parties
- Properties where sellers want to create a sense of urgency among potential buyers
Managing the Tender Process as a Seller
- Starting the process: Sign a written authority for sale by tender with your real estate agent
- Marketing your property: Ensure advertising clearly states “for sale by tender” with the closing date and time
- Pre-tender offers: Decide whether to allow offers before the tender closing date (typically indicated with “unless sold prior”)
- Receiving offers: All tenders should be securely held until the closing date and time
- Opening tenders: Be present or have a representative when offers are opened
- Decision period: Take up to five working days to review offers and decide which, if any, to accept
- Acceptance or continuation: Sign the sale and purchase agreement to accept an offer, or move to negotiation or alternative sales methods if no suitable offers are received
Legal and Professional Considerations
- Obtain legal advice before proceeding, especially for properties in trusts or deceased estates
- Ensure your real estate agent complies with relevant legislation and professional conduct rules
- Be aware of disclosure obligations, particularly for unit title properties
- Understand tax implications, including potential bright-line test applications
The Buyer’s Journey
- Register your interest: Formally notify the salesperson of your interest to ensure you’re informed of any changes
- Research thoroughly: Understand the property’s value through market data, title searches, council information, and inspection reports
- Secure your finances: Arrange for the required deposit (typically 10%) and ensure your financing is in order
- Prepare your offer: Complete the standard tender document, inserting any conditions or variations you require
- Decide on offer type: Choose between unconditional (generally more attractive to sellers) or conditional offers
- Seek legal review: Have a lawyer review the tender document before signing
- Submit your offer: Deliver your completed tender document by the specified deadline
- Wait for a decision: The seller has up to five working days to decide, during which your offer is irrevocable
- Negotiate if necessary: Be prepared for potential negotiations on price or conditions
- Complete the process: If accepted, satisfy any conditions by the agreed date and prepare for settlement
Types of Offers in a Tender
Unconditional Offers
An unconditional offer has no conditions attached and represents a commitment to purchase the property as specified in the tender document. These offers are generally preferred by sellers, especially when multiple offers are being considered.Conditional Offers
A conditional offer includes conditions that must be satisfied before the sale becomes binding, such as:- Obtaining satisfactory building and pest inspections
- Securing financing approval
- Selling an existing property
- Obtaining valuation
- Reviewing title and LIM reports
Pre-Tender Offers
If you’re interested in making an offer before the tender closing date (when permitted), you must:- Submit an unconditional offer on a standard Sale and Purchase agreement (not the tender document)
- Include a clause stating the offer remains open until a specific time (typically the third working day after receipt)
- Provide a 10% deposit with your offer
- Sign the ‘Buying before the Tender date’ form
Frequently Asked Questions
- What is a real estate tender?
- A real estate tender is a method of selling a property where potential buyers submit private and confidential written offers by a specific deadline. These offers are typically held unopened until the deadline has passed, at which point they are presented to the seller for consideration.
- How does the tender process work?
- Buyers interested in submitting a tender must use the standard tender document provided by the real estate agency. The completed offer, along with a deposit (usually 10% of the proposed purchase price), must be submitted to the specified location by the deadline. The offers are held securely and opened simultaneously after the deadline, usually in the presence of a real estate manager or auctioneer. The seller has an irrevocable period, often five working days, to review the offers and decide whether to accept one, reject all, or potentially negotiate with a tenderer.
- Can a property be sold before the tender deadline?
- Yes, a property listed for sale by tender can be sold before the official deadline. If a seller receives an offer prior to the deadline that they wish to accept, they can do so, and the tender process will conclude early for other interested parties. This is often indicated in the marketing materials with phrases like “unless sold prior.” Registering your interest with the agent is important to be notified of any changes or early offers.
- What types of offers can be made in a tender?
- Buyers can make either unconditional or conditional offers. An unconditional offer is a straightforward agreement to buy according to the terms of the contract. A conditional offer includes specific conditions that must be met for the agreement to become binding, such as obtaining finance or a satisfactory building report. While conditional offers are accepted, unconditional cash offers are generally considered more attractive by sellers.
- How do I determine my offer price and terms?
- Deciding on your offer price involves a combination of market awareness and personal instinct. Your salesperson can provide information on recent property sales in the area, and you can also consult sources like Quotable Value or a registered valuer for additional data. When preparing your tender document, carefully insert any conditions or variations to the settlement date you require. Standard clauses for common situations are available, but seeking legal advice is recommended to ensure the document fully reflects your intentions.
- Do I need legal advice before submitting a tender?
- It is highly recommended to seek legal advice before submitting a tender offer. Tender documents differ from standard Sale and Purchase Agreements, and a lawyer can help you understand the specific terms and conditions of the tender document and ensure it is tailored to your needs.
- What happens if my tender is accepted?
- If your tender is accepted by the seller, you are legally bound by the terms and conditions outlined in the tender document. You will need to be prepared to pay the deposit, typically 10% of the purchase price, immediately upon acceptance. If your offer includes conditions, you must satisfy these conditions by the agreed date specified in the sale and purchase agreement. Once all conditions are met, the sale becomes unconditional, and the remaining purchase price is paid on the settlement date.
- What happens if I want to buy a property with an existing tenant?
- If you are buying a property that is currently tenanted, the agreement for sale and purchase should clearly state this. The settlement date and possession date may differ. If you require vacant possession, it is the seller’s responsibility to give the tenant the necessary notice to vacate according to legal requirements. Seeking legal advice is recommended when purchasing a tenanted property.
- FAQs: Understanding the Tender Process in NZ Real Estate
- These questions and answers provide a deeper dive into the specifics of the tender process in the New Zealand real estate market.
- How does a tender work in NZ?
- A tender is a method of selling property where all interested buyers submit their confidential written offers by a set deadline. Unlike an auction (where bidding is public) or an open negotiation, tenders keep each buyer’s offer secret from the others. Here’s how it works in New Zealand:
- Advertising the Tender: The property is marketed with a “for sale by tender” label and a closing date (for example, “Tenders close 4pm on 30th June, unless sold prior”). Usually no price is advertised – this invites buyers to name their price. If the seller is open to accepting an offer before the deadline, the ads will include “unless sold prior,” warning buyers that the tender could be decided early.
- Buyers Prepare Offers: Interested buyers typically view the property, do their due diligence (such as inspections, LIM reports, financing approvals), and then complete a tender document with their offer. This tender document is essentially a special sale and purchase agreement for the tender. In it, the buyer writes their offered price and any conditions (for example, “subject to finance” or “subject to a builder’s report” – although some buyers will make unconditional offers to be more competitive). The buyer also usually includes a deposit (often 10%) with the tender offer as a show of good faith. All offers are submitted in writing and sealed (or securely, if submitted electronically) to the real estate agent by the deadline.
- Confidential, One-Chance Offers: During the tender period, no buyer knows how many others are bidding or what amounts they’re offering. Each buyer essentially gets one chance to put forward their best offer by the cutoff time. The agent will keep all tender offers confidential (even the fact that you made an offer isn’t disclosed to others). Because of this, buyers are encouraged to put their best foot forward – there might not be an opportunity to increase or change the offer later.
- Closing and Opening Tenders: Once the tender deadline arrives, the agent collects all the sealed offers. Generally, these aren’t opened until after the deadline has passed (unless an early offer has already ended the process). At the scheduled time, the seller (vendor) will open and review all the tender offers, often with the agent present and sometimes the seller’s lawyer as well. This is done privately – it’s not a public event like an auction. All offers are laid out for consideration at once.
- Seller’s Decision: The seller then has a choice to make. They can accept the offer they like best, or they might decide to negotiate further with one (or more) of the tenderers, or they can reject all offers if none meet their expectations. The seller is not obligated to accept the highest offer; they will weigh up price and conditions. For example, an offer that’s a bit lower in price but unconditional (or with a preferred settlement date) might be more attractive than a higher offer full of conditions. The tender terms usually give the seller up to five working days after the deadline to make their decision. During this decision period, the buyers’ offers are typically irrevocable, meaning a buyer cannot withdraw their offer for a set number of days (commonly 5 business days) after the tender closes. This gives the seller breathing room to compare and seek advice without worrying that a buyer will vanish.
- Outcome and Notification: Once the seller decides, the agent will inform the parties of the outcome. If your tender was accepted, congratulations – the seller will sign the tender document to confirm acceptance, and it becomes a legally binding contract for the sale. If your offer wasn’t accepted, you’ll be notified that you were unsuccessful (and any deposit you paid will be returned to you promptly). The seller may accept one offer outright, or in some cases, they might go back to one of the top buyers and negotiate minor changes (such as a higher price or dropping a condition). Any such changes would be initialed on the tender contract by both parties to indicate agreement.
