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Purchase and Sale Flashcards

1
Q

What is the New Purchase and Sale RICS documentation ?

A

Property Agency and Management Principles, 1st edition global Professional Standard

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2
Q

What does it say Property Agency and Management Principles, 1st edition global Professional Standard

A

This will be a high-level global professional standard that sets out the principles for RICS members and RICS regulated firms operating in residential, commercial and combined real estate agency and management. This will cover:
* Sales
* Lettings
* Management
* Auctioneering
RICS is working on reviewing and refreshing the existing body of standards and guidance relating to property lettings, sales, auctions, and agency property management.
RICS will work to consolidate current guidance into three more succinct professional standards, as detailed below.

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3
Q

What does RICS UK RESI RE AGENCY PS 2017 say

A
  • Provides a summary of code of practice in all aspects of property marketing for resi property.
  • Relevant estate agency legislantion eg misrep act, estate agent act
  • Standards ethics
  • Before securing instruction , marketing, ending instruction
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4
Q

What does the Estate Agents Act 1979 say

A
  • Clarity as to the terms of the agency – s18
  • Honesty /accuracy
  • Agreement & liability for costs
  • Openness regarding personal interests.
  • X discrimination
  • Legal obligation to tell client about offers received.
  • Keep clients’ money separate.
  • Specify all costs/fees in advance, in writing in terms of business. - s18
  • Itemise all payments – x global budget allowed.
  • Specify nature of agency and selling rights (Sole selling rights or sole agency rights / sole, joint sole agency or multiple agency).
  • Disclosure of personal interests.-s21
  • Misrepresentation of intrest/offers.
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5
Q

What are the penalties of the Estate Agents Act 1979 and who policies it ?

A
  • Act policed by the national trading standards estate & letting agency team (NTSEAT)
  • Act allows for prohibition/warning order.
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6
Q

What is the Cooling off period

A
  • A cooling off period of upto 14 days is allowed for clients who change their minds and x want to instruct the agent in accordance with current consumer protection regulation.
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7
Q

Whats the Consumer Rights Act 2015

A
  • This act amends existing consumer protection law and gives consumers new rights and remedies.
  • Consolidates law relating to unfair terms and contracts between businesses and consumers.
  • Letting agents must display a summary of their charges both in their letting and management on website.
  • If a resi agency holds clients’ money , then firm must publish statement as to whether they are a member of clients’ money scheme and details of scheme.
  • 5k penalty for each breach.
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8
Q

Whats the Misrepresentation Act 1967

A
  • Relates to misrepresentation or false statement of fact made by party during pre-contractual enquiries, which has effect of inducing the party to purchase.
  • Vendor can be sued for damages and or contract rescinded.
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9
Q

What can Misrepresentation be

A
  • Can be fraudulent, negligent or innocent.
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10
Q

What’s the three tests to decide agents liability for negligent statement ?

A

Foreseeability
Proximity
Fairness

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11
Q

What’s the penalties of Consumer Protection Regulations 2008

A

Unlimited fine
Prohibition order and prison up to 2 years.

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12
Q

whats tort

A

civil wrongdoing where one person’s actions cause harm or loss to another, l

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13
Q

What are the requirements for Marketing Signage

A
  • Resi Boards max size allowed 0.5 sq.m (flat) and 0.6 sqm (v board)
  • Must x project 1m from face of building & x above 4.6 m from ground in a safe condition.
  • Planning consent is required for non-resi boards over 2sqm (flat) and 2.3 sqm (V board). – per building
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14
Q

When do you need planning consent for marketing boards ?

A
    • Illuminated boards, remote boards, boards erected on listed buildings and conservation areas. .
  • Must be removed 14 days after completion of transaction.
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15
Q

What is private treaty what are pros and cons

A

Negotiated sale without commitment in the open market.

A property is advertised openly through various channels, such as marketing materials and online listings, to attract potential buyers who can then negotiate with the seller. Offers are assessed by the seller’s agent, taking into account factors like the offer amount and the buyer’s readiness, including proof of funding
Advantages are that it is flexible and parties can control the process.
- Inexpensive
- Seller not obligated to sell.
- Confidential.

