Sale by Tender. These are three words which have caused a great deal of controversy in the real estate world, with many debating the pros and cons of this fairly new concept. Here we break down the term Sale by Tender and explain why, at Waltham Estates, we choose not to offer such a service.
What is a Sale by Tender?
A Sale by Tender refers to a situation whereby a property is put up for sale, but anyone wishing to make an offer on a said property can only submit one bid. There is no guide price which buyers can use to formulate their offer, nor are buyers allowed to know any details about bids made by other potential buyers. Any party wishing to bid on the property must do so by a certain date.
Why we don’t do sales by tender
Before the Sale by Tender concept made its way into the world of real estate, agencies would only take a seller fee from the party selling the property – normally around 1.8% of the sale price. The seller’s fee covers valuation, listing, viewings etc. With the introduction of Sale by Tender, however, this situation has begun to change.
At Waltham Estates, our status as the best-reviewed letting/estate agency in Walthamstow has been earned thanks to our transparency and our promise to always act in the interests of our clients, which is why we have chosen to stay off the Sale by Tender bandwagon. You can find out more about how we offer the best property selling service around.
Below is a more detailed look at why we’re sticking to our guns and choosing not to offer a Sale by Tender service:
Both parties are charged a fee
We think it’s a tough enough world for someone buying a new house. They are already having to pay their estate agent around 1.8% of the sale price of their home. Under the rules of Sale by Tender, these new buyers would also have to pay an introduction fee to a second estate agent if they submitted a successful bid for a Sale by a Tender property.
Simply put, if we were to offer such a service, it would mean not only charging the seller of the property a fee but also charging the buyer an introduction fee of between 2% and 2.5%, in addition to the VAT. We just don’t think this is in the interests of our customers.
Unfair advantage is given to the seller
As shown above, when buying a house through Sale by Tender, a purchaser must pay a fee, but that purchaser must also agree to make only one offer on the property. This offer cannot be used as a starting point for negotiations, as potential buyers are not allowed to negotiate with the seller.
In stark contrast, if the party selling the property wishes to negotiate, then under the rules of Sale by Tender, they can do so.
Buyers may end up paying more
At Waltham Estates, we believe in being fair to both parties, but this would not be an easy thing to do if we were to sell properties using the Sale by the Tender approach. Because there is no listed price for a property being sold at a Sale by Tender auction, there is a risk that buyers will make an offer which is far higher than the price being paid for similar properties in the same kind of area.
The final word
The Waltham Estates way has always been fairness first, and while many estate agents embrace Sale by Tender, we have chosen not to. All of the decisions we take and all of the services we provide are aimed at delivering excellence for every single one of our customers.