- After Acceptance: If the winning tender was unconditional, then the sale is effectively secured at that point – both parties just proceed to settlement day as agreed. If the winning offer had conditions, the contract will be conditional and the buyer will have an agreed time frame (specified in the tender contract) to fulfill those conditions (for example, to get their finance approved or obtain a satisfactory building inspection). Once the conditions are met, the sale goes unconditional. Settlement (when the remaining money is paid and the property ownership transfers) will occur on the settlement date stated in the tender agreement.
- How do you perform a tender?
- Performing a tender sale involves following a structured process. Whether you’re a seller running the tender or a buyer submitting an offer, there are specific steps to follow to ensure everything is done correctly and legally. Here’s how the tender process is carried out from start to finish:
- Seller Chooses Tender Method: The property owner (vendor) decides to sell by tender, often in consultation with their real estate agent. The agent will explain how tenders work and make sure the seller is comfortable with this method. The seller and agent will set a closing date and time for the tender and prepare a marketing plan. The seller will also set terms they prefer (for example, a certain settlement date, any particular conditions they want to attach, or whether they are open to selling before the deadline).
- Marketing the Property: The agent markets the property just like any sale – photography, online listings, signs, brochures, and open homes – but clearly states it is “For Sale by Tender”. The listing will note the tender deadline and any special notes like “unless sold prior” (if the seller is willing to consider early offers). During the marketing period (which might be a few weeks leading up to the deadline), buyers will view the property and decide if they want to participate in the tender.
- Providing Tender Documents: The real estate agent will have the official tender documents ready. This usually includes a “Particulars and Conditions of Sale of Real Estate by Tender” form – the formal tender agreement. Buyers who are interested can request a copy of these tender documents. Often, the agent will encourage interested parties to register their interest, so the agent can keep them informed of any developments (like if the seller decides to accept an early offer or extend the deadline).
- Buyer Due Diligence: Before making a tender offer, buyers will typically do their homework on the property. As a buyer, you should research the property thoroughly – review the LIM (Land Information Memorandum) and title, get a building inspection if desired, arrange financing pre-approval, and consult your lawyer on the tender documents. You can also ask the agent if there’s a price guide or any indication (sometimes tender campaigns provide a rough idea or recent comparable sales, but often it’s up to you to assess value). Because tenders allow conditional offers, buyers have the option to include conditions, but it’s wise to complete as much due diligence as possible so you can make a confident offer by the deadline.
- Preparing the Tender Offer: When a buyer is ready to make an offer, they must fill out the tender form. This form will ask for all the usual details of a sale offer: the buyer’s name, the price they are offering, the deposit amount (usually 10% of the offer price), the settlement date the buyer is proposing, and any conditions of the offer (or it can be marked as unconditional). The buyer signs this tender agreement, just as they would sign a normal sale contract. At this stage, the buyer also arranges the deposit payment: often, the tender instructions will require a bank cheque or electronic transfer for the deposit amount to accompany the tender. (If the offer isn’t successful, this deposit will be returned. If it is successful, the deposit is usually banked and counts toward the purchase price.)
- Submitting the Tender: The buyer submits their completed tender document (in duplicate) to the place specified (often the real estate agency’s office) before the deadline. Traditionally, tenders are placed in a sealed envelope marked “Tender for [Property Address]” to ensure confidentiality. These days, some agencies also allow electronic submission, but the key is that it remains confidential and is received by the deadline. The agent will collect all tender envelopes and typically lock them away unopened until the due time. It’s crucial that buyers don’t miss the deadline – late tenders might not be considered, so aim to deliver your offer well before the cutoff time.
- No Further Changes: Once submitted, a tender offer is generally binding and cannot be withdrawn or altered by the buyer until the stipulated time (usually up to five working days after the close). Buyers do not get a chance to increase their offer upon seeing others – there is no live bidding. So whatever you put on that tender form is your final offer as at the deadline. Likewise, the agent won’t be negotiating between buyers during the tender period – they may answer questions and guide buyers on how to submit an offer, but they won’t reveal other offers or play bidders off against each other as in an auction.
- Opening of Tenders: At the tender closing time (or very shortly after), the agent will open all the tender envelopes, usually in the presence of the seller. This might be done at the agent’s office or another private setting. Often the office manager or branch manager also oversees the process to ensure everything is handled by the book. Each tender document is opened and the offer details are noted. All offers remain confidential even at this stage – only the seller and those present see them. The identity of tenderers and their offers are not disclosed to other buyers.
- Seller’s Evaluation: The seller now reviews each offer. This can be a straightforward decision or a complex one, depending on the range of prices and conditions. The agent will typically summarize the pros and cons of each tender for the seller. For example: Offer A: $X, unconditional, settlement in 4 weeks; Offer B: $Y (higher price), but conditional on finance and a longer settlement; Offer C: $Z (lower price), conditional on building report. The seller will consider which offer is most appealing overall. They might prefer the highest price if the conditions are acceptable, or they might favor a slightly lower price that’s unconditional for certainty. The tender rules explicitly give the seller the freedom to choose – they are not bound to automatically pick the highest bid.
- Negotiation (if needed): If none of the offers is exactly what the seller wants but one or two are close, the seller can choose to negotiate with a preferred buyer. This is done privately through the agent. For instance, the seller might go back to the highest tenderer and say, “Your offer is attractive, but can you perhaps increase your price slightly or drop that finance condition?” Any negotiations at this stage are typically one-on-one (the seller is allowed to negotiate with one tenderer at a time, and they don’t have to give all buyers a chance to improve their offers). The buyer may agree to the changes – in which case the agent will help both parties amend the tender document (changes are written on the contract and both buyer and seller initial them to indicate agreement). If the buyer doesn’t agree, the seller could then approach another tenderer, or decide to accept one of the existing offers as is.
- Accepting an Offer: Once the seller is satisfied with a particular tender, they’ll sign the Acceptance of Tender on that tender document. At that moment, that tender offer is formally accepted – it becomes a binding contract between that buyer and the seller. The agent will date and witness the signatures as needed. Importantly, as soon as the seller has signed acceptance, all other offers effectively are declined (the agent will later inform those parties that they missed out). The successful buyer is usually contacted first with the good news that their offer has been accepted.
- Notifying Unsuccessful Bidders: After a tender is accepted, the agent will promptly inform the other tenderers that their offers were not accepted. Because their offers were binding until the seller made a decision, those offers now lapse once the winner is chosen (or once the 5-working-day period expires without acceptance). Any deposit cheques or payments from the unsuccessful parties are returned (usually within a day or two). While it can be disappointing for the unsuccessful buyers – and they won’t typically be told the details of the winning price or terms – the process ensures everyone is notified of the outcome once a decision is made.
- Proceeding to Settlement: The tender process itself concludes once an offer is accepted. After that, the sale proceeds like any other sale and purchase agreement. If the accepted tender was conditional, the buyer now works to satisfy those conditions by the agreed date (for example, getting formal finance approval or completing that building inspection). The agent and lawyers will monitor the progress. If and when all conditions are met, the contract is declared unconditional. Then both parties prepare for settlement day, when the remaining money is paid and the property ownership transfers to the buyer. If a condition cannot be met (for example, the buyer’s finance falls through), then that contract may be cancelled – and since the tender process is over, the seller would then decide whether to approach another tenderer (perhaps the “next best” offer could be revisited) or to put the property back on the market anew.
- Why would a seller opt for a tender process?
- Sellers choose the tender process for a variety of strategic reasons. It’s not the right method for every situation, but it offers several advantages that appeal to vendors in New Zealand. Here are some common reasons a seller might opt to sell by tender:
- Creates a Sense of Urgency: A tender sets a firm deadline for offers. This finite timeframe can motivate buyers to act quickly and put forward their best offer before the cutoff. It concentrates the marketing campaign into a short, intense period (often a few weeks), which can flush out serious buyers promptly. Sellers who don’t want a drawn-out sale process appreciate having an end date in sight.
- Encourages Competition: The tender process can foster healthy competition among buyers without them even meeting. Each buyer knows others are likely also submitting offers, so they often raise their price to be competitive. This competitive pressure, similar to a silent auction, can lead to higher offers. Buyers essentially compete blindly, which might result in a premium price for the seller if at least a couple of keen buyers really want the property.
- No Price Constraints: By marketing without an asking price (a tender is often called a “no price marketing” strategy), the seller isn’t tied down to a figure. This avoids the risk of pricing the property too low (and missing out on value) or too high (and scaring buyers off). Buyers set the value in their offers. If the property is hard to price because it’s unique or in a fluctuating market, a tender lets the market determine what it’s worth. The seller can simply evaluate the range of offers and isn’t obligated to accept any that feel too low.
