Level 1 Flashcards
What are the four methods of sale?
Private Treaty
Informal Tender
Formal Tender
Auctioneering
What are the pros / cons of informal tender?
Pro: leads to competitive pricing (bidding), no obligation to accept the highest or any offer received.
Con: Late decision not to buy
What are the pros / cons of private treaty?
Pro: flexible, no contractual obligation, confidential
Con: late decisions not to buy, gazumping or gazundering
Could you carry out an auction?
I understand the process but would not carry out as do not have the competence or experience
What are the pros / cons of formal tender?
Pro: high level of public accountability (governments use it), leads directly to contract for sale
Con: no competitive pricing, applicants have one chance to bid.
What are the pros / cons of auctions?
Pro: quick, can lead to competitive pricing, good for properties hard to value
Con: expensive, lack of confidentiality, vendor cannot decide the purchaser
What are the factors you would consider when deciding on the method of sale?
-Timing requirements
-Client’s objectives
-Current and likely future market conditions
-Likely demand for property, target market
What is meant by caveat emptor?
Let the buyer beware – the buyer should satisfy itself on all matters relating to the property
What is the difference between terms of business and terms of engagement?
Terms of business are overriding for the firm whereas
Terms of engagement are instruction specific.
If you are instructed to sell, and the seller pulls asset from market, what are you covered by?
Ready, able and willing purchaser’s clause
Protects the agent: in all our ToBs
What to do if a party taking too long to act/not completing a transaction?
The vendor can serve a Notice to Complete which gives a deadline to complete by
If don’t meet, you can cancel contract and reissue to market; any deposit retained by vendor.
And sue for damages, but only for their loss compared to new lower price obtained with new buyer
What is TOGC?
Transfer of interest between business to business. Generally, TOGC as sales tend to be business to business to continue use of asset as is. Always would ask for expert advice.
What are the advantages and disadvantages of third party databases?
+easily accessible information
+large volume & range of data
-data not always verified
-high costs
What is outlined in Terms of Engagement?
-Outline S18 & S21 of EAA
-Basis of agency: sole
-Dee: ad hoc, depends deal by deal on scope of work
-Marketing costs
-Confirm no COI in writing
-AML requirements
-Details of CHP
Explain what is meant by multiple introductions?
- Agents can introduce a property/opportunity to multiple parties.
- Once one of the parties states an asset is of interest and ToE are signed you have to stop engagement with other parties and inform them of your involvement in acting on behalf of another party.
