L3 Purchase & Sales Flashcards
Who do you owe a duty of car too?
I owe a duty of care to both the vendor and the potential purchaser
How do you keep both vendor and applicant informed?
Vendor
Regular email updates as to comments on the property, how viewings went
Always inform the vendor of any offers (EAA 1979) (Promptly and in writing)
Applicant
- Email updates
- Mailing list
- Agreement to be texted
How do you ensure both parties have a clear understanding of ToCs and counter offers during negations?
Ensuring that both parties have read and signed the Terms
Relying the counter offer and advising both parties on it
How do you handle either party wanting to amend terms of sale after sale agreement has taken palace?
I advise that I will update the other party as to their wish however as the terms of sales have been agreed it is very unlikely that anything will change
- Agreement already signed to
- Greater due diligence should have been taken on the part of that party
- State the advice that you gave them before in regards to the subject / did they have any intent to change their minds before?
What due diligence checks must be undertaken before exchange/completion?
SMARTSearch
What are the sales points for the property (Haines House, Low offer negotiation)
2 Bedroom flat
1,000 sq ft
£850,000
£575 pw
3.5% yield
What were the investors motives (L3 Purchase and sales)?
- Looking to hold investments into the long term
- Rental income
- Hoping to maximize profits once Battersea Power station had been built
- Create a larger portfolio around the area
When meeting investors how did you help him make an informed decision?
I made sure I fully understood the investors needs and what he wanted from the properties he would buy
I informed him on the local market conditions;
- How development would effect value
- Upsurge in demand for the area rent wise
- How some aspects of the area had not been reflected in the values yet
His wants;
- To get a foot on the property ladder in the UK
- Have a small portfolio of properties that his son could take over and
receive the income from
- He was unsure on the length of time he would hold the properties for
When conducting the investment analysis for each apartment what data or criteria did you require?
- Size
- Specification
- Floor
- Aspect
- Amenities
- Price
- Passing rent
This allowed me to create a spreadsheet which accurately showed the investor the best to the worst properties
The best properties were not necessarily the most expensive properties
- Different developments had different premiums on them (those closer to Battersea Power station for example)
- However these premiums didn’t relate in a comparative way when it came to the rents received
- I found developments close to Battersea but not within the scheme its self were very good opportunist, they had high demand and high rents
Still had access to the amenities the area had to offer
What strategy did you use to identify apartments?
Based off the investors criteria and my own experience
- Looking for properties that would have access to the schemes amenities
- New build
Established developments around it so view shouldn’t change too much
- Calling local agents to see what they might have coming to the market
What are the most important considerations for investors when considering potential yields and future growth (Battersea / Nine Elms)
- Their timeline
- How much stock is coming onto the market
- Sightlines for the aspect of the property
- Will new tenants have access to the same amenities
- Transport
- Location
What fine can you receive under the Estate Agents Act 1979?
Policed by the National Trading Standards
- Costs against individual / practice
- Right to be estate agent can be taken away
- Prohibition Order
Why did you use Private Treaty?
Least invasive method and allows for the vendor to freely negotiate in their own time
What would you do if a higher offer had come in after you had started processing a purchaser?
Inform the Client
- Further understand their wants and needs
- does this new applicant show intent to commit?
- Does the Vendor want the sell quickly or wait for a higher offer
- What has transpired with the current applicant? (Contract / good will?)