- Confidentiality and Privacy: Tender outcomes are private. Neither the offer amounts nor the final sale price (if a sale occurs) are publicly disclosed in the way auction results often are. Only the seller and the involved parties know the details. Some sellers value this confidentiality – for instance, if it’s a high-profile sale or they just prefer not to broadcast their business. Also, because offers are sealed, buyers aren’t privy to the seller’s price expectations or to each other’s offers during the process.
- Flexibility with Terms: A tender allows the seller to set preferred terms and also to choose from offers that come with various conditions. For example, in the tender documents the seller can specify a desired settlement date, list any chattels (fixtures and fittings) included, and outline any special conditions they require. At the same time, buyers can submit offers with conditions that suit them, which actually broadens the pool of potential buyers (unlike an auction which demands unconditional offers). The seller then has the flexibility to pick the offer that has the best mix of price and conditions. If the seller wants a particular settlement timeframe or other term, they can look for the tender that matches it best. Essentially, the seller has more control to find a deal structured on their terms.
- Time to Consider Offers: In a tender, the seller is typically granted a five working day period after the tender closes to consider all the offers. This is sometimes called an “irrevocability period,” meaning buyers can’t withdraw their offers during this time. For the seller, this is a great advantage: they get a few days to carefully evaluate each offer, consult with advisors or other decision-makers, and negotiate if needed. There’s no pressure to make an instant decision the moment the deadline hits. This can be especially important if, say, a family trust or multiple owners are involved and need to agree on which offer to accept. They have a clear window of time to discuss and choose calmly, which isn’t always possible in an auction or spur-of-the-moment negotiations.
- Multiple Decision-Makers or Complex Sales: Tenders are often chosen for properties owned by entities like family trusts, estates, or companies where more than one person must sign off on the sale. The tender process’s structured timeline and that post-deadline decision period allow these parties to coordinate. For example, if a property is part of a deceased estate and several family members or executors need to agree on the sale, a tender gives them a chance to see all offers at once and then take a few days to reach a consensus on the best outcome.
- Ideal for Unique or Hard-to-Value Properties: If a property is unusual, one-of-a-kind, or has development potential that’s hard to put a dollar figure on, sellers might choose tender. Since buyers may value such a property very differently, having them all submit what they think it’s worth can yield an interesting range of offers. The seller might get pleasantly surprised by an offer that’s higher than any price they would have guessed. Tenders are common in markets like Wellington and for properties like architecturally unique homes or large development sections, where an asking price is difficult to set.
- Allows Conditional Buyers (vs. Auction): Some sellers prefer tender because it doesn’t exclude buyers who need conditions. For instance, first-home buyers or those needing to secure finance or sell another property can still participate by putting conditions on their tender. In an auction, those buyers often can’t compete because auctions are unconditional. So, if a seller wants to ensure maximum buyer participation, including those who require conditions, a tender is more accommodating. More potential buyers can mean a better chance of a strong offer.
- Maintains Control: Throughout a tender, the seller feels a strong sense of control. They control the timeline, they aren’t revealing their bottom price, and they get to choose from multiple offers privately. The seller can also, if they wish, choose to accept an offer before the tender deadline (provided they advertised “unless sold prior”). That flexibility means if an especially good offer comes in early, the seller can take it and conclude the process on their terms. Conversely, if none of the tenders are satisfactory, the seller isn’t forced to sell – they can decline them all and consider other selling methods next.
- What is an example of a tender?
- Example Scenario: To illustrate how a tender works, let’s walk through a fictional example:Sarah is selling her home in Wellington by tender. She lists the property with a real estate agent, who advertises it as “For Sale by Tender – closing 4:00pm, 10th July (unless sold prior).” No price is advertised. During the next few weeks, the agent holds open homes and dozens of interested buyers come through the property. Among them, three buyers (let’s call them Alex, Briar, and Chris) are very keen and decide to submit tender offers.
- Before the Deadline: Alex, Briar, and Chris each do their homework on the property. Alex hires a building inspector to ensure the house is sound. Briar talks to her bank and gets pre-approval for a loan. Chris reviews the property file with his lawyer. All three ask the agent for the tender documents and each fills in the form with the price they’re willing to pay and any conditions they need.
- Alex loves the house and really wants to beat any competition. Alex decides to make an unconditional offer (no conditions at all) and, after analyzing recent sales, offers NZ$805,000. Alex includes a 10% deposit cheque of $80,500 with the tender and chooses a settlement date one month away on the form.
- Briar also wants the house but can’t go unconditional because she needs final bank approval. She makes her offer “subject to finance (5 working days)” as a condition. Briar decides to offer NZ$820,000, a bit higher because she has that finance condition (she hopes a higher price will outweigh the condition). She encloses a deposit as well, and is flexible on settlement timing.
- Chris likes the property but doesn’t want to overpay. Chris includes a builder’s report condition (just to be safe, although he already did an inspection, this gives him an out if something was missed). Chris offers NZ$780,000, a more conservative price, thinking that might be enough. He also attaches the required deposit.
- Tender Closing and Opening: At 4:00pm on 10th July, the tender closes. That evening, Sarah (the seller) meets with her real estate agent at the agency’s office. They open the three tender offers together. Now Sarah can see the details:
- Alex offered $805,000, unconditional.
- Briar offered $820,000, conditional on finance.
- Chris offered $780,000, conditional on a builder’s report.
- Seller’s Decision: Sarah is torn between Briar and Alex’s offers. $15,000 more from Briar is tempting, but Alex’s no-condition offer is very safe and straightforward. Because the tender rules allow it, Sarah decides to negotiate a little with Briar first. Through the agent, she sends a message to Briar: “Your offer is very appealing, but the finance condition is a concern. If you can make your offer unconditional (or at least shorten the finance approval to say 2 days) – and maybe confirm your settlement date to exactly one month as I prefer – I am prepared to accept your offer.” Briar confers with her mortgage broker, who says her finance is essentially approved already. Briar agrees to remove the finance condition entirely to turn her offer into cash/unconditional, and is happy to settle in one month as requested.
- Acceptance: Sarah is delighted – she now has an unconditional offer of $820,000, which is the best of both worlds (highest price and no conditions). She signs the Acceptance of Tender on Briar’s tender document. This formally accepts Briar’s offer. The agent dates it and also signs as a witness.
- Outcome: That evening, the agent calls Briar to congratulate her – “Your tender has been accepted; the house is yours!” Because Briar’s offer is now unconditional, the sale contract is binding immediately. Briar will arrange to transfer the 10% deposit into the agency’s trust account (since physical cheques are being phased out, this happens via online banking the next day). The agent also calls Alex and Chris to inform them that unfortunately their offers were not accepted. Alex is disappointed to have lost out despite a strong effort; Chris expected his lower offer might not win. The agent confirms that their deposit cheques will be returned promptly.
- Aftermath: The property is now sold to Briar. Since it’s unconditional, there are no further conditions to sort out – both parties simply prepare for the settlement day in a month’s time, when Briar will pay the remaining 90% of the price and take ownership of the house. The tender process for Sarah’s property is complete, and it achieved a great result: a competitive price and a firm sale. The details remain private (other bidders and the public won’t automatically know the final price like they would with an auction announcement).
- Before the Deadline: Alex, Briar, and Chris each do their homework on the property. Alex hires a building inspector to ensure the house is sound. Briar talks to her bank and gets pre-approval for a loan. Chris reviews the property file with his lawyer. All three ask the agent for the tender documents and each fills in the form with the price they’re willing to pay and any conditions they need.
- How does a tender work in real estate (template)?
- In New Zealand real estate, the tender process follows a standard template or format set out by industry-approved documents. When we talk about how a tender works “in real estate template,” we’re essentially referring to the formalized steps and documentation that guide every tender sale. The key to the tender process is the tender document (tender agreement), which serves as a template for making and accepting offers. Here’s an explanation:
- Standard Tender Document: The sale by tender uses a special template contract called the “Particulars and Conditions of Sale of Real Estate by Tender.” This is a legally approved form (jointly by the Real Estate Institute of NZ and the Auckland District Law Society) that all tenderers use to submit their offers. Think of it as a structured form or template that ensures every buyer’s offer is presented in the same format and under the same terms. The document is like a regular sale and purchase agreement, but it includes extra clauses specific to the tender process.
- Contents of the Template: The tender form/template will have spaces to fill in all the usual property deal details – the property address, the buyer’s name, purchase price offered, deposit amount, settlement date, and any conditions the buyer wants to include (or a tick-box for “unconditional”). It also clearly states the tender closing date and time and where the tender must be delivered. By using this template, all buyers know exactly how to structure their offer and what rules will govern the process.
