Purchase and Sale/Market Appraisal (L3/2) Flashcards
What is the Estate Agents Act 1979?
regulates work as an estate agent. make sure that an agent works in the best interests of your clients, and that both buyers and sellers are treated honestly, fairly and promptly.
What is the Misreprisentation Act 1967?
helps to protect buyers who are persuaded to buy something that isn’t as it seems eg not disclosing things accurately when asked questions about items, like structural defects or disputes with neighbours, may result in a misrepresentation claim. Civil offence, can be avoided with a disclaimer (in brochures)
What is Consumer Protection Regs?
control descriptions used by estate agents and letting agents. They create criminal offences for traders that breach them. Criminal offence
What are the different methods of sale?
Private treaty, auction, informal and formal tender
What are the different types of agency?
Sole agent, joint agent and multiple agent
what is private treaty?
most popular method of sale, without commitment from seller and has full flexibility, control, confidentiality and not obligation to sell. risk of gazumping or gazundering
what is informal tender?
used when there is a good level of interest, either at the off or to bring negotations to a close. Requests best bids from parties, but not legally binding and parties can still withdraw. bids must be opened in front of client or independent witness. in both this and formal tenders, the client is under no obligation to sell to the highest, or any bidder, but INFORMAL can be further negotiated
what is formal tender?
(sealed bids) usually used by statutory bodies for control and transparency over the process. there is no further bidding and the offer can lead directly to exchange of contracts.
What is gazumping
when the seller accepts an offer verbally, but then is offered a higher bid
what is gazundering?
after agreeing a sale, the purchaser substantially reduces their offer
what are sole selling rights?
when an appointed agent is the onyl person with the right to sell and is entitled to full commission. the seller may be liable to fees even if the agent doesn’t find the buyer, and if the house is sold via another agent but the buyer is instructed by the first agent. the agentsmust make seller aware that this is the deal they are entering into.
what is the difference between sole agency and sole selling rights
sole agency just means that they are the only agent instructed, but doesn’t necessarily mean they would be entitled to the commission if they did not instruct the buyer.
what is the current bank of england base rate
5.25%
what are the current mortgage rates?
vary between 5.5% - 7% depending on the bank, whether or not its a fixed rate and length of term
what is a fixed-rate mortgage
guarantees the same monthly repayments for the term. means you aren’t affected by increasing base rates, but equally means that you don’t benefit when rates go down