When the property market is hot, most real estate agents will push vendors down the path of either putting their property up for sale as a standard listing, or if they think they can get a good price, they will suggest you look into doing an auction.
So when I recently witnessed someone selling their house via a tender process, it piqued my curiosity. Not only had I never seen it done before, but it seemed to work amazingly well for the property owner.
The idea behind doing a property tender is that the property is put up for sale (just like any other normal listing) and then potential buyers are made to wait until open day to take a look at the property (no early viewings). The idea behind this is that you have a maximum number of people turning up at the same time, so it makes people very aware that they are not alone when it comes to being interested in the house for sale.
Before leaving the open house people who are interested in buying the property must submit their best offer, in writing, to the real estate agent in a sealed envelope. The main difference between this and an auction is that everyone is putting in their maximum price, and you don’t need to pay for an auctioneer. It’s really quite an ingenious way to sell a property.
Does it work though?
Well the property that I saw ended up with an astounding 28 offers, with the top offer coming in $35,000 over what the vendor was actually wanting. It should be noted though, that this was a particularly hot market, where most properties were being sold in under 1 week. I suspect the tender method would fail spectacularly in a poor property market.
So if you are in a hot market, consider asking your agent about doing a tender house sale instead of a traditional one, or an auction. You might find the results to be very much to your liking.
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