- Uniform Conditions: Importantly, this tender document template contains a section of “Conditions of Tender” that apply to everyone. These conditions outline how the tender will be conducted. For example, the template typically says offers must be submitted in a sealed envelope by the deadline, that each tender must include a deposit (usually 10%), and that no tender offer can be conditional on what another offer is (you can’t, say, offer $1,000 more than the highest bid; you must state a fixed price). It’s all done in a format that’s consistent and fair.
- Irrevocability Period: The standard tender conditions (the template rules) usually include an irrevocability clause – meaning every tenderer agrees that their offer cannot be withdrawn for a certain period (commonly 5 working days) after the tender closing date. This clause is in the template to protect the seller’s right to take some time deciding. When buyers sign the tender form, they are agreeing to that condition up front. So, the template itself builds in that offers will remain open (unable to be canceled by the buyer) until either the seller accepts one or that time period lapses.
- Vendor’s Rights (per the Template): Another part of the tender form’s conditions spells out the seller’s rights in the tender. Typically, the template will say the vendor may accept any tender, even if it’s not the highest, or reject all tenders. It will also note the vendor can choose to negotiate with one tenderer without having to negotiate with others. Additionally, the form might allow the seller to extend the tender deadline (often by up to a week, if they choose, by notifying all parties) or even to sell the property before the deadline if they want (hence the “unless sold prior” in advertising, which would be noted in the tender terms). All these clauses are part of the template agreement that everyone abides by.
- Confidentiality and Handling: The tender template also enshrines the idea that tenders are confidential. It may explicitly state that the details of each offer (including the buyer’s identity and offer price) will be kept confidential and not disclosed to other bidders or outside parties. It sets the expectation that all offers will be opened together after the closing time (ensuring a fair process where no early peek or advantage is given).
- Legally Binding Format: When a buyer fills out and signs the tender template, and the seller later signs the acceptance section, that document becomes a binding sale contract. The beauty of the tender system is that the offer and acceptance are all on one standard form – making it very clear when an offer officially turns into a contract. There’s even a specific place on the form for the seller to sign an “Acceptance of Tender.” This standardized template avoids confusion; everyone is literally on the same page.
- Example of Template in Action: Suppose you’re a buyer. You receive the blank tender form from the agent. It’s essentially a template with blank lines to fill in your name, your offer amount, your conditions (if any), etc., and it lists the rules above in fine print. You complete those details with the help of your lawyer (to ensure you do it correctly) and sign it. That completed template is now your offer. If the seller signs the acceptance section on that same document, the bottom portion of that form (the “Acceptance”) usually reads something like: “The vendor hereby accepts the tender and agrees to sell the property to the tenderer on the terms and conditions set forth above.” Once signed and communicated, it’s a done deal. If the seller doesn’t accept, then the offer expires after the 5 working days post-deadline as per the template conditions.
- Guidance and Fairness: Because the process relies on this standard template, both buyers and sellers have clarity. Real estate agents will guide each buyer on how to fill out the tender form correctly (for instance, making sure the offer is written as a clear dollar figure, since the rules usually forbid vague offers). The use of an industry-approved template contract helps ensure the tender is conducted by the book, legally and ethically. If any disputes arise, everyone refers back to the tender document’s conditions to resolve them.
- Disadvantages of selling by tender (NZ)
- While selling by tender has its advantages, it’s not without potential downsides. It’s important for sellers to understand the possible disadvantages of the tender process in New Zealand before deciding if it’s the right method for their property. Here are some of the key drawbacks and challenges:
- No Guarantee of a High Price: Competition isn’t guaranteed. If your tender fails to attract multiple serious bidders, you might end up with only low offers – or even no offers at all. In a tender, buyers submit what they think the property is worth, and if the market interest was overestimated, the offers could be disappointing. Unlike an auction where an auctioneer can cajole people to bid a bit more in the moment, a tender doesn’t provide a mechanism to push the price up if buyers come in low. The result might be underwhelming, and the seller might feel the price fell short of expectations.
- Lack of “Auction Buzz”: Tenders lack the emotional excitement or urgency of a live auction. In an auction, buyers sometimes get caught up in bidding wars (“auction fever”) and may bid beyond their initial comfort zone, driving the price higher. In a tender, each buyer calmly decides their offer in private – there’s no public competitive atmosphere to elevate bids. This means you miss out on the chance of an impulsive high bid that an auction might generate. All offers in a tender are more calculated, which could result in a lower final price than an intense auction could achieve in a hot market.
- Short Marketing Period: Tender campaigns are typically short (often just a few weeks from listing to deadline). This compressed timeframe might mean fewer potential buyers hear about or see the property in time. If a buyer isn’t actively looking in that window, they might miss the opportunity to tender. With less exposure time compared to an open-ended sale, you risk not reaching every possible interested party. In a slower market, some buyers move cautiously and a tight deadline could deter them or pass them by.
- Higher Marketing Pressure and Costs: Because you’re aiming to get as many buyers as possible to take action by a certain date, agents often recommend an intense marketing blitz for a tender. This could mean extra advertising: premium online listings, mail drops, more open homes in a short span, etc. The seller might incur higher upfront marketing costs to generate sufficient interest quickly. If the tender doesn’t result in a sale, that money is essentially wasted, and the property might need to be re-marketed by another method (possibly incurring further expense).
- Buyer Reluctance or Confusion: Not all buyers are familiar or comfortable with the tender process. Some may prefer the transparency of an asking price or an auction where they at least see other bids. Tenders require buyers to commit effort (and sometimes money for inspections) without any guidance on price and with no guarantee of feedback. This can put some buyers off, reducing your pool of bidders. Especially first-home buyers might find tenders intimidating or confusing, so they might avoid tender listings, thinking them too complex or competitive.
- Buyers Can Wait Until Last Minute: In a tender, buyers know they have until the deadline to submit. Some will use all that time to consider and may only put in an offer at the very last moment – or they may decide not to submit at all after thinking it over. There’s no immediate pressure until the final day, unlike a “buy now or someone else might snatch it” scenario in price-by-negotiation sales. This means as a seller you might have anxious open homes with lots of interest but no concrete offers until the end, and there’s the risk that interested parties could get cold feet by deadline day and opt not to tender at all.
- Uncertainty and Stress: The tender process can be nerve-wracking for a seller. You often won’t know until the deadline passes whether you have any acceptable offers. The period between listing and the tender close can feel uncertain – you might get positive signals (like many viewings) but there’s always a chance that come tender day, none of the offers are good enough. If that happens and you have to reject all tenders, it can be disheartening and also public knowledge that the tender didn’t result in a sale, which might put a question mark over the property in buyers’ minds going forward.
- No Transparent Market Feedback: With a tender, since no price is advertised and buyers aren’t openly bidding, it can be harder for a seller to gauge the market’s perception of value during the campaign. You rely on the agent’s feedback from buyers (what buyers say during viewings) to get a sense of likely price. But you won’t truly know the market value until the envelopes are opened. If all the offers end up well below what you hoped, that feedback comes late in the process. In an open negotiation or an auction, you often get a clearer idea of buyers’ price expectations earlier (through offers or bidder registrations), giving you a chance to adjust strategy. Tenders keep everyone’s cards close to their chest, including leaving you somewhat in the dark until the end.
- Intensive Process (Open Homes and Enquiries): To maximize interest in a short time, tenders usually involve multiple open homes and private inspections in quick succession. As a seller, you have to keep your property in tip-top presentation condition continuously for those few weeks. This can be tiring or disruptive, especially for families or tenants living in the home. It’s a sprint to the deadline with potentially a lot of foot traffic through your house. Some people find this intensity stressful compared to a normal sale which might have a more spaced-out schedule of viewings.
- Possibility of Needing a Second Round: If the tender doesn’t produce a satisfactory result, the seller might have to go back to the market using a different method (like listing with an asking price or scheduling an auction later). This essentially means lost time and momentum. The property can appear “stale” to buyers if it’s re-listed after a failed tender, and buyers might wonder why it didn’t sell, potentially weakening your negotiating position later. So, there’s a risk in tender – a kind of all-or-nothing gamble on that one deadline.
- Negotiation Can Prolong the Process: If after tenders close you enter into a negotiation with one of the tenderers, the sale isn’t immediate. It can take days (within that irrevocable period) to hammer out changes to price or conditions. In that sense, the sale isn’t as instantaneous as an auction hammer fall. It can feel drawn out if multiple counter-offers go back and forth. During these negotiations, other interested buyers are in limbo. While this is not necessarily worse than a normal negotiation, it means the tender didn’t yield a straightforward winner and time is being spent to finalize a deal, slightly reducing the benefit of the tender’s set timeline.
