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Case Study Flashcards

1
Q

Who are Townhus? What type of business?

A

Developer - JV between TOWN and Trislehus (Swedish Housing manufacturer) Registered company

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2
Q

What is the Real Estate Agency Code?

A

Sets out core principles that agents must observe when undertaking agency work. Uk Residential Real Estate Agency 2017 ‘blue book’
Acting ethically - duty of care, avoid conflicts, and gifts
Securing instructions (terms) - AML checks and types of agency
Marketing the property - market appraisal and marketing particulars
Disposal - method of sale

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3
Q

What is the process when considering a new instruction?

A

CIT
Competence - SUK to undertake the work
Independence - no conflict to act for the client or on property
Terms - Provide clear ToEs for signatures.

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4
Q

How did you carry out a conflict check?

A

I inputted the client and property address into our internal conflict check system. This outlined no conflict with either, I printed out the results for my director to sign, I scanned and kept on the instruction file.

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5
Q

What AML checks did you undertake? Which legislation>

A

In accordance with Money Laundering Regs 2017, I conducted customer due diligence on the client. I checked on companies’ house the name, number, and register office. I established the beneficiaries/ directors (25% stake) and gathered ID information and proof of address on each. I also obtained the intended nature of the business relationships and proposed funding.

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6
Q

What was included in your ToEs?

A

Agency basis - Sole agency
Agency rights - sole selling rights
Costs & charges - 1% + £500 per handling transaction
Agent duties - advice on price, marketing and manage sales ( 2 pages of local marketing per month)
Payment of accounts - 100% on completion
Clients responsibilities - Consumer code & marketing
Outline no conflict
Complaints handling procedure
AML requirements
Indemnity insurance - on request

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7
Q

What was the location of the property like?

A

2.6 miles to City centre
2.1 miles to Cambridge North train station
1 mile to A14 junction
On the guided busway which connects- city with st ives
Largely residential area, a mix of local amenities Education - (Cambridge Regional College, King Hedges Primary School)

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8
Q

What were the construction methods? External considerations?

A

Construction is fully prefabricated with a
closed panel timber frame for the houses,
and a CLT frame for the apartment block/
common house. The prefabricated wall
panels are made in Sweden and
transported to site for assembly.
- Strip foundations, slate pitched roof, brick veneer with roof and wall insulation between brick and plasterwork.
Single vehicular access / parking on site (1perhouse), three electric car charging, bike and bin storage.

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9
Q

What were the internal conditions of the properties

A

Good condition, high specification including:
MHVR system, triple glazed
U/F heating GF - (wet), Rads FF
Air-source heat pump connected to Daikin boiler
Electric heating system
AEG appliances & no washer/dryer

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10
Q

Common defects in these properties (new build)

A

Shrinkage - cracking plaster from drying out.
Settlement cracks - foundations settling
Superfical defects - paintwork, scuffs
Faulty systems - poor workmanship/installation

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11
Q

Who maintains the ancillary facilities?

A

Cambridge Cohousing Ltd is the management company for ML, therefore facilities are managed by the group. Each household is charged a service charge estimated to be £350pa.

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12
Q

Who was the contractor?

A

Local Cambridge based builder.

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13
Q

What is galvanised zinc?

A

Metal cladding used for decorative purposes. More energy-efficient production than steel or aluminium cladding. Decided by group.

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14
Q

What are the service charges with the property?

A
  • Annual service charge levied by Cambridge Cohousing Ltd estimated to be £350pa.
  • £1000 first year – start up cost.
  • Apartments extra £400pa for building insurance (leaseholders)
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15
Q

Are you aware of how the 31 units exchanged?

A

Solicitors treated like a typical off-plan sale, undertook searches, and responded to queries. 10% sum of monies of exchange of contracts.

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16
Q

What did the handover/completion consist of?

A

A home demonstration following a checklist for each purchaser, signatures and date on the plans & handover documents. Any snagging issues reported to the client immediately.

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17
Q

What were the ancillary facilities?

A 
Common House (inc. a shared kitchen & playroom), shared launderette, studio space, library, guest rooms & bathroom, gym, workshop, veg patch.
A shared electric car for the group.
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18
Q

Who was the builder (contractor)? Build programme?

A

Local builder called Coulsons. The Build was 18 months, completion in December 2018

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19
Q

What are the cost implications of MMC?

A

MMC - Setup costs are expensive, with machinery and warehouse space. Quick site assembly, means faster delivery which reduces the finance period & reduced numbers of site staff.
-Reduction in site preliminaries, site storage requirements and welfare facilities
Traditional method - Resources and workforce readily available to build, longer build period, increased chance of defects due to weather.

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20
Q

What did you do prior to your inspection?

A
  1. Desktop Study - Internet search on the planning portal, google, and Rightmove.
  2. Arranged access - confirmed with client and site manager access and timings for inspection.
  3. Organised equipment - PPE, Inspection proforma checklist, plans, camera, pen and paper, disto, mobile.
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21
Q

What did you take with you on your inspection?

A

Mobile, camera, laser disto, plans, PPE, Pen & Paper

22
Q

What did you do to ensure you health & safety?

A

Consider my lone working procedures. Wear PPE
Sign in at the site office, have a site briefing from the SM. Accompanied by site manager. Sign out when leaving the site.

23
Q

What was the architectural style?

A

Various stylings of brick veneers. Contemporary design, full-length windows and doors for natural light.

24
Q

Method of sale - What were your client’s objectives?

A

To achieve best price for each unit in a reasonable agency period (24 months).

25
Q

Why did you immediately discount auction?

Informal tender & Formal tender?

