Selling by Tender?
Over the years, at Clarke Gammon, we’ve seen most extremes of the cyclical ebb and flow of the Surrey and Hampshire property market.
Over the past 18 months or so, both the national and local property markets have experienced incredibly strong buyer demand, which has as a consequence, created a super-heated sellers’ market, pushing property values up by an average of over 10% on the year.
For new properties coming on to the market, we are consistently seeing more than 20, and sometimes as many as 60 viewing appointments for certain types of property. This is then often followed by the owner receiving multiple offers from highly motivated buyers desperate to secure their dream home.
Selling by Tender
With such strong buyer demand, pressure on the property owner can be overwhelming, certainly for the more desirable property or where a property requires renovation or offers development potential. Even in normal market conditions, these types of properties would stimulate considerable interest, in the current super-heated market, buyer interest can be off the scale.
For owners with a property likely to generate interest at these levels, considering a sale by tender is an attractive option. As the property is marketed for a prescribed amount of time, all interested parties are required to submit their best and final offer by sealed bid, before a fixed end date.
We are also, perhaps more frequently, asked by executors of deceased estates or charities that have been left a property to arrange for these properties to be sold by tender. This is common as these owners are required to ensure that the best price is achieved.
How the Selling by Tender process works?
Whether you are a normal seller with a particularly saleable property, an executor of a deceased estate or a charity that needs to dispose of a property, selling by tender is an option anyone can consider.
The property should however, ideally be one that is either difficult to value, due to its state of repair or position or development potential, we would advise the property owner accordingly in any event.
The process –
1). Price – We would firstly agree the price we believe the property would likely achieve, but set a guide price for marketing purposes. (agreed with the owner before marketing commences).
2). Time – Agree on a time period the property should be marketed for, this would be long enough to get good market exposure but not too long as to put buyers off of waiting for an extended period.
3). Bids – Agree on the method by which offers should be received, generally speaking by posted sealed bids.
4). End date – Set an end date for all offers to be received.
5). Marketing – Commence marketing, this is done conventionally, as we would with other types of sale – email to buyers on our mailing list – Advertise – Internet etc
6). Viewing – Agree how viewing appointments would be handled, this is generally by offering either more flexible view slots during the week and at the weekend or by more formal open house appointments once or twice a week.
7). Accepting the best offer – On the agreed end date, all sealed bids are opened by either our or our client’s lawyer and the best offer is presented to the owner.
Note – It is not necessarily the highest price offer that is ultimately accepted, although that is mostly the case, but the offer would need to be verified as being able to proceed and most likely to result in a sale being achieved. This would be agreed between the client, the lawyer and ourselves. In any event, complete transparency is essential and all bids are notified of the owners decision.
Conditions of sale – We often confirm the owners requirements for the conditions of sale, i.e. the owners may require that only offers from buyers able to proceed immediately will be considered, so if the buyer has a dependent property to sell, their offer would not be considered.
It also may be a condition of sale that exchange of contract are required by a specific date, should the offer be accepted. These or any other conditions that would affect the bidding process would always be fully disclosed to all interested parties, before viewing the property.
Recently sold by Tender
Below are some recent examples of properties that either currently or have already been sold by tender.
Haslemere – On the market at £1,250,000 – 23 viewing appointments, 8 offers, SOLD in excess of guide price
Click here for more details
Liphook – On the market at £900,00 – 46 viewing appointments, 12 offers, SOLD stc at in excess of the asking price
Guildford – On the market at £1,250,000 – 30 viewing appointments, 10 offers, Sold substantially in excess of the guide price
Click here for more details
If you are thinking of selling, and have a property you believe would be suited to selling by tender, please give me a call at our Liphook office and I’ll be happy to help.
Steve Cook
Partner Clarke Gammon