- Less Suitable in Weak Markets: In a buyer’s market (high supply, low demand), tenders may be less effective. Buyers have plenty of choice and may not feel the urgency to compete. In such cases, a tender could lead to very few or low offers, whereas a priced listing or negotiation might have allowed a bit more dialogue to convince a buyer to come up in price. So choosing tender in a slow market can be a disadvantage if it fails to spur the competition it’s designed to create.
- How does a tender work in real estate (example)?
- Let’s look at another example to see the tender process in action, highlighting some variations you might encounter. This example will illustrate how a tender can play out, including the possibility of an early offer before the deadline:Imagine a property in Auckland is being sold by tender. The tender is scheduled to close in three weeks. The advertising says “Tender closes 5pm, 20th August (unless sold prior)”. Many buyers come to the open homes, and one particularly keen buyer (let’s call her Priya) falls in love with the house. Priya is worried that competition will be fierce by the deadline. She decides to try a bold move: making an early offer to tempt the seller into closing the deal before the tender deadline.
- Early Offer Scenario: One week into the marketing campaign – still two weeks before the official tender close date – Priya submits a very strong offer through the tender process. She fills out the tender document with an attractive price (perhaps even above the range she thinks others might offer) and marks it unconditional. She also makes the offer valid for immediate acceptance, essentially signalling to the seller, “I’m putting my cards on the table now.” Priya’s offer is delivered to the agent, who informs the seller that an early tender has come in.
- “Unless Sold Prior” in Action: Because the property was advertised “unless sold prior,” the seller is within their rights to consider and even accept an offer before the official deadline. The seller and their agent sit down to review Priya’s offer right away. Suppose Priya offered $900,000 with no conditions – a very enticing proposal and perhaps higher than what the seller was realistically expecting. The seller might think, “This is an excellent offer and it’s risk-free (unconditional). If I wait until the tender date, I might get more offers, but there’s no guarantee any will beat this, and I risk losing Priya if I don’t respond now.”
- Decision to Accept Early: After some thought, the seller decides to accept Priya’s offer immediately, effectively ending the tender process early. The seller signs the acceptance on Priya’s tender document, and the agent promptly informs Priya that her offer is accepted – congrats, the house is hers! This happens, say, on August 10th, well before the scheduled closing date.
- Notifying Other Interested Parties: The agent now has to let other potential buyers know what happened. This typically means calling up or emailing anyone who had registered interest or who the agent knew was preparing to make a tender. They’ll be told the property has been sold prior to the tender deadline. It might be disappointing news for those who were waiting to submit their offers later. (This scenario is exactly why agents advise interested buyers to register their interest and even consider making their best offer early if they truly want a property – because a strong early bird can sometimes pre-empt the whole tender.)
- Outcome of Early Acceptance: Priya secures the property without facing any competition, and the seller secures a sale quickly at a great price. The remaining two weeks of the marketing campaign are essentially called off. The “Tender Closed Early” notices will go out, and no further offers are entertained.
- Alternate Ending (No Early Acceptance): It’s worth noting that in some cases, a seller might receive an early offer like Priya’s and choose not to accept it immediately. They might feel confident that waiting could bring even better offers. In that case, they would politely thank Priya but still let the tender run its course (perhaps with Priya’s offer still on the table as one of the tenders). Priya’s offer would then sit unopened until the deadline along with any others. However, many sellers, if presented with an outstanding offer and given the option, will consider accepting it rather than gambling on the unknown.
- Post-Tender Negotiation: The seller, through the agent, can go to Buyer B and say, “Your price is good. If you can remove your valuation condition (or if you can confirm your valuation immediately, since the tender is over), I am inclined to accept your offer.” Buyer B might say, “I’m confident about my offer; yes, I’ll drop that condition and go unconditional now.” If so, the seller can accept B’s adjusted offer and proceed. If Buyer B was unwilling, the seller could approach Buyer C with a similar request (perhaps asking C to shorten their settlement period).
- Exclusivity of Negotiation: Importantly, the seller doesn’t have to give both B and C a chance to improve; they can pick the one they prefer (maybe B’s terms were slightly better to begin with) and negotiate only with B. This one-on-one negotiation is permitted in a tender – the seller isn’t running a second “auction” between the top bidders; they’re privately negotiating to polish the best offer.
- Finalizing the Deal: Suppose Buyer B agrees to drop the valuation condition. The agent has Buyer B sign an amendment (or a new copy of the tender form reflecting no conditions). The seller then accepts Buyer B’s now-unconditional $770k offer. The other buyers (A and C) are informed that, despite competitive offers, another offer was accepted. Buyer A might be surprised a higher (but conditional) offer won, but that’s how a tender can work out – price isn’t the sole factor.
- Tender vs. deadline sale?
- Tender and deadline sale are two sale methods in NZ real estate that are similar in that they both set a timeframe for buyers to submit offers. However, there are some important differences between them. Let’s break down how they compare:
- Basic Concept: Both tenders and deadline sales involve marketing a property for a set period, inviting buyers to put in their best offers by a certain deadline. In both cases, buyers usually submit offers without knowing what others are offering (effectively “sealed bids”). The key distinction is in the seller’s flexibility and process of handling those offers. A common way to put it is: “A deadline sale is like a less formal or more flexible tender.”
- Form of Offer: In a tender, buyers must use a special tender document (a tailored sale agreement for tender) and typically include a 10% deposit with their offer. In a deadline sale, buyers usually make offers on a standard Sale and Purchase Agreement form (the same contract used for private treaty sales) and they do not pay a deposit up front – the deposit is only paid by the successful buyer after the offer is accepted (just like a normal sale process). So, tenders have a bit more formality: the paperwork and upfront deposit show commitment, whereas deadline sale offers are handled like normal offers but with a time limit.
- When Offers Are Considered: This is perhaps the biggest difference. In a tender, the general practice is that all offers are held and only opened at the same time after the deadline passes. The seller usually waits until tender closing day, reviews all offers together, and then makes a decision. In a deadline sale, the seller has the option to consider and even accept offers as they come in, at any time up until the deadline. The deadline in a deadline sale is the latest date by which offers will be reviewed, but it’s not an exclusive review date – an outstanding offer submitted early in the campaign can be accepted before waiting for the final day. Essentially, tender = usually wait until the deadline to open offers; deadline sale = can do deal before deadline if desired.
- “Unless Sold Prior”: With tenders, it’s common to advertise “unless sold prior,” but often tender campaigns do try to let the process run to the end (unless a really irresistible early offer appears). With deadline sales, “unless sold prior” isn’t just a contingency – it’s almost the expectation. Sellers often are actively open to early offers in a deadline sale. From a buyer’s perspective, this means in a deadline sale you must be on your toes – the property could sell the day after it’s listed if someone comes in with a strong offer, whereas with a tender (if not sold prior) you know it will at least remain on the market until the tender date.
- Legal Binding Period for Offers: In a tender, as mentioned, the offers are usually irrevocable for up to 5 working days after the deadline. That means a tender buyer is locked into their offer for that period and can’t back out (they basically pre-consent to this when signing the tender form). In a deadline sale, offers are generally treated like normal private offers – a buyer can set an expiry time on their offer (for example, “This offer is open for acceptance until 5pm tomorrow”), and if the seller doesn’t accept by then, the offer lapses. Also, prior to acceptance, a buyer in a deadline sale could withdraw their offer (unless they agreed to keep it open for a certain time). There isn’t a special rule forcing them to stand by it for days on end. In short, tender offers bind the buyer for a fixed post-deadline window, whereas deadline sale offers don’t have that automatic binding period (the buyer’s commitment is only until their offer’s stated expiry or until they withdraw, as per normal sales).
- Negotiation Process: Both methods allow the seller to negotiate with buyers on terms if they wish. However, with a tender, negotiation typically happens after the deadline, with one (or perhaps more) chosen tenderers in private, without the other bidders knowing. In a deadline sale, negotiation can be more fluid and can happen at any point: if one buyer submits an offer, the seller might counter-offer or seek changes, and other offers might come in during that period. In practice, if multiple offers come in by the deadline in a deadline sale, the situation can resemble a tender or a multi-offer negotiation – the agent will inform each buyer that it’s a multi-offer situation and usually ask everyone to put forward their “best and final” (similar to sealed bids). So the endgame might look the same (several sealed offers considered together). The difference is in a deadline sale, those offers might not all arrive exactly at the same time; some could have been submitted earlier and just held awaiting the deadline, others last-minute.
