Purchase and Sale L3

Question 1

Cross House Tewkesbury. Tell me about the instructions you received.

Answer 1

Instructed to sell by private treaty for the best possible price.

Question 2

Cross House Tewkesbury. You advised on property condition; did you have this information confirmed by a building surveyor?

Answer 2

No. I commented only on the presence of apparent defects following limited visual inspection and that would cause interested parties to seek further specialist investigation.

If challenged on what…
- Bowing internal walls
- Deteriorating windows (particularly relevant to listing.)
- Very dated looking service media
- General poor state of repair.

Question 3

Cross House Tewkesbury. How did your client take your advice in relation to reduced costs?

Answer 3

Well, he was pragmatic in his approach in view of the length of his ownership vs money he had spent on maintaining the property.

Question 4

Cross House Tewkesbury. Did you advise on anticipated costs from the higher offer?

Answer 4

No.

Question 5

Cross House Tewkesbury. How did you quantify the success rate between the two offers?

Answer 5

• Considered the clients priority to release equity quickly and the length of time on the market.
• Considered the chances of applicant failing to secure finance on property that was largely vacant and not ready for immediate occupation. AND purchasers reported lack of funds for the renovation.
• Chances of obtaining the same deal if we had to renegotiate with the other party in the event of deal falling through.
• High risk property to hold, 8,000 ft2 of largely vacant property, timber frame, with statutory obligation to maintain.
• Real costs 5% interest rates.
  -Opportunity cost of not having the money.

Question 6

Talbot House, Stow. Could you have advised the client to let the property?

Answer 6

No. Not capable of occupation without significant work.

Question 7

Talbot House, Stow.What is the rental market like in the area?

Answer 7

Strong, good demand, low supply, tourist hotspot. Largely independent retailers poor covenant.

Question 8

Talbot House, Stow. You advised on development potential, what led you to this?

Answer 8

• Local plan
• Neighboring properties
• Separate access to the first floor.
• Good demand

Question 9

Talbot House, Stow. You advised on construction costs, what costs were involved in making the property suitable?

Answer 9

Roof
Floors collapsed on second floor
Ceilings collapsed
Windows in poor condition
Conversion costs

If challenged on specific costs…used BCIS to provide general costs for conversion of the property type in the area £200-£300 per square foot.

Question 10

Talbot House, Stow. With your advice on market value, what was your due diligence to get to this recommendation?

Answer 10

• Statutory checks
• Through Inspection
• Collated market evidence
• Residual for the development costs
• Provided a range of values to account for variables in residual.

Question 11

Talbot House, Stow. Can you give me some further information on the statement of tarnishing the property?

Answer 11

Failure to sell at auction provides a public record of the properties failure to sell after good period of marketing and fully informed applicants. Reasonable to assume it was overpriced or there was another issue not immediately apparent.

Isn’t the same true by private treaty… yes but private treaty isn’t time pressured, and finite greater possibility of sale, and less impact if it doesn’t.