Purchase and Sale Flashcards
What are the four methods of sale?
Auction
Private treaty
Informal tender
Formal tender
What are the pros and cons of each method of sale?
Auction: quick, no negotiations
Private treaty: confidential, flexible but potential for sale to fall through
Informal: Transparent, negotiable, can be slow as not legally binding
Formal: High level of accountability, no chance for applicants to increase bids
What are the differences between informal and formal tender?
Informal isn’t legally binding and allows room for negotiations to take place.
Formal is legally binding as soon as the bid is accepted.
What are the three types of agency?
Sole = just 1
Joint = 2+ agents, split fee
Multiple = only successful agent gets fee
What must you state in the Terms of Business?
Agency type
Agency rights
Fee
Costs
Confirmation of COI
Money laundering regs
Timescale for fee payment
Details of complaints handling procedure
Rights to cancel
EPC
What are the principles of the Estates Agent Act 1979?
Clarity to agent terms (S18)
Honesty
Liability for costs
Openness regarding personal interests (S21)
Legal obligation to tell client about all offers
Keep clients money separate
What are the penalties of breaching the Estate Agents Act 1979?
Warning order - written warning
Prohibition order - take away agents right to practice
What code of practice would you refer to in agency?
RICS UK Residential Real Estate Agency Professional Statement 2017 The Blue Book
What is the code of practice purpose?
Summaries the best practice for marketing for residential property.
Describe to me the Misrepresentation Act 1967?
Relates to the misrepresentation of fact made by a party during pre contractual enquires which can induce a property to purchase.
What are the penalties of breaching the Misrepresentation Act 1967?
Can be sued for any financial damages, it is a civil offence not a criminal.
Can you give me an example of good communication skills?
Good communication skills may include:
Agreeing clients objectives and negotiating a strategy before negotiations
Deciding what points are non negotiable and what points are.
Walk away when you need to
When would you use formal tender and auction?
Formal = public sector properties
Auction = quick sales for unique properties which are hard to value
What are the consequences of breaching Anti Money Laundering?
What are the limits on accepting cash under Anti Money Laundering?
RICS state that companies should not accept 10,000 euros but my companies policy is that we do not accept cash
Why is informal tender usually the preferred method of sale?
Due to working in a regulated sector, it is out duty to achieve best value for our clients. Using informal tender allows negotiations on multiple bids allowing the property to achieve best value
What are the key points in the Estate Agents Act 1979?
What is private treaty?
Common method of sale
Property marketed openly with the use of marketing materials and online website portals to afford a potential purchaser to ‘treat’ with the seller.
Parties free to negotiate in their own time and without commitment in the open market
How should viewings be appraoched in residential agency?
The way they should be approached should be agreed in the marketing strategy with the client.
What is the occupier of the property is not your client?
Agree arrangements with the occupier beforehand. eg 24 hours notice to the tenant.
What should the client be advised about in regards to viewings?
Date
Time
Records of who went
Feedback within 3 working days
How should viewings be carried out?
By appointment - so arrange in advance with client or occupier
What is the benefit of viewings?
Maximise exposure
Helps us qualify our buyers and find out details of their personal and financial circumstances
What is the benefit of viewings?
Maximise exposure
Helps us qualify our buyers and find out details of their personal and financial circumstances
Keybook
Kept separately from the key locker in a locked desk drawer.
Who do you provide keys to?
Someone who provides satisfactory ID
Who can prepare brochures/particulars
Only by someone who has inspected the property
Who can prepare brochures/particulars
Only by someone who has inspected the property
Who can prepare brochures/particulars
Only by someone who has inspected the property
How do you ensure consistency in particulars?
Take inspection proforma on site
What information should be included in a property particular?
Location
Aspect
Availability and proximity to amenities, services, facilities
Fixtures and fittings
Fitness for purpose
EPC
Physical characteristics
Price
History
council tax
Tenure
Who approves draft particulars?
Client
What must you ensure when marketing a property?
Honest
Transparent
Accurate
When can you install a marketing board?
When you have written instruction for the disposal
What can’t you do with other agents boards?
Can’t remove or replace with your own and can only take down with clients permission
What can’t you do with other agents boards?
Can’t remove or replace with your own and can only take down with clients permission
What are the 3 main reasons people sell?
Divorce
Dead
Debt
What is a probate sell?
Legal and financial process of dealing with property or any other assets when someone has died
What does the Estate Agents Act promote?
S18 - Clarity of terms of business
Act with honesty and integrity
Agreement and liability for costs
S21 - Openness regarding personal interest
Absence of discrimination
Legal obligation to tell client about all offers
Keeping clients money seperate
S18
Specify all costs and fees in advance in written in the Terms of Business
7 points of the estate agent act
Key points of the estate agents act
7 key points
Most important - S18
Specify nature of agency
Concept of a cooling off period
Cooling off period
clients have 14 days to change their mind about an instruction - we would not get a fee if they did that
Penalties in the estate agents act?
Penalties against the individual agent or the practice.
Negative licencing
Warning order
Prohibition order
Who polices the estate agent act?
national trading standards estate letting and agency team
Who polices the estate agent act?
national trading standards estate letting and agency team
What is the RICS professional statement regarding agency matters?
RICS Professioal Statement UK residential real estate agency 2017
What are the steps you take when someone wants to sell their property?
CDD
ToB
COI
Check for EPC
What are the steps you take when someone wants to sell their property?
CDD
ToB
COI
Check for EPC
Process of marketing advice
How do you report MA?
Report value in writing
How do you record comps?
Must have them saved on file for records
What is the Misrep act?
any false statement of fact made to a party during pre contractual enquiries which has lead to the party to purchase or letting of a property
What does an agent have duty to?
Check information and advice or anything about the property to ensure it is reliable
Consumer Protection Regulations 2008
Relate to consumers and business goes hand in hand with the misrep act
What’s a consumer?
Reasonably well informed person as per the CPR
Penalties for CPR
Unlimited fine and or prohibition order
2 years in prison
