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Buying A House By Tender

When a property is for sale by tender, buyers give confidential written offers to the agent before a specified end date.

Register your interest

It’s important to register your interest with the agent if you intend to make an offer so they can let you know if another offer is received before the end date.

Your offer must be in writing on a tender document, which is a type of sale and purchase agreement. You can request the tender document from the agent. The tender document is a legally binding contract.

We recommend you ask your lawyer to review the tender document and make sure you understand all the terms of the sale before you sign it.

Making your offer

If the property is advertised as ‘for sale by tender (unless sold prior)’, you can make an offer at any time before the tender deadline. The seller can accept an offer at any time. They don’t have to wait for the end date.

Decide what kind of offer to make

You can choose to make either an unconditional or conditional offer on the property.

An unconditional offer means that you have no conditions on the price you offer. Unconditional offers are generally favoured by the seller, especially if there are competing offers.

A conditional offer means you have conditions that you want met before you agree to complete the purchase of the property. Conditions could include getting a building inspection or valuation, confirming your financial arrangements or selling your own property.

The seller can also attach conditions to the sale such as stating the settlement date or listing the details of the chattels (for example, stove, fixed floor coverings, blinds, curtains and light fittings) that come with the house.

Unconditional Offer  Conditional Offer

The seller considers the offers

The agent collects all the offers and presents them to the seller. The seller has up to 5 working days to decide which offer, if any, they will accept.

Be careful not to submit any offers for other properties until you’ve heard back from the agent or you might end up with agreements to buy two properties. If there is more than one offer before the tender end date, the sale may turn into a multi-offer process.

The multi-offer process

The seller doesn’t have to accept any of the offers. If your tender isn’t accepted, you don’t have to continue with the sale process, and you’re free to look at other properties.

Negotiating with the seller

The seller may ask you to change the price and/or conditions in your tender offer. If this happens, the agent will ask you and the seller to initial any changes (amendments) to show you both agree with them. Read any changes first, and make sure you understand and agree with them before initialling the changes.

You don’t have to accept any changes you do not agree with. Your lawyer can advise you during this process and should check the final agreement before you sign it.

The seller may also simply accept your offer without asking for any changes. The seller will sign the agreement for sale and purchase, and you transfer the deposit funds.

Completing the process

If you have added conditions to the tender offer such as arranging finance or getting the property checked by an expert, you will have to complete these before a date agreed with the seller (and set out in the sale and purchase agreement). It’s a good idea to get things moving as quickly as possible because the vendor may be entitled to cancel the agreement or you may be deemed to have not satisfied the conditions if you don't meet the conditions by the due date.

When all the conditions have been met, the sale becomes unconditional.

If you need an extension to complete any conditions, you must speak to your lawyer who will negotiate with the seller through their lawyer. Any changes will need to be added to the sale and purchase agreement and signed off by you and the seller.

What happens at settlement?