Purchase and Sale Flashcards
What are the main methods of sale?
Private treaty, informal tender, formal tender, auction
What is private treaty?
The parties are able to negotiate freely, to their own timeframe and with no commitment until exchange of contracts.
What are the advantages of private treaty?
The parties control the process and it is flexible. It is private, and there is no commitment required until late on.
What are the disadvantages of private treaty?
Matters can become protracted and either party can withdraw (abortive costs).
What is informal tender?
Requesting ‘best bids’
When might informal tender be used?
Can be used to bring private treaty matters to an end if there is substantial interest.
What are the advantages of informal tender?
Creates an element of competition so may elevate the purchase price. No commitment required until late on.
What are the disadvantages of informal tender?
Matters can become protracted in legals and either party can withdraw.
What is formal tender?
Often used by statutory body to exercise control and for accountability. Best bids lead to legal contract.
What are the advantages of auction?
Usually able to sell fairly quickly if realistically priced.
What are the disadvantages of auction?
Marketing can be costly, lack of confidentiality.
If you were instructed to sell a property and the vendor wanted to retain an interest in the property, what would you advise?
Potentially a joint venture or an overage clause (if the land/property might be developed).
What is a freehold interest?
Full ownership of land.
What is a leasehold interest?
Ownership of land for a term and subject to a lease.
Can a client agree to an open ended budget in relation to fees and charges?
No - it needs to be itemised.
What does section 21 of the EAA 1979 say?
Any interests in the property must be disclosed during marketing.
What does the Property Misdescriptions Act say?
It was repealed in 2013 and replaced with Consumer Protection From Unfair Trading Regulations 2008 & Business Protection From Misleading Marketing Regulations 2008
Talk about selling on behalf of charities
TBC
What is dual agency?
Contractual relationship with buyer and seller at the same time. Fully prohibited (RICS COI - UK Property Investment Agency PS 2017)
What are multiple introductions?
Agent has competing contractual relationships simultaneously with several buyers. Need to inform all parties of other buyers and have written TOE. (RICS COI - UK Property Investment Agency PS 2017)
What is incremental advice?
Provide another service to an opposite party (ie, acting for the seller but a colleague doing a valuation, building survey etc) for the buyer. Need information barriers and written consent from all parties.
