Purchase & Sale Flashcards
What commission is charged when selling a property at Auction?
Depending on the circumstances 2-3%
What are the main Heads of Terms found in Agency Terms of Business?
- Identification of the agent
- Identification of the client
- Agency fees
- Settlement of fees
- EPCs
- Sale Board
- Withdrawal charges
- Marketing Expenses
- Termination of Agency
- Access to premises
- Data Protection
- Money Laundering
- Complaints handling procedure
- Copyright
- Signatures
What legislation relates to property agency?
- Estate Agents Act 1979
- Misrepresentation Act 1967
-The Consumer Protection from Unfair Trading Regulations 2008
What is the Estate Agents Act 1979?
- Regulates your work as an estate agent.
- Its purpose is to make sure that you act in the best interests of your clients and that both buyers and sellers are treated honestly, fairly and promptly.
How does a guide and reserve price differ?
•Reserve price is confidential whereas a guide price is not.
•Reserve price needs to be within 10% of the guide price.
Talk me through the advantages and disadvantages of each method of sale.
Advantages;
Private Treaty = Ability to negotiate, greater control and flexibility
Formal Tender = Legally binding, control, competition, set time frame, no obligation to sell
Informal Tender = Negotiate, set time frame, competition, control, no obligation to sell
Auction = Quick, transparent, 10% deposit at fall of hammer
Disadvantages;
Private Treaty = Long, potential gazumping, withdrawals and associated abortive costs.
Formal Tender = No negotiating, complex, can’t withdraw.
Informal Tender = Not legally binding, withdrawals and associated abortive costs.
Auction = No control, deter some buyers, not confidential
What are the different types of interest that can be sold or purchased?
- Freehold = fee simple absolute in possession.
- Leasehold = a term of years absolute.
What are the Property Consumer from Unfair Trading Regulations 2008 (CRPs)?
- Regulations that control descriptions used by agents.
- Create criminal offences for traders that breach them.
- Prohibits ‘misleading actions’ and information.
- Duty bound to declare everything you are aware of.
Why was the land at Great Ness sold using Private Treaty?
- Maintain control over the sales process and who they sold to.
- Time to consider offers.
- Control over who you sell to.
- Maintain ability to negotiate over practicalities if necessary.
- Inline with their objectives.
What does ‘Buyer Beware’ mean?
- ‘Caveat Emptor’ Latin phrase.
- Means that the responsibility is on the buyer to find out everything they need to know about the property.
What is the Misrepresentation Act 1967?
-Agents should not misrepresent information.
- Agents have a duty of care to check information is reliable.
- 3 types = Fraudulent, Negligent & Innocent
What are the new Price on Application Rules?
- In May 2022 National Trading Standards deemed POA unlawful in property listings.
- Contravenes consumer protection.
- Misleading as it with holds or in some cases masks, the asking price from consumers.
What is Stamp Duty Land Tax? And what are the rates?
SDLT = A tax payable upon the purchase of a property over a certain price.
- Non residential;
£150,000 = 0%
Next £100,000 = 2%
Remainder = 5% - Residential;
Up to £250,000 = 0%
Next £675,000 = 5%
Next £575,000 = 10%
Remainder = 12%
What is the legal process from instruction to completion?
- Anti-money laundering checks
- Proof of identity
- TOE
- Proof of ownership
- EPC
- Correct info for marketing (Misrepresentation Act 1967 * Consumer Protection from Unfair Trading Regs 2008)
- Proof of identity on purchaser
- Anti-money laundering checks on purchaser
- Credit checks on purchaser
What is CGT? and what are the rates?
- CGT is a tax payable when you sell or dispose of a asset that’s increased in value.
Basic - 10 & 20%
Residential - 18 & 28%
CGT Allowance = £12,300
Threshold for basic = £37,700
