How does selling a house by tender work?

What does “by tender” mean?

The Real Estate Authority describes tender as a process where buyers submit confidential written offers to the agency before a specified deadline. Those offers are opened together after the deadline, unless the tender terms say otherwise.

The tender document sets the rules. It should say whether you can consider an early offer, extend the deadline or sell before closing. If a sale before the deadline is possible, the marketing commonly says “unless sold prior”. Ask your lawyer to review the document before the campaign begins.

Tender can be useful when a Tauranga home is hard to price because it is unusual, or when you want the market to respond without publishing an asking price. It is one option, not a shortcut to a premium result. Compare it with the other decisions in the Tauranga selling process before choosing your method of sale.

What goes into a tender offer?

A buyer can propose a price, deposit, settlement date, included chattels and conditions such as finance, valuation, a building inspection or the sale of another property. Settled confirms that tender offers can be conditional and explains that a submitted tender is a legal offer.

You do not generally have to accept the highest tender, or any tender. Settled’s guide to methods of sale notes that the seller may negotiate with a buyer after tenders are opened. The precise choices available to you still depend on your tender document.

What happens from launch to decision?

1. Agree the tender rules. Have the lawyer review the document, deadline, prior-offer position and seller terms.
2. Launch the campaign. Buyers receive marketing, property information and the tender document.
3. Manage enquiries. The agent records interest, answers questions and helps buyers understand the submission process without revealing another buyer's tender.
4. Receive offers securely. Offers are kept under the process stated in the document.
5. Open and check tenders. Confirm signatures, deposit and required information.
6. Compare the complete offers. Review price, conditions, deposit, settlement, chattels and execution risk with the agent and lawyer.
7. Decide. Accept, reject or negotiate as the document allows.

Set the rules before marketing starts

• Decide whether you will consider offers before closing.
• Record whether the deadline can change and who must be told.
• Choose your preferred deposit and settlement date.
• Confirm which chattels are included or excluded.
• Prepare the property records buyers will receive.
• Agree who will be present when tenders are opened.

Ask the agent how they will update interested buyers if anything changes. The same process should be communicated clearly to everyone.

Compare certainty as well as price

A higher price can come with a long finance condition, a small deposit or a settlement date that does not work for your next move. Place each offer's price, conditions, deposit, settlement date, requested work and chattels side by side. Our offer comparison worksheet is designed for that first pass.

Then talk through the trade-offs with your agent and lawyer. If the agent's explanation of tender has been vague, use the agent comparison guide to test their proposed campaign before signing the agency agreement.

What can go wrong?

The campaign may close without an acceptable offer. A buyer may also misunderstand an early-offer clause or a changed deadline if communication is poor. The most avoidable mistake is treating the largest number as the best result without checking how likely that offer is to settle.

Keep the paper trail tidy, insist on clear updates during the campaign and get legal advice before accepting or countering. Tender creates a defined decision point, but the quality of that decision still depends on the information in front of you.