- Seller’s Flexibility: A deadline sale offers the seller more flexibility. They can choose to accept an offer whenever it suits them, not strictly after a certain date. They can still wait until the end to compare all offers if they prefer, but they aren’t obligated to. This flexibility can be advantageous if, say, a strong offer comes in early or if circumstances change and the seller needs to wrap up the sale quickly. A tender is a bit more structured and rigid – the expectation is usually that the process runs its course to the deadline (again, unless a pre-deadline clause is invoked). Some have described a deadline sale as “a tender without rules.” That’s an exaggeration, but it hints that tenders are more rule-bound (with that formal tender document dictating the process), whereas deadline sales are essentially a regular private sale with a target date to spur buyers.
- Conditional Offers: Both tenders and deadline sales allow buyers to include conditions (unlike auctions which are unconditional). There’s no real difference here: buyers can make conditional or unconditional offers in both formats. Sellers in both cases will weigh the conditions as part of choosing the best offer. So neither method has an edge in terms of allowing conditions – they are equal on this front.
- Transparency: Neither tenders nor deadline sales reveal offer details to other buyers during the process; both are closed offer methods. However, one subtle difference is how the existence of offers is handled. In a deadline sale, because a seller can accept an offer early, if you’re a buyer who has registered interest, agents will often alert you like, “Hey, we’ve received an offer, the vendor is considering it – if you’re interested, you should also put in your offer now.” This can create a situation similar to a multi-offer negotiation before the deadline. In a tender, agents will also usually inform interested parties if someone submits a pre-deadline offer and the vendor is considering ending it early (“unless sold prior” scenario) so they can hurry and submit theirs too. In practice, both methods rely on good communication by the agent to make sure no keen buyer misses out unknowingly. But with a deadline sale, it’s more commonplace that offers drip in and are dealt with in the lead-up to the deadline; with tenders, most action happens at once at the end.
- Outcome Handling: In a tender, after the deadline, the seller might take a day or a few days to decide. Other buyers just have to wait during that period due to the irrevocability of their offers. In a deadline sale, if multiple offers come in by the deadline, usually the seller will decide very quickly (often on the same day the “deadline” ends) because offers might have expiries or because they don’t want to lose momentum. If the seller got just one offer by the deadline, they might negotiate or counteroffer, effectively treating it like a normal negotiation which might go a couple of days. The process after a deadline sale’s end date is akin to a normal private sale; after a tender deadline it’s a bit more formalized in giving the seller up to 5 days.
- Tender is often preferred in situations that call for a very controlled process – e.g., in a very competitive market like Wellington traditionally, or when the seller absolutely wants all offers presented together after a fixed date. It can feel more organized and fair (all bids opened simultaneously), and it ensures the seller has that protected decision period.
- Deadline sale is a bit more flexible and faster-moving, which can be advantageous if the seller wants the freedom to grab a great offer as soon as it appears. Deadline sales have become popular because they combine the best of both worlds: the urgency of a deadline with the flexibility of negotiation.
- Particulars and Conditions of Sale of Real Estate by Tender
- The “Particulars and Conditions of Sale of Real Estate by Tender” is the formal title of the tender sale contract used in New Zealand. It’s essentially the rulebook and contract for a sale by tender. Here’s what this document entails in plain language:
- Standard Approved Form: This is a pre-printed form (template) approved by the Real Estate Institute of New Zealand (REINZ) and the Auckland District Law Society. It’s specifically designed for selling property by tender. Both sellers and buyers will use this form to formalize the tender process. The “Particulars” part refers to the details that will be filled in (property address, names, prices, etc.), and the “Conditions of Sale” part refers to the terms and conditions that apply to the tender process and the eventual sale.
- Property Details and Particulars: At the top, the form has spaces to fill in all the basic details of the property and the sale. For example: the address of the property, legal description (title number, etc.), chattels included (like stove, curtains, etc.), the tender closing date and time, and the place or method by which tenders must be submitted. It will also name the vendor (seller) and the real estate agent handling the tender. Essentially, this section makes clear what is being sold and when/how offers must be delivered.
- Offer Submission Requirements: The form’s conditions will state how a tenderer (buyer) must submit their offer. Typically, it says a tender must be submitted in this form, in duplicate, in a sealed envelope labeled appropriately, by the deadline (time and date) at the specified address (often the agent’s office). “Time is of the essence” is usually noted, meaning the deadline is strict. If you don’t meet it, you’re out of luck unless the vendor extends it formally.
- Price and Currency Clarity: It usually requires that the offer state a single price in NZ dollars, without any tricky formulas or escalation clauses. For instance, you can’t write “$5,000 above the highest offer” – you have to put a definite number. This keeps all tenders on an equal footing and easy to compare.
- Deposit Clause: One key condition is about the deposit. The tender terms almost always require that a deposit (commonly 10% of the offer price) be included with the tender submission. The form will say something like: “A tender must be accompanied by payment of the deposit, equal to 10% of the purchase price.” In practice, buyers might attach a bank cheque or evidence of an electronic transfer for that amount. The conditions will further explain that if an offer is not accepted, the deposit is to be returned to the buyer (usually within a short timeframe, like two working days after the tender decision). No interest is paid on these deposits while held. If the offer is accepted, the deposit is then typically banked and applied towards the purchase price.
- Execution of Tender: The document outlines how to sign the tender properly. It covers scenarios like: if someone is signing on behalf of a company or trust, they need to have authority; if an agent (like a lawyer or real estate agent) is signing for a buyer, they need the proper power of attorney or authority attached. These details ensure that each tender submitted is properly signed and legally valid.
- Confidentiality: There’s usually a clause that all tenders (and the identity of tenderers) will be kept confidential and not revealed to other tenderers or any third parties (except maybe some aggregated stats to REINZ without identifying info). This assures buyers that their offer is truly secret. It also means the seller can’t use one buyer’s offer to leverage another during the tender process (until maybe after opening when they might negotiate privately, but they still wouldn’t disclose the other party’s details).
- No Withdrawal (Irrevocability): A very important condition in this document is that each tendered offer is irrevocable and cannot be withdrawn by the buyer until a specified time after the closing. Typically, it will state that tenders remain open and cannot be retracted by the tenderer until (for example) 5:00pm on the fifth working day after the tender closing date (or until a particular “Tender Acceptance Date” defined in the form). This legally binds buyers to keep their offer on the table for that period. If a buyer tries to back out earlier, the terms they agreed to in the tender form could potentially make them liable. This clause gives the seller a window to consider offers at leisure.
- Acceptance of Tender: The form explains how an offer is accepted. It usually has a section labeled “Acceptance of Tender” where the seller will sign and date if they choose that tender. The conditions might say: “A tender is deemed to be accepted upon the vendor signing the acceptance of tender on this form. The acceptance is effective (and the contract formed) once the vendor’s acceptance is communicated to the successful tenderer or their lawyer.” This means once the seller signs and the buyer is informed (notification can be by phone or email via their lawyer, etc.), we have a binding contract under the terms of that tender.
- Vendor’s Rights and Discretion: The tender conditions explicitly list the rights of the vendor (seller). Common points include:
- The vendor may sell the property at any time and in any manner they wish, even outside the tender, before or after – meaning they are not obligated to stick to only these tenders (this covers the “unless sold prior” situation or even if they wanted to negotiate after).
- The vendor may reject any or all tenders (even the highest offer can be turned down, no reason needed).
- The vendor may negotiate with any tenderer (and not necessarily with others) after opening the tenders. They can choose one party to talk to and ignore the rest during negotiations.
- The vendor can re-advertise or start a new tender process if they don’t accept any offers (essentially, they can go back to market).
- The vendor may ignore any irregularities in the tenders. This means if someone made a small mistake in their tender submission (maybe forgot to initial a page or something), the vendor can choose to overlook it rather than disqualify the offer.
- The vendor can extend the tender deadline. Often the clause allows them to extend the closing date by a certain amount (say up to 5 or 7 working days) by notifying all known tenderers, perhaps if they feel more time is needed or if an unexpected event occurred.
- After Acceptance – Next Steps: The tender conditions integrate with the General Terms of Sale (often an attached standard set of real estate sale terms, similar to any sale contract). So once a tender is accepted, those general terms kick in to govern things like what happens if a condition isn’t met, when the balance of purchase price is paid, etc. Essentially, the tender document + acceptance becomes the sale contract. If the offer was conditional, the buyer will still need to satisfy those conditions by the deadlines stated, just like a normal conditional contract.
- GST and Other Clauses: The form also has sections for things like GST (whether the price includes GST or not, relevant for some property types or if the seller is GST-registered), and any additional clauses or modifications can be attached if agreed (though generally tender forms discourage a lot of changes because of the sealed bid nature).
- How to win a deadline sale in NZ?
