Purchase and sale - lvl 2 Flashcards
Explain a factor which impacts upon sale value/sale terms.
Factors which affect risk (PULL VOQS) -
- Potential for rental and capital growth
- Use class
- Lease length
- Liquidity or ease of sale
- Vacancy rate
- Obsolesence
- Quality of covenant and location
- Security of lease
Explain an example of when you provided marketing/sale strategy to a client.
4-5 Market Place, Bexleyheath -
I was instructed by an owner to sell a freehold property which comprised of a ground floor dentist unit.
My client wanted to sell the property and sought flexibility in the sale process, they did not want to spend a large sum of money on marketing. I advised on private treaty as the method of sale.
I valued the property and reported this to my client. Subsequent to their approval, I produced marketing particulars which included the sale price. I included other relevant information including the description of the property, floor areas, lease and our agent information.
Talk me through an example of when you have purchased/sold a property.
Winchester Buildings, Rivermead Road -
I was informed by a freeholder that their property’s value had diminished because part of the property was to be acquired for a development scheme. The property was possibly subject to blight. In order to compel the acquiring authority to purchase the complete property I advised my client that the property would need to be marketed to prove a reasonable endeavour to sell the land.
The method of sale by private treaty was appropriate to for a potential blight claim.
After I determined the market value I produced the sales particulars. I included the WAULT, location, description, lease details and NIY on them.
I informed my client of all offers and they accepted on one. I requested and received proof of funding, solicitor’s details and other contextual information.
I received a signed memorandum of sale from the purchaser and assisted on this through exchange and completion.
4-5 Market Place, Bexleyheath - how did you know there was residential development potential?
I was informed by the freeholder that they had previously received planning consent to build two 2 bedroom flats. The owner decided not to construct the residential accommodation.
Undertaking due diligence on the property I discovered that the planning consent was granted over 3 years prior to my instructed and had expired.
4-5 Market Place, Bexleyheath - why did you advise to sell by private treaty?
My client wanted to sell the property and sought flexibility in the sale process, they did want to spend a large sum of money on marketing.
4-5 Market Place, Bexleyheath - could you have advised of another method, perhaps auction?
My client did not want to spend money on marketing the property for an auction sale. They wanted flexibility and did not have a requirement for funds. They did not want to subject themselves to the short timescale.
4-5 Market Place, Bexleyheath - tell me about the yield evidence you found.
For dentist units within greater London
4-5 Market Place, Bexleyheath - were there any restrictive covenants?
The lease’s use class was restricted as a health centre within E Use Class of the TCPUCO2020.
4-5 Market Place, Bexleyheath - were the offers above market value?
The offers were just under market value. The property had been on market for a long duration.
4-5 Market Place, Bexleyheath - did your client accept any offers?
No, bids had only been received for the subject property. My client was waiting upon further bids where I had informed them other clients were readying bids for the unit.
Sale of industrial property - did the CPO not complete?
My client received a sufficient offer to sell the property and proceeded to sell the property.
Sale of industrial property - why did the CPO not complete?
The CPO was in the consultation and engagement stage of the CPO process.
Sale of industrial property - what is your understanding of weighted average unexpired lease term?
The WAULT is the weighted average unexpired lease term remaining to the first break or expiry of a lease across across asset weighted by the contracted rent.
Sale of industrial property - did you receive any assistance with your valuation to determine market value?
No, I had the valuation checked by my manager.
