Selling by subscription on a home: How does it work and what should you pay attention to?

Sale by tender, also known as a deadline sale, is a method in which interested buyers make a one-time offer on a property before a predetermined deadline. Unlike traditional negotiations, where bids go back and forth, this method offers a structured and transparent way to sell, especially in a tight housing market.

Why Do Sellers Choose This Method?

Sellers often choose to sell by tender for several reasons:

• Create competition: Setting a deadline encourages buyers to submit their highest bid immediately.

• Efficiency: The process is faster and avoids lengthy negotiations.

• Transparency: All bids are reviewed simultaneously, promoting fairness.

• Maximum yield: In an overheated market, this method can lead to higher sales prices.

How Does Sales by Subscription Work?

1. Viewings: Interested parties are given the opportunity to view the property within a specified period of time.

2. Disclosure: Buyers will receive all relevant documents, such as the title deed and any architectural reports.

3. Bid Form: Buyers fill out a form with their bid, any dissolving conditions and desired completion date.

4. Deadline: All bids must be submitted by a specific date and time.

5. Review: The seller reviews bids based on price, terms and other factors.

6. Allocation: The property will be allocated to the buyer with the most attractive offer.

Differences from Traditional Negotiations

In traditional negotiations, there is room for counterbids and conversations between buyer and seller. Sale by tender eliminates these intermediate steps, making the process faster and often less emotionally taxing for the seller.

What Should You Know as a Buyer at Sale by Tender?

Preparing Your Bid

• Financial check: Make sure you know the maximum amount you can borrow and consider a mortgage statement in advance.

• Final conditions: Determine if you want to include conditions, such as conditional financing or structural inspection.

• Completion date: Be flexible with the desired completion date to be more attractive to the seller.

Standing Out with Your Bid

• Personal letter: Include a cover letter explaining why you would like to buy the property.

• Offer certainty: An offer without resolutive conditions may be more attractive, but it also carries risks.

• Market-based bidding: Do research on comparable homes to make a realistic offer.

What Should You Look Out For When Bidding on Tender?

Terms and Financing

• Reservation of financing: This offers you protection as a buyer, but may be less attractive to the seller.

• Building inspection: Consider having an inspection done in advance to make your offer without reservation.

Not Only the Highest Bid Counts

• Dissolving conditions: Fewer conditions can make your bid more attractive.

• Delivery date flexibility: A delivery date that suits the seller’s needs can be decisive.

Advantages and Disadvantages of Selling by Subscription

For Buyers

Advantages:

• Equal opportunity for all bidders.

• Speed in the buying process.

Disadvantages:

• No possibility of negotiation.

• Uncertainty about competition and bids from others.

For Vendors

Advantages:

• Possibility of higher selling price.

• Efficient and structured process.

Disadvantages:

• Less personal contact with buyers.

• Possible disappointment with low bids.

Transparency in Sale by Tender

Although the process is intended to be transparent, it is important to note that sellers are not required to disclose bids. This can lead to uncertainty for buyers. It is advisable to seek clarity in advance about the process and what to expect after submitting your bid.

How Can You Increase Your Chances of Success?

• Be well prepared: Have a solid financial foundation and know your maximum budget.

• Work with a buying agent: A professional can advise and guide you through the process.

• Be flexible: Adaptability in completion date and conditions can make your bid more attractive.

• Write a personal letter: Let the seller know why you are the ideal buyer.

Examples from Practice

Example 1: Jan and Petra offered €10,000 above the asking price without resolutive conditions and were awarded the house.

Example 2: Lisa bid the highest amount, but with several resolutive conditions. The seller ultimately chose a lower bid with no conditions.

How Do Sales on Subscription Differ by Broker or Region?

In urban areas such as Amsterdam, sale by tender is more common because of high demand. In rural areas, this method is less common. In addition, real estate agents may differ in their approach, such as the way they communicate and their deadlines. It is important to inform yourself well about the specific procedures in your area.

What To Do If Your Bid Is Rejected?

• Ask for feedback: Understand why your bid was not accepted to improve your strategy.

• Keep searching actively: Don’t get discouraged and keep viewing other homes.

• Evaluate your approach: Consider adjustments to your bidding strategy or terms.

Tips for Selling via Enrollment (For Sellers)

• Choose the right time: Market your property when demand is high.

• Work with an experienced real estate agent: A professional can guide and advise you.

• Be clear: Communicate clearly about procedure, deadlines and expectations.

• Consider all factors: Look not only at the price, but also at the buyer’s terms and security.

When is Selling on Subscription Not a Good Choice?

• Low demand: In a quiet market, this method may not be as effective.

• Specific homes: Unique or expensive homes may benefit from a traditional sales method.

• Limited time: If you need to sell quickly, another method may be more appropriate.

Importance of Good Guidance for Sale by Tender

Both buyers and sellers benefit from professional guidance. A real estate agent can help navigate the process, establish a strategy and make informed decisions. Good communication and expertise are essential to a successful tender sale.

Conclusion

Selling by tender is an effective method in a competitive housing market, but requires careful preparation and strategy from both buyers and sellers. By being knowledgeable and working with professionals, you can significantly increase your chances of a successful transaction.

Frequently Asked Questions (FAQs)

1. What happens if no one submits a bid when selling by tender?

The seller may decide to re-market the home or switch to a traditional selling method.

2. Can I adjust my bid after submitting at sale by tender?

No, once submitted, bids are binding and cannot be changed.

3. How do I know if my bid is attractive enough for the seller?

You can’t know for sure, but a market-based offer with no resolutive conditions and a flexible completion date is often attractive.

4. What happens if two bidders make the exact same bid?

The seller decides based on additional factors such as terms, completion date and personal preference.

5. Can a seller still negotiate with other bidders after bidding?

In principle, it is not customary, but the seller is free to do so as long as a purchase agreement has not yet been signed.