A tender is essentially a type of closed, silent auction. When selling a home by tender, the seller will accept tenders from prospective buyers and consider these various offers at a pre-specified date. The offers are presented in sealed envelopes, which are kept secret from other buyers. This means that prospective buyers will remain unaware of what prices competitors are submitting. Before this process begins, the home is first marketed to prospective buyers at inspections. Interested parties can attend these inspections before submitting a written tender by the specified due date. Sellers are not allowed to accept any offer before the pre-specified deadline has been reached.
After the closing date, the seller and their real estate agent will go through all of the submitted tenders. With their agent’s advice, the seller can choose the tender that’s most favourable – depending on the price offered as well as the terms and conditions. There’s no obligation to choose one of the tenders that has been submitted. If none of them are found to be acceptable, the real estate agent can go back to the potential buyers to see if any of them will be willing to change their conditions or offer a higher price.