What does Deadline Sale or Deadline Private Treaty Mean in Real Estate?

17 October, 2023 | Jonelle Lee

A deadline sale, also known as a deadline private treaty, is when a property is being advertised for sale without a price attached to it, and asking buyers to submit offers to the vendor by a set deadline/date. The vendor can then choose which offer they would like to accept; the vendor does not have to accept any offer if they choose not to. The main intention of a deadline private treaty is to boost confidential unconditional offers but offers can be conditional. The process is similar to a silent auction, where no one knows how much the other parties have offered.

 

How does a deadline sale differ from a tender?

Offers can be made at any time for a deadline sale, this does not have to be stated in the documents (i.e., the Agreement for Sale & Purchase) but should be included in the marketing. Whereas with a tender, offers can only be accepted prior to the date the tender finishes if this is explicitly stated in the tender documents.

Offers are made using the standard Agreement for Sale and Purchase which is also used for Sale by Negotiation. With a tender specific Tender Documents are used to make the offer.

With a Deadline Sale, the potential purchaser can put their requested settlement date and deposit amount into the offer, whereas with a tender the settlement date and deposit amount are decided by the vendor and stated in the tender documents.

In an auction, buyers must be unconditional, however in a deadline private treaty sale the vendor has the option of conditional and unconditional offers. This gives the vendor the option of taking a potentially lower offer but one that is unconditional, which would result in a quicker sale. It is important as a buyer you are proactive about showing your interest to the vendor and putting your offer in early as the vendor can accept an offer at any time throughout this process. The vendor has no obligation to contact the interested offerees if they decide to accept an offer before the deadline.

 

Can the property be sold before the deadline?

Yes, the property can be sold before the deadline. With deadline sales, properties are often marketed as Deadline Sale, “unless sold prior”. Potential purchasers can choose to put in an offer before the deadline. It is up the vendor whether they accept that offer or wait until the deadline to consider other offers.

The deadline can also be extended by vendor if they choose to do so.

It is a good idea to register with the agent and ask them to let you know if anyone else make an offer so that you have the opportunity to also make an early offer, if you want to.

 

Can the offer be conditional/have conditions attached to it?

Yes, Deadline Sales use the standard Agreement for Sale and Purchase, so any offer can be conditional.

 

Do I need to get legal advice before I make an offer on a Deadline Sale?

We recommend anyone who is purchasing property have their lawyer review any contract before you sign it. However, if you have been over a few agreements for Sale and Purchase, and have received advice from your lawyer on what to check for and how to ensure it protects you, then you may be able to make an offer without seeking advice first.

This is different to a Tender where we highly recommend you seek legal assistance with making your tender offer.

 

How do I make an offer for a deadline sale?

You can make an offer simply by filling in a standard Agreement for Sale and Purchase with the real estate agent. All written offers are required to be presented to the vendor. But if made early, the vendor can choose to view the offer straight away, or wait until other offers come in.

The vendor can accept the offer, enter into negotiations or decline all offers. There is no requirement for the vendor to accept any offer.

 

Are you looking to buy or sell residential property? Property Law expert, Jonelle Lee is here to be your friendly, expert guide through the process. Protect your investment, get the right advice – Contact Jonelle today!

Jonelle Lee
jonelle.lee@smithpartners.co.nz
09 837 6838