Disadvantage is late decisions not to buy and abortive costs.
- quoting price could be under or over stated, requiring prudent advice on offers put forward or offers considered

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16
Q

What is informal tender and pro’s and cons

A

Agent invites in writing all interested parties to submit best and final offer.

Used where there is good market demand or where negotiations need to be brought to a close after a period of marketing via private treaty.

17
Q

What is sealed bids ?

A
  1. Single chance to bid for property.
  2. No opportunity for a further bid.
  3. Blind bid.
  4. Possible to lead directly contract for sale.
    strong demand for a property

-public accountability is required.

18
Q

What is Auction ?

A

Where a property is unique or cannot be priced accurately; for instance, when it is in poor repair, a quick sale is needed, there is high market demand, or there are serious defects.
At auction, contracts are exchanged and a deposit paid when the gavel falls.

Advantages :
certain timescales can be achieved.

‘Best price’ can be achieved after wide market exposure.

Disadvantages:
Expensive advertising costs.

It is not a confidential process

The marketing period is likely to be short

A failure to sell might lead to the property becoming ‘blighted’

There is little control over the identity of the purchaser

19
Q

What are the different Bases of agency

A

Sole Agency - Only one agent
Joint Agency - Two + agents sharing a fee on a pre agreed basis
Multiple agency - Any number of agents but only the successful agent gets a fee

20
Q

Timeline of sales instruction

A
  1. Receive instructions from client.
  2. Check competence and independence.
  3. Issue agency instruction and agreement to client and receive back signed – s18
  4. Complete ML checks.
  5. Gather info eg: planning, floor plans etc
  6. Undertake due diligence – read leases,environment
  7. Check VAT position of vendor and whether has TOGC status.
  8. Inspect and measure property.
  9. Prep comps and valuation (non-red book)
  10. Prepare marketing report and obtain approval on marketing brouchre Then undertake marketing campaign.
  11. Negotiate sale, draft heads of terms and instruct lawyers and instruct lawyer.
  12. Liase with lendors lawyers. Assist with any quires.
  13. Issue invoice upon completion of transaction and retain file
21
Q

Whats included in the TOE

A
  • Agency basis (sole/joint agency)
  • Agency rights (sole selling or sole agency rights)
  • Proposed fee
  • Marketing costs
  • Confirmation of x coe
  • Ml regulations
  • Timescale for payment fees and disbursements
  • CHP
22
Q

What are the different agency rights

A

Sole selling rights
sole agency rights

23
Q

What is Sole selling rights

A
  • SSR means remuneration will be payable if contracts are exchanged in a period when SSR exist, even if purchaser is x found by agent but by another party. – Also, fee is due after SSR period ends when the property sold to a purchaser who was introduced by firm during period of SSR contract
24
Q

What is sole agency rights

A
  • SAR is when fee is only due if agent introduced purchaser within term of instruction agreement. If client finds purchaser, then x fee.
25
Q

What is notice to complete ?

A

Giving them a deadline to complete, if deadline passess vendor can rescind the contract and remarket property. Vendor may be able to sue for damages to claim for any loss in value following the sale of a property to another party at a lower price

26
Q

What is a ready able and willing purchaser

A

When an applicant is ready and able to proceed with purchase, but the client decides to withdraw an abortive fee may be charged by agent.

27
Q

What is used to create Data rooms ?

A

Estate create

28
Q

What is heads of terms ?

A

Head of terms refers to a pre-sale agreement on some of the key issues in relation to a sale that the two involved parties agree to when they are unable to proceed with the transaction or sign a full contract at that point.

29
Q

How do contracts exchange ?

A

Contracts exchange by During the exchange of contracts, both solicitors or conveyancers will read out the contracts over the phone in a recorded conversation.

They will make sure the contracts are the same and then post them to each other.

Once contracts have been exchanged you’re legally bound to buy the property

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