Bidding in a property tender can feel like a high-stakes game, but it doesn’t have to be overwhelming. Winning isn’t always about throwing the highest bid; it’s about being smart and prepared. Let’s break down our top 9 straightforward, easy to implement strategies that can boost your chances in the competitive world of property tenders.
But first things first, what exactly is a tender?
When a property is for sale by tender, buyers give confidential written offers to the agent before a specified end date. Some important things to know about tenders are:
- As all offers are confidential, you’ll have no idea what other prospective buyers are bidding for the property
- You’ll register your interest with the agent, not the seller. You can ask to be informed if someone else makes an offer before the deadline
- The seller may or may not give an indication as to how much they want for it
- You can attach conditions to this offer, i.e. making the property subject to building reports and LIM reports
- A deposit is usually provided with your offer. Ensure you check the settlement date and make sure you have all your finances sorted, as if the offer is accepted, the remainder of the purchase price will be due on the settlement date
- Look at the Property from the Vendor’s Point of View
Price is usually the most important thing to a buyer, but it’s not the only factor to take into consideration; the conditions in the tender and the settlement date can be really important to the vendor also. “If you can give the vendor their settlement date and have less conditions in you offer/make your offer unconditional, then you’ve got more chance of winning the tender.” (Jeff Elias, Futurebound Founder)
TOP TIP FROM JEFF
“If you’re a first home buyer, I encourage you to make one or two lowball offers (on a house that you like just in case you happen to succeed) to demystify the process and learn from it. It’s free to out in an offer and this will give you great practice so that you can be better prepared on your second and third go.”
2. Don’t Let the ”Competition” Scare You Off at the Open Home
If you go to an open home with 20 or so other people there, remember that most of them will NOT put forward an offer. Many of them will just be browsing, are prospective buyers who haven’t gotten their finances together yet, or are neighbours wanting to take a cheeky peek. There only end up being a handful i.e. 1,2 or 3 of people who actually put forward an offer.
3. Do Your Homework – Where is the market currently?
Before jumping into the fray, take the time to understand the local real estate scene. What are houses selling for? What’s the demand like? Get your hands on some recent sales data and feel out the trends. This isn’t just about setting a fair price—it’s about knowing what you’re walking into. Remember that what you think a house is worth is irrelevant, it’s what the market thinks the house is worth.
4. Talk to a Mortgage Broker
Make sure your financial ducks are in a row. Sellers want buyers who can move quickly and smoothly i.e. already have pre-approval
- Show You’re Serious: Have your bank deposit ready to go and try to keep your conditional timeframes short (while still ensuring everything gets ticked off)
- Secure Financing: If you need a loan, get pre-approved first. This shows sellers you mean business and the funds are ready. If you’d like to learn more about pre-approval, download our How To Get Your First Mortgage Guide
5. Make a Strong Offer
Think beyond just the amount of money you’re offering. Show why you’re the best choice for this property and don’t skimp on the price – if you can afford that extra $10k, put it down, as it will most likely be your only chance.
- Add a Personal Touch: Write a letter explaining how much you love the home, why you want this property, and how you plan to use it. It could make your bid stand out.
- Look Professional: Organize your bid neatly and double-check for mistakes. A good first impression matters.
6. Write Down an Exact Number in your Offer Amount
If you are thinking a round number such as $720,000, then chances are, so are your competition. Offer something uneven like $721,800. This could be the difference between winning and losing and shows you have squeezed out every last single dollar or have budgeted for that exact amount showing your seriousness when placing your offer.
7. Understand the Tender Documents
Tender documents can be packed with jargon and requirements. Don’t let that intimidate you.
- Read Thoroughly: Make sure you know exactly what’s expected of you. Missing a small detail can mean missing out on the deal.
- Ask for Help: If the paperwork is too much, it’s okay to bring in a professional, like a lawyer or a real estate expert to help.
8. Keep the Communication Open
After your bid is in, don’t just sit back and wait. Keep in touch with the seller or agent to show you’re keen and ready to seal the deal.
- Respond Quickly: If the seller reaches out with questions, answer them right away.
- Stay Available: Make it easy for them to get in touch with you for any last-minute details or questions.
9. Become Besties with the Real Estate Agent
Let them know your story. Try to get as much information from the agent as possible on their opinion on the property’s value and seller’s position e.g. has the seller bought elsewhere and needs to sell, are they moving overseas and are under time pressures etc. As this could give you the edge you need when submitting your offer. “They also may divulge whether anyone else is putting in a bid – this will let you know whether your bid needs to be more competitive or whether you can be a bit cheeky with the price as you’re the only bidder.” (Jeff Elias, Futurebound Founder)
Winning a property tender comes down to being well-prepared, understanding the process, and presenting yourself as the best buyer. By doing your homework, getting your finances sorted, making a thoughtful offer, and keeping in touch, you’ll not only increase your chances of winning but also come across as a reliable and serious buyer. Remember, every bid is a learning opportunity, so take any feedback you get and use it to improve your next attempt.
If you’re needing some help with gaining pre-approval for your first or next home purchase, get in touch with us and we’ll help you put your best foot forward with the bank.
