Inner west home sells prior to auction in closed blind tender

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A THREE-bedroom home in Haberfield has sold for more than $2.1 million in a closed blind tender involving secret sealed envelopes.

The period family home, built in the 1920s, was intended to go to auction but after two buyers became so fiercely competitive trying to purchase the property prior to auction, selling agent Michael Tringali from McGrath Leichhardt said the vendor just wanted to draw a line in the sand and exchange an actual contract.

When you want to secure a property before auction, the idea is to place an offer prior to auction. So when somebody wants the property, they are obviously going to bid harder than the next person, and then they will have to up the anti, and so on, Mr Tringali told news.com.au.

What will happen there is you will end up in a scenario where you have two people bidding against each other, or placing offers, in order to secure a property prior to auction.

But where it can get a little bit stressful for a vendor is: you have an offer, not a contract. So if that purchaser changes their mind or wants to pull out, you dont have any certainty around an offer until it is a contract.

The vendor then set a minimum price and Mr Tringali told the two opposing parties they had until close of business day the following day to submit their best offer on a signed contract and in a sealed envelope, as if they were ready to exchange contracts and whoever had offered the most would get the property.

By eliminating those [counter] offers and saying just give us your best offer ... [the buyer has] given it their best shot and the vendor gets the best result, Mr Tringali said.

We [the real estate agency] also didnt want to be seen as showing favouritism to anybody so the contracts were put in a sealed envelope so we dont know what [the purchase price] was.

Provided it is over the minimum price the vendor set, then we dont have a scenario where any price is influenced by us or the other party ... You have always got to try and protect the vendors interests and you have got to also act fairly with both buyers.

According to Mr Tringali, the vendor, who had lived in the home for more than 25 years, was very stressed about the sale, so this was the best strategy to avoid the back-and-forth and the uncertainty.

It was the first house he had ever sold so he actually felt a high amount of stress over the whole transaction, wondering if we were going to get it sold if one of these two buyers pulled out. So it was very simple.

Properties selling prior to auction isnt unheard of in the heated Sydney market at the moment due to high demand and a low amount of stock.

There is more demand for buyers to actually buy property before it goes to auction than what there was 12 months ago, Mr Tringali told news.com.au.

Mr Tringali couldnt reveal the minimum price set by the vendor.

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