Purchase and Sale

Question 1

When do Lettings agents have to register with HMRC for AML checks on lettings?

Answer 1

When the rent is more or equivalent to £10,000/month

Question 2

Who do Consumer Due diligence checks applies to? (4)

Answer 2

1. Vendor
2. Purchaser
3. Landlord
4. Tenant

Question 3

When to do Enhanced Due diligence checks?

Answer 3

when Red flags occur

Question 4

What info do you need for CDD Checks?

Answer 4

• ID
• Company info (number, address, names)
• Names of directors
• Information about intended use

Question 5

Who needs EDD Checks?

Answer 5

• Additional procedure for ‘High-risk countries’ or ‘Politically exposed Person’ (PEP) and family members. Need more evidence and monitoring. PEP are at a high risk of bribery

Question 6

Red Flags?

Answer 6

• Unwillingness to provide ID
• Changes in Parties involved in transaction
• Unusual transaction feature
• Unusual currency

Question 7

Crime Act 2002 offences? (3) (estate agency)

Answer 7

• Concealing Criminal Property
• Knowledge or suspicion
• Possession of criminal property.

Question 8

What are some EDDs?

Answer 8

• Check with their accountant
• More prove of Funds
• Purpose of the Transaction
• Increased Monitoring (Solicitor base, bank base)

Question 9

What are the 4 methods of sale?

Answer 9

• Private Treaty
• Auction
• Informal tender
• Formal Tender

Question 10

What things do you considered when looking at the method of sale?

Answer 10

• Client objectives
• Public accountability
• Current and future market condations
• demand
• Time

Question 11

Private treaty P&C?

Answer 11

PROs
- Flexible
- Parties control
- no obligation to sell
- Confidential

CONS
- Gazumping or gazundering
- late decision to pull out
- abortive costs

Question 12

Informal Tender?

Answer 12

• Invite ‘Best Bids’
• Good level of interest
• not legally binding
• bids opened in front of client

Question 13

Whats included in informal tender offer?

Answer 13

• Time and Date
• Name and address
• Conditions
• solicitors details
• finance arrangements
• vender reserves the right

Question 14

Formal Tender?

Answer 14

• Sealed Bids
  -Strong levels of interest or public accountability
• no obligations to accept the highest bid
• Full marketing and legal pack available prior to date
• Offer is binding

Question 15

Informal vs Formal Tender?

Answer 15

Formal tender:
- Single chance to bid
- high accountability
- no opportunity for future bids
- highest figure is usually accepted (don’t have to)
- leads to contract sale

Formal tender > Sale

Private Treaty > Informal tender > maybe more negotiations > sale

Question 16

Auction P&C?

Answer 16

PROs
- Fast
- sale on fall of the gavel
- Used for unusual property
- Strong levels of interest

CONs
- Cost of promotion
- Lack of Confidentiality
- No choice in purchaser
- Intense

Question 17

What is the process for Auctioneering?

Answer 17

• TOE
• COI
• MLC with vendors and purchasers
• Due diligence
• Document must be available
• Condition of sale, memorandum of sale and all notices are to be published
• Reservation price (10%)
• Contract exchange at the fall of the gavel
• Particulars must be in accordance with legislation
• Guidance on online auctions

Question 18

What actions are required by a purchaser ahead of Auction day?

Answer 18

• view the property and consider a structural survey
• Take the proper legal advice and complete a due diligence exercise
• Read the Notice to Prospective Buyers
• Arrange a deposit of 10% and insurance for exchange
• Provide ID for money laundering procedures

Question 19

What is a Special Purchaser?

Answer 19

A particular buyer whom a asset has a special value because of the advantage that arises from its ownership. That other buyers wouldn’t have.

Question 20

What is Special Value?

Answer 20

The additional value that a special purchaser would attribute above a third party

Question 21

Additional RICS guidance for Auctioneering?

Answer 21

RICS Professional Statement: Auctioneers Selling Real Estate at Auction England and Wales including Common Auction Conditions, 2018

Question 22

Advice on setting an reservation price?

Answer 22

• 10% of Guide
• Written agreement
• Confidential

Question 23

Manley Road, whats the act that marketing particulars should be in accordance with?

Answer 23

Consumer Protection regulations 2008

Question 24

TOB for agency?

Answer 24

• Agency basis (sole/dual)
• Agency rights (Sole selling or rights)
• Fee
• Marketing costs
• COI
• Money laundering checks
• Timescale for payments of fees & disturbance
• CHI

Question 25

Vyner Estate, what methods of sale did you advice?

Answer 25

• Mixture of approaches
• Auction and private land predominantly.

Question 26

What are the pros and Cons of an off Market sale?

Answer 26

PROs
-Bidders arnt influenced by low thrid party bids
- Room to negatiate
- Can be faster
- Idea of Worth
- Cost effective

CONs
- Can be lower
- Cant identify interest levels to purchase
-

Question 27

Why did you suggest a 8 week marketing window?

Answer 27

• Allowed for intrested parties to do there checks
• Was short enough that interested can still be high
• Offered time to gather funds.
• Local market was bombing at the time for that type of land parcels

Question 28

Why open house viewing?

Answer 28

• Increased awareness
• Saved on viewing costs and time saving
• Given the interest levels it was faster

Question 29

RICS Guidance for Estate Auctioneering?

Answer 29

Auctioneers Selling real estate in England and Wales, 2018

Question 30

Manley Road, what was on your marketing brochure?

Answer 30

Address
Easements
Boundary’s
rights of way
Dated pictures
Descriptions
Agent and auctioneer details