Sale by Tender

Published on Friday, 17 April 2015. Posted in Case Studies


The Buyer accused the Agent of claiming payment of a fee for which there was no written or verbal agreement. She explained she had made a bid by tender for the property, and that the form she completed explained that an introduction fee of 2% (plus VAT) of the sale price would be payable by her to the Agent. However, the Buyer contended that the terms of the ‘Sale by Informal Tender Bid Form’ (the Form) made it clear that the fee would only be payable in the event that her tender bid was accepted which, in this case, it was not (the Seller rejected that offer but had accepted a subsequent higher offer from her which had not been made through the Agent). The Agent stated that an introduction fee was due to them in accordance with the terms of the Form which explained that the fee would be payable by the Buyer in the event that she purchased the property.


It was my view that the Form completed by the Buyer entitled the Agent to claim an introduction fee only in respect of a sale arising, at any time, as a result of the acceptance of the tender bid that was made by the Buyer during the sale by informal tender process. The Buyer’s successful offer for the property was not made via the tender process, but rather was made in the ordinary way over the telephone after the tender bid process had ended. It followed that I did not consider that the Agent could rely on the Form completed in relation to the Buyer’s tender bid to claim an introduction fee in the sale that arose following the Seller’s acceptance of her separate, later and higher offer that was made outside of the tender bid process.


In order to ensure their entitlement to an introduction fee it was my view that the Agent ought to have required the Buyer to complete a tender bid form for each of the offers that she made, or ought to have otherwise sought the Buyer’s written agreement to such a fee. The Agent did not do so, nor did they seek to reach an agreement with the Seller regarding the payment of their introduction fee when it was brought to their attention prior to exchange of contracts by the Buyer’s solicitor that she was intending to dispute their fee entitlement. Neither the Buyer nor the Seller could be held accountable for the Agent’s oversight in this regard; this was a matter for which only the Agent could be held accountable. I, therefore, directed the Agent to withdraw their introduction fee invoice when making my decision. 


As a result of the increased use of ‘Sale by Tender/Buyer Pays Fee’ process, I have issued detailed Guidance to assist in promoting transparency and consistency of practice, allowing both buyers and sellers to make an informed decision. The Guidance can be accessed here.