Purchase and Sale – Level 1 Flashcards
• What are the advantages and disadvantages of informal tender vs private treaty?
Informal Tender:
Pros:
No listed sale price.
Bids are kept confidential.
Seller does not have to accept the highest bid.
Can drum up a lot of interest and get a higher-than-normal offer.
Bids opened in front of an independent witness.
Cons:
Drawn out sales process.
Sometime buyers collaborate by submitting higher offers and then pull out at the last minute in the hope for another offer to be accepted.
Can lead to no sale if no offers are received.
Private Treaty:
Pros:
Price is stated.
Seller is not obliged to sell.
A confidential process
Cons:
Gazumping at the last minute.
Late withdrawal or fallen through sale.
The marketing price can be either under or overpriced.
• What are the six principles from the Estate Agents Act?
Think?
Fees.
Services.
Type of business offered.
Treat.
Statements.
- You must provide your scale of fees to the client.
- Tell your clients any services that you may sell to potential buyers such as mortgages etc.
- Explain your terms of business such as Sole Agency etc.
- Must declare any personal interest.
- Treat everyone fairly when handling negotiations and keep everyone informed.
- Must not make a false or misleading statements.
• What is the typical £psm for a type of property you have been involved in?
As I cover Essex and East London to Central London, I do not have a typical £PSM as it varies from anything from say £2,500m2 to £12,000m2.
• When did the Blue book come into force?
- I know the 3rd Edition was in 2009.
• What is the difference between an appraisal and a valuation?
- An appraisal is an opinion of Value for marketing purposes.
- A valuation is a statement of fact as to the actual value on a given date.
• What is the difference between informal and formal tender?
- A formal tender offer once accepted will have the deposit banked and will have been seen to have sold.
- However, if the purchaser does not perform, they will lose the deposit.
