Purchase and Sale

Question 1

Four main methods of sale

Answer 1

1. Private treaty
2. Informal tender
3. Formal tender
4. Auction

Question 2

How to approach what method of sale to adopt

Answer 2

1. Client’s objectives
2. Public accountability
3. Current and likely future market conditions
4. Likely demand for the property - target market
5. Timing requirements

Question 3

Private treaty

Answer 3

Parties are free to negotiate in their own time and without commitment in the open market.

Question 4

Disadvantage of Private treaty

Answer 4

Late decisions not to buy
Associated abortive costs
Potential for gazumping/gazundering

Question 4

Advantages of Private treaty

Answer 4

Flexibility
Parties control
Vendor - no obligation to sell
Confidential

Question 5

Informal tender (best offers or bids)

Answer 5

Used when there is a good level of interest in the property either at the commencement of a marketing campaign or to bring negotiations to a conclusion

Question 6

Is informal tender legally binding

Answer 6

no, either party can withdraw at any point up to contract

Question 7

How should bid be opened

Answer 7

In front of the client/ line manager

Question 8

How to invite interested parties to submit their best bid in accordance with set timescales

Answer 8

In writing