- Buying in a deadline sale (also known as a deadline treaty) can be challenging, because you often get only one chance to make your offer and the property could sell at any moment. If you’ve found a house being sold by deadline sale that you really want, here are some tips on how to improve your chances of “winning” – that is, having your offer accepted:
- Do Your Homework Early: In a deadline sale, you might not have the luxury of waiting until the last week to investigate the property – the seller could accept an offer at any time. So, start your due diligence immediately. Obtain the property information pack from the agent (title, LIM report, etc.) and have your experts (lawyer, builder, etc.) lined up quickly. If possible, conduct a building inspection and review the LIM as soon as you can. Basically, get all your questions answered well before the deadline. This way, you’ll be in a position to make a confident, well-informed offer on short notice if needed.
- Sort Out Your Finance: Make sure your finance is pre-approved and ready. Talk to your bank or mortgage broker early on and let them know you might need to move fast on this property. If the lender needs a registered valuation for the property, try to get that arranged ahead of time. The goal is to be as financially prepared as if you were bidding at an auction. In a deadline sale, a clean, unconditional offer can be very persuasive to a seller, so having your finance sorted could allow you to drop any finance conditions – which greatly strengthens your offer.
- Register Your Interest: Let the listing agent know you are interested and are likely to submit an offer. This is crucial. By registering your interest, you ensure the agent will keep you in the loop. If another buyer submits an offer early, a good agent will inform all interested parties (you included) that “an offer has been received.” That gives you a chance to get your own offer in before the seller signs a deal. If you stay silent, you might miss an opportunity because the property could be sold without you knowing. So maintain regular contact with the agent throughout the campaign.
- Consider Making an Early Offer: If you’re extremely keen on the property and have a sense of its value, don’t be afraid to strike early with a strong offer. While the common approach is to wait until near the deadline, there’s a strategic advantage to beating the rush. A very attractive early offer can sometimes convince a seller to cancel the deadline sale and accept your offer on the spot (remember “unless sold prior” allows this). If you go this route, make sure your offer is compelling (ideally at a price that’s at the top end of what you’d be willing to pay, and with minimal conditions). Early offers should usually be unconditional or close to it, and often above what you suspect others might offer later. Essentially, you have to give the seller a reason to halt the process for you.
- Put Forward Your Best Offer (No Regrets): Whether you submit early or wait until the deadline, it’s likely you’ll get only one shot at naming your price. In a deadline sale you typically won’t get a chance to negotiate back-and-forth in a bidding war scenario. So, make your first offer count. Determine the absolute maximum you’d be happy (and able) to pay for the property – the number where, if someone else beats you by a small margin, you won’t kick yourself thinking you would have paid that. Then consider offering close to or at that number. It might feel uncomfortable to effectively outbid yourself, but remember you’re trying to outbid others blindly. You want your offer to stand out to the seller as the obvious choice. Often the highest offer wins in a deadline sale, so long as the rest of the terms are acceptable.
- Minimize Your Conditions: Sellers compare offers not just on price, but on conditions and terms. To win a deadline sale, you want to make your offer as easy and risk-free for the seller as possible. That means fewer conditions (or none, if you can manage). If you can safely do so, consider making your offer unconditional – this might require doing all inspections and financing homework beforehand as noted. If you must have conditions (for example, a finance clause or a short due diligence period), try to keep the timeframe tight and the conditions reasonable. For instance, “subject to finance for 5 working days” is more attractive than “subject to finance for 15 working days.” The fewer hurdles the seller sees in your offer, the more likely they’ll choose it, even if it’s not the very highest dollar figure.
- Flexible Settlement and Terms: Find out if the seller has any particular needs or preferences – the agent can sometimes hint at what the seller values. Maybe the seller wants a quick settlement, or conversely needs more time before moving out. If you can align your offer with the seller’s ideal settlement date or any other terms (like perhaps they want to rent back for a month, or they want to exclude a certain light fitting – it could be anything), accommodating those will make your offer more appealing. Being flexible and agreeable can set your offer apart because it shows you’re cooperative. Always communicate through the agent that you’re willing to work with the seller’s timeline.
- Write a Personal Letter (Optional): This is a more emotional tactic and may not always impact a logical decision, but occasionally buyers include a personal note to the sellers with their offer, expressing what they love about the home and assuring a smooth process. In New Zealand, this isn’t as common as in some markets, but it has been known to have a positive effect in some cases – especially if the sellers have an emotional attachment to the home. Use this strategy with caution: keep it sincere and brief if you choose to do it. Ultimately, price and terms carry the most weight, but a kind word can sometimes tip the balance if offers are otherwise very close.
- Be Prepared to Act Fast: In a deadline sale, timelines can shift. If the agent calls you and says, “The vendor has an offer in hand and will look at all offers tomorrow,” you might need to scramble to get your offer ready sooner than expected. Always have your lawyer on standby to review any contract if needed, and funds accessible for a deposit payment. Essentially, stay alert and responsive. If you snooze, you might literally lose, because the seller can accept another offer while you’re still getting organized.
- Stay Calm in Multi-Offer Situations: If you find out that multiple offers are being presented (which is common by the deadline or if an early offer triggers others), don’t let that discourage you – it actually means the property is likely going to go for a fair market value. Stick to your plan: offer what the property is worth to you. The agent might not give you a chance to increase your offer later, so just ensure your first offer is also your best. Once submitted, try not to second-guess yourself too much; you did your homework, now it’s in the seller’s hands. If your offer is not accepted, know that you gave it your best shot.
- Follow Up: After you submit your offer (especially on the actual deadline day), keep your phone handy. The agent or your lawyer will contact you if you’ve won, or sometimes to clarify a point or even to negotiate minor adjustments. Respond to any communications quickly. If the seller comes back with a counter-offer or a request (maybe they love your offer but want a slightly higher price or a different settlement date), be ready to make a decision and respond. This usually will happen within hours of the deadline or on the deadline day itself, as sellers in deadline sales often want to wrap things up quickly.
- Sale by tender meaning (NZ)
- “Sale by tender” in New Zealand means selling a property through a process of sealed, confidential offers submitted by a fixed deadline. In other words, it’s a method of sale where the seller invites all interested buyers to put their best offer in writing by a certain date, without revealing any pricing expectations or other offers. It’s somewhat analogous to a silent auction or a bidding contest behind closed doors.To break down the meaning further:
- When a home is for sale by tender, you won’t see an asking price. Instead, the listing will say that the property is being sold via tender and will specify the deadline (date and time) by which tenders (offers) must be submitted.
- Prospective buyers must submit their offers confidentially, usually in a sealed envelope or via a secure process, on a special tender form. Each buyer’s offer remains secret from the other buyers. This means buyers are effectively bidding blind – they have to decide what the house is worth to them without knowing what others might pay.
- All the offers (tenders) are then presented to the seller at the same time once the tender period closes. The seller will review these offers in private, often with their real estate agent and maybe their lawyer.
- The seller will then choose the offer that is most acceptable. “Sale by tender” implies the seller has the freedom to choose any of the offers or none at all. The seller might take the highest price, or they might take a slightly lower price that has better terms (like an earlier settlement or no conditions). They could also reject all offers if none meet their expectations.
- A key feature of a tender is that an offer, once submitted, is usually a binding offer for a certain period. The buyer can’t just retract it on a whim the next day. If the seller decides to accept that offer, the buyer is obligated to go through with the purchase (assuming any stated conditions in the offer are met).
- “Sale by tender” also means that the result of the process is private. Unlike a public auction where the selling price is often shouted out in the room or can become public knowledge, tenders are closed-door. Only the parties involved will know the final sale price and terms (unless they choose to disclose it or it shows up in public sales records later). During the tender, buyers don’t know how many others are tendering or what amounts they’re offering, and after the tender, unsuccessful buyers typically are just told they didn’t win (they’re not usually told the winning price).
- Sale by tender is a fairly common method, especially in some regions. It has been popular in places like Wellington, and for properties that are unique or hard to value. It’s one of several sale methods (others include auction, deadline sale, by negotiation, etc.).
- From a legal standpoint, a sale by tender isn’t a separate law or anything; it’s just a process defined by the tender documents. But once a tender offer is accepted, it’s a legally binding contract for sale just like any other real estate transaction.
- For buyers, understanding the meaning of tender is important so they know what they’re getting into – it means you have to put your offer forward without much feedback, and you often won’t get a second chance. For sellers, it means you commit to a campaign that culminates on a deadline where you hope to have multiple offers to consider.
- Tender process (NZ)
- The tender process in New Zealand is a structured way to sell real estate, where the entire sale process is driven by a preset timeline and formal offer submission procedure. Here’s an overview of how the tender process unfolds from start to finish:
- Preparation and Marketing: The seller, with their real estate agent, decides to use the tender method. They set a closing date and time for the tender. The property is then advertised as “For Sale by Tender.” Marketing materials clearly state the deadline and often include the phrase “unless sold prior” if the seller is willing to accept an early offer. During the marketing period (usually a few weeks), potential buyers inspect the property (through open homes or private viewings) and do their due diligence investigations.