A

It’s a short and intense marketing period which I felt wouldn’t fetch the best value. I also had sufficient comparable evidence to value each unit accurately.
FT - complex method for apps, deter offers and not suitable in slow market.
My client outlined a marketing period which would have been inappropriate for both these methods.

26
Q

Method of sale - How did you present your recommendations?

A

I outlined my recommendations in a sales and marketing report which was discussed in a client meeting.

27
Q

Why did you recommend the use of a reservation form and fee?

A

Form - ensures I have all information verified and on record to mitigate delays with sale. Signed and dated to share with respected solicitors.
Fee - ensures that all purchasers are genuine and incentivizes purchasers to cooperate with the sale.

28
Q

Explain cohousing?

A

Cohousing is an intentional community of private homes clustered around shared space. It originated from Denmark and there are around 20 schemes in the UK (10 in London).

29
Q

PS1 (Red Book) - other exceptions to red book compliance?

A 
Agency / Brokerage 
Expert Witness
For Statutory purposes
Internal Purposes, without liability
Negotiations or litigation
30
Q

Comparable method - what was the methodology?

A
  1. Source and select comparables
  2. Confirm and verify evidence
  3. Assemble into a schedule
  4. Establish a hierarchy of evidence
  5. Analyse and form an opinion of values
  6. Stand back, reassess and report to the client (prepare file note).
31
Q

When verifying evidence? What were your findings?

A

Generally achieved prices were below asking prices and developers were using incentives to leverage sales. My comparable evidence outlines net prices. I also gauged market sentiment from other agents.

32
Q

What is the RICS guidance on comparable evidence?

A

RICS Comparable Evidence in Real Estate Valuation, 2019. A new hierarchy of evidence:
Category A - direct comparables (near-identical, completed, verified. Askings prices (careful analysis)
Category B - general market data (historic and indirect evidence)
Category C - other sources (background data, evidence from other properties & locations)

33
Q

How did you adjust values for second-hand evidence?

A

I put the least weight on this evidence and used it primarily to sense check my proposed values. I expected to see a 10% premium on this evidence.

34
Q

You outline a dearth of comparable evidence, what do you mean?

A

No new and identical evidence in the local vicinity. I chose to consider new sites which were situated a similar distance from the city centre (fringe locations).

35
Q

What trends did you see from your comparable evidence?

A
  1. The use of HTB for this mid-market product

2. Prices being chipped and developers offering incentives.

36
Q

3 beds @ Virido - was that an anomaly?

A

The size is bigger than the 4 beds, so no. But also the use of HTB drove that sale and the threshold for HTB is £600k.

37
Q

Can you briefly explain your pricing? What factors reflected premiums

A

4-bed configurations reflect a £5k uplift
EOT properties reflect a £10k uplift
A £10k premium for Plot 1 (aspect & balcony)
I recommended a 5% uplift on my selling prices to reflect asking prices (this was to factor in the likely incentives used to leverage negotiations).

38
Q

HTB - Why did you think this was important?

A

An owner-occupier market in Orchard Park, the area offers relative affordability, therefore, the qualification of HTB would support sales.

39
Q

Why did you not apply a cohousing premium?

A

Limited cohousing evidence, insufficient to rely on with any professional certainty. I relied on my new build comparable evidence.

40
Q

Briefly explain Virido?

A

A scheme of 104 units in 8 quads. Built to a high specification and finish by a renowned local developer. Situated to the south of the city, a more valuable area.

41
Q

Briefly explain Windsor Gate?

A

14 unit scheme comprising townhouses and flats. Built by a small local developer. The specification was basic but contemporary in design. Situated on a busy road, a good level of local amenities.

42
Q

Can you explain the additional considerations in the agency brief?

A

Respect the privacy of the CCL residents with a clear viewing notifications.
By request of the group and honoured by the developer, the agent was responsible to arrange this meeting.
CCL membership fee - an additional cost to cover membership to the group and start-up costs incurred by the group.

43
Q

How do you make a HTB application?

A

Obtain an application form from an HTB agent. Developments have to be registered to the government scheme.

44
Q

What are the key principles of the EAA 1979?

A

T - Terms - clear and signed by both parties
H - Honest - transparent and upfront
I - Independence - no COI in ToEs
D - Do not discriminate on any purchasers or third parties
O - Disclose all offers to your client
C - hold clients money securely
C - outline the costs and disbursements with the agency work

45
Q

How did you inform purchaser 2 of his low offer?

A

Firstly I informed them over the phone, as I felt he might counter offer. Following my conversation, I followed up with an email and recorded it on file.

46
Q

What does legal documentation entail?

A

Draft up contracts for solicitors.

47
Q

What were the AML checks for an individual purchaser?

A

I obtained proof of identity (passport, driving license), I also obtained proof of address (bank or utility bill dated within 3 months). Photocopied, signed, and held in secure file.

48
Q

What did you do to ensure the sale processed in a timely manner?

A
  • Encouraged the purchaser to use recommended solicitor (who had dealt with the scheme previously)
  • Spoke with buyer’s solicitor & buyer weekly to assist where possible
  • Organised and arranged site visits with the purchaser.
49
Q

What does MMC stand for and what is its premise?

A

Modern Methods of Construction, it is centred around the use of off-site construction techniques that can benefit from factory conditions and mass production techniques.

50
Q

Can you name some types of MMC

A
  • Panellised units produced in a factory and assembled on-site to produce a three-dimensional structure.
  • Volumetric construction to produce three-dimensional modular units in controlled factory conditions prior to transport to site.
  • Hybrid techniques that combine both panellised and volumetric approaches.

APC (18 decks)

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