Sale of residential property by tender
  • 15 Nov 2022
  • 4 min read
  • By Emily Holzberger, Solicitor, Carter Newell Lawyers

Sale of residential property by tenderand the risks for agents

Sale by Tender , Agent Advice

Whilst sale by tender may once have been a method of sale for only unique, large or commercial properties, it is becoming an increasingly popular method of sale for residential properties in Queensland.

In this article, we will examine some of the risks associated with the sale of residential property by tender, and some best practice tips to mitigate the risk.

As sales agents will be aware, there are three common ways of marketing and selling residential properties in Queensland:

  1. Private treaty;
  2. Auction; and
  3. Sale by tender.
Sale by tender usually involves a short, but extensive marketing campaign, and requires potential buyers to submit a written tender for the purchase of the property to a pre-determined location (possibly the sales agent, or the seller’s solicitor), by a certain date and time, and in a certain form.

Sale by tender, sometimes referred to as a ‘silent auction’, allows for potential buyers to provide their best offer for the seller to consider after the tender process comes to a close.

Risks and best practice tips for agents

Tender vs. Auction

As with all methods of sale, there are potential risks when marketing a property for sale by tender.

Particularly, it will be important that sales agents ensure that their seller clients are well aware of the terms of the sale by tender process.

For instance, it should be made clear to sellers of residential property that sale by tender is not the equivalent of an auction without an auctioneer. Cooling off periods are still required on contracts of sale by tender pursuant to section 165 of the Property Occupations Act 2014 (Qld).

Further, buyers may submit their tender with terms of their choice, which can be accepted or negotiated by the seller once the tender process comes to a close.

In circumstances where sale by tender is often pursued to achieve a quick sale, additional terms or extended finance/building and due diligence periods may not be acceptable to the sellers.

Sales agents should also recommend that their seller clients seek legal advice as to the terms or offers submitted by tender once they are received.

Tender Form

Sales agents should ensure that their seller clients obtains legal advice in relation to tender forms to be provided to interested buyers.

The tender form prepared by the seller’s solicitors should be initialled and annexed to the Form 6 or Form 6A appointment in order to ensure that the Tender Form provided to potential buyers is agreed by the parties prior to the marketing campaign.

Offer to tender

Sales agents should take extreme care when advertising the property for sale by tender, particularly when providing details of the time, form, location and circumstances of the tender process.

It is important for agents not to bind their seller clients to the highest bidder. Language used in the marketing material should merely invite offers, rather than confirming what actions the seller will take in response to the tenders. For instance, language such as “Sale by tender to the highest bidder” may amount to an offer, capable of being accepted by the person who submits the highest bid[1].

Marketing costs

Some sellers might opt for a sale by tender process in order to achieve a quick sale. In the circumstances, a succinct and usually heightened marketing campaign will be required.

However, it would be best practice for sales agents to ensure that their marketing costs are paid up front prior to the marketing of the property, in order to prevent any risk of losing marketing costs if the tender process is not successful.


As with all methods of sale, agents should ensure that their seller clients are well aware of the risks, terms, benefits and process of a sale by tender.

Agents should also encourage their seller clients to seek legal advice as to the tender forms to be provided to potential buyers and the offers received by tender.

[1] Spencer v Harding (1870) LR 5 CP 561.

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