- Interest and Information Sharing: Interested buyers are encouraged to register their interest with the agent. The agent provides them with a tender pack, which typically includes the tender documents (the official tender agreement form), property information (title, LIM report, etc.), and guidance on how to submit a tender. Buyers will often consult their lawyers at this stage to review the tender documents and guide them on any legal points.
- Buyers Prepare Offers: Each interested buyer works on determining their offer price and conditions. They will fill out the tender form with:
- The price they are willing to pay.
- Any conditions (for example, subject to finance, building inspection, or they might choose to make it unconditional).
- Their preferred settlement date (when they would pay the remainder and take possession).
- Their signature, committing to the offer as a legal agreement if accepted.
- Submitting the Tender Offer: All tender offers must be submitted by the deadline. Typically, buyers deliver their sealed tender envelopes to the real estate agent’s office (or sometimes electronically via a secure system, depending on the agency). The envelope is usually labeled as a tender for the specific property to ensure it’s handled correctly. When a buyer submits, the agent will note the time of receipt and keep it secure. No tenders are usually opened or revealed before the official closing time.
- Tender Closing: At the specified deadline (date and exact time), the tender period ends. From that point, no new offers should be accepted (unless the seller formally extends the deadline for some reason). The agent will then gather all the submitted tenders that have come in.
- Opening of Offers: Shortly after closing (often the same day, sometimes within hours), the agent will arrange a meeting with the seller to open all the tenders. This is done in private. The agent may have their office manager or another colleague present as a witness or to assist in tabulating the offers. They open each envelope (or print out any electronic submissions) and present the details to the seller. They’ll typically prepare a summary: e.g., Buyer A offered $X with Y conditions, Buyer B offered $Z unconditional, and so on. This is the first time the seller sees exactly what each buyer is offering.
- Evaluation of Offers: The seller now takes time to evaluate the offers. They will compare not only the prices, but also the conditions and any other terms. The real estate agent can advise and provide insight (for instance, if one buyer is known to be very keen, etc., or what the risks of a condition might be). At this stage, the seller might also seek input from their lawyer, especially if any of the offers have unusual conditions or legal clauses attached.
- Decision or Negotiation: Based on the offers, the seller will do one of the following:
- Accept one of the offers outright. They’d choose the offer that looks the best overall and simply decide to take it.
- Negotiate with one (or more) tenderers. For example, the seller might go back to the highest-priced offer and say “we’d sign if you could increase the price by $5k” or “if you could waive that finance condition.” This negotiation is done via the agent usually, and often only with the top candidate. If that negotiation succeeds, the terms are adjusted and that offer is then accepted. If it doesn’t, the seller might try negotiating with a different tenderer, or fallback to accepting another offer as-is.
- Reject all offers. If none of the tenders are satisfactory (maybe all came in too low), the seller can choose not to accept any. They might then decide to either re-open negotiations with all parties inviting better offers, or end the tender process and try a different sales method.
- Acceptance of Tender: When the seller is happy with a particular offer, they will sign the Acceptance section of that buyer’s tender document. This is the formal acceptance of the offer. The agent will then date it and ensure everything is properly signed. At this point, a binding contract is formed between that buyer and the seller at the price and terms agreed in the tender. The sale is essentially made (subject to any conditions that need to be fulfilled).
- Notification and Next Steps: The successful buyer is informed (usually a phone call with the happy news, followed by a written confirmation). Any unsuccessful buyers are also notified that their tender was not accepted. The agent arranges to return the deposits for the unsuccessful tenders (and those offers effectively lapse now). If the winning offer had a deposit with it, that deposit is typically now placed in the real estate trust account to hold until settlement (or until it’s released according to the contract terms).
- Conditional Period (if applicable): If the accepted tender was unconditional, we skip to the next step. If it was conditional, then the process enters a conditional period similar to a normal private sale. For example, say the offer was “$800,000 subject to finance and a builder’s report within 10 working days.” The buyer now has 10 working days to get their finance approved and the building inspection done. The buyer (and their lawyer or agent) will notify the seller (through the seller’s agent or lawyer) once those conditions are met or if there’s an issue. The tender agreement would specify the last date for conditions to be satisfied. If the buyer satisfies or waives all conditions by that date, the contract goes unconditional – meaning it’s all go for settlement. If a condition isn’t met (e.g., finance is declined), the contract can be cancelled and typically the deposit is refunded to that buyer. The seller in that scenario might then look at other options (they could possibly approach the second-best tenderer to see if they’re still interested, or re-list the property).
- Settlement: Once the contract is unconditional (either immediately if the tender accepted was unconditional, or after conditions are met), both parties proceed to settlement day as outlined in the agreement. On settlement day, the buyer pays the remainder of the purchase price (usually via their lawyer to the seller’s lawyer) and in exchange, the property’s title is transferred to the buyer’s name. The buyer gets the keys and takes possession of the property (unless a different possession arrangement was agreed). The tender process concludes with the successful sale and transfer of ownership.
- Aftermath: All along, because this was a tender, the details remain private. The sale price might later become evident in public records (like QV or council records), but there’s no immediate public disclosure from the tender process itself. The agent might say “sold by tender” in their reports, possibly indicating strong interest or number of offers, but typically not the price.
Professional Support and Problem Resolution
If issues arise during the tender process, several avenues are available:- Direct resolution: Attempt to resolve issues directly with the real estate professional or agency management
- In-house procedures: Use the real estate agency’s internal complaint procedures
- Real Estate Authority (REA): Access the independent government agency’s complaints process if necessary
- Legal support: Consult with your lawyer throughout the process for guidance and support
- Independent resources: Visit settled.govt.nz for comprehensive information and guidance
Conclusion
The tender process offers a structured, private method for property transactions that can benefit both buyers and sellers when handled correctly. Success hinges on thorough preparation, including property research, financial planning, and careful review of legally binding tender documents. Seeking professional advice, particularly from a lawyer, at key stages is crucial for understanding the process, your obligations, and navigating potential complexities.Whether you’re buying or selling, a tender provides a fair, transparent process that balances the interests of all parties while maintaining the privacy and confidentiality that many property transactions require.Contact Darren Ryder
Let's Navigate the Market Together! Start with a Free Appraisal or Ask Me Anything. Fill out the Form and I'll Rescue You from Real Estate Confusion!
Get Your FREE Market Appraisal Today!
Ready to sell?
Start with a no obligation appraisal
Northwest & Beyond: Top-Tier Real Estate
Services at Your Doorstep
Ready to Sell Your Northwest Home? Let's Get Started!
Get Started
Get an Accurate Appraisal and Sell with Confidence
Get Started
Get an Accurate Appraisal and Sell with Confidence
Get Started
Get an Accurate Appraisal and Sell with Confidence
Get Started
Get an Accurate Appraisal and Sell with Confidence
Darren Ryder | Barfoot & Thompson Kumeu | Real Estate Agents
SELL WITH RYDER: THE NO-BS APPROACH TO NORTHWEST AUCKLAND REAL ESTATEYour Kumeu based real estate agent who doesn't speak corporate bullshit. With 13+ years in the trenches of Northwest Auckland's property market, I'll tell you what your house is actually worth.. not what some algorithm hallucinated or what your neighbor's cousin thinks they might get on a good day.I specialise in helping people buy and sell in Kumeu, Huapai, Waimauku, Helensville, Riverhead, Kaukapakapa and the wider Northwest West & Hibiscus regions without the usual real estate fairytales. When you need straight answers about luxury, lifestyle & residential properties, I've got your back.WHAT MAKES ME DIFFERENT FROM THE OTHER 137 AGENTS IN THE AREA? I'll give you market valuations based on actual sales data, wild concept, I know! No sugar coating, no fantasy pricing, just reality. My FREE property appraisals are comprehensive without the jargon. While other agents are busy telling you that barely-standing shack has "rustic charm and potential," I'll be giving you the true market outlook and a realistic sales strategy.Want to experience what working with a real human (not a corporate drone) is like? Call me at 021 307 014 for a free consultation. Let's create a selling plan that maximises your property's value without the usual real estate BS.SELL WITH RYDER .. Helping Northwest Auckland homeowners navigate the market without the fluff since 2012.. since when milk was still in bottles.
130 Main Highway Kumeu, Auckland 0810, NZ
Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday00:00 – 23:59
Darren Ryder | Barfoot & Thompson | Real Estate Agents
Table Of Contents
