A method of sale growing in popularity among Selling Agents is forcing buyers to increase their level of research at the risk of missing out on property, or paying over the odds.


‘Sale by Tender’ isolates buyers from the competition and can make it more difficult to gauge interest from other buyers.

The process involves buyers submitting an offer to the Selling Agent in a closed envelope. The agent then presents all ‘tenders’ to the seller on the prescribed ‘tender closing date’.

The agent reviews the offers with the vendor, and whichever buyer submits the most superior terms and conditions will secure the property.

Unlike a more conventional auction where bidders compete directly against each other, Sale by Tender leaves buyers completely in the dark. None of the buyers knows what offer the other has presented.

Sale by Tender makes it harder for buyers to gauge the competition

The tender process is becoming more prevalent in Queensland, according to NPB Queensland State Manager, Steve McGee.

Agents prefer this option as it often yields a better outcome for their vendor. Being isolated from the competition means purchasers are not able to gauge the interest on the property; they might be well off the pace, or they might be ahead of the pack.

As a result, buyers have to put their very best offer in to give themselves the best chance of making a purchase. If they don’t, they risk missing out. Subsequently, emotion can begin to play a bigger part in the offer, and buyers can run the risk of paying far above the competition and far above what the property is worth.

For example, the winning tender may be tens of thousands over the next highest tender. The buyer has unnecessarily spent far over the competition, when an auction bid of only a couple of thousand dollars may have been enough to secure the property.

So how do buyers secure the property in this scenario without paying over the odds?

The process overwhelmingly puts the onus on the buyer, and they need to go the extra mile when it comes to researching the property to ascertain its value.

Buyers will need to drill down further in their research, and seeking expert advice is even more vital, according to Steve McGee.

“Buyers absolutely need to know as much about the property in every sales process. However, when the competitions level of interest is unknown, buyers are relying almost solely on the quality and accuracy of the properties sold in area to calculate their offer.”

“Working that out can be a difficult and time consuming process, and that’s when engaging a property professional is vital.”

Common methods of comparing recent sales don’t go far enough in this instance, according to Steve.

Buyer’s need to increase their research if the quality of the property is the only thing they can base their offer on

“Real estate websites that offer an estimated value range really don’t go far enough in terms of detail. The range disparity in estimated values is simply too large to get an accurate assessment.

For example, they often don’t take into account the orientation of the block, the street-scape, whether the land is flat, or if the property has been modernized”

Conducting an even deeper level of research including speaking to professionals is needed to assess the property’s worth to form the basis of the bidder’s offer.

Attending open house inspections becomes crucial to better understand the competition. The number of interested parties, especially number of repeat parties should be monitored to estimate the level of interest.

If there are a number of parties who repeatedly attend inspections, buyers know they will likely have to up their offer to beat out the competition.

“These situations can put the buyer under a lot of pressure; they’re required to do more work” said Steve.

“I’ve even overheard buyers asking other buyers what they think a property is worth, just to get an idea.”

“That’s when engaging an advocate becomes incredibly important. Not only do they provide the expertise, but they save the buyer so much time.”

Buyers should also be wary of agents who request an increase in the offer price after the tender process has closed.

“This is a clear sign the buyer submitted the superior tender, but the seller wants more than any of the buyers presented. They aren’t ‘in tune’ with what the market wants.”

Not knowing the interest of other buyers takes away a key influence in determining the value of an offer. To get around this, buyers must conduct as much research as possible to estimate the property’s value. The best way of doing that is to speak to an expert.