Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

APC > Purchase & Sale > Flashcards

Purchase & Sale Flashcards

1
Q

Sole selling rights

A

Means remuneration will be payable if contracts exchange in the period when sole selling rights exist even if the purchaser is not found by the agent/the vendor themselves. Fee is also due after sole selling rights period if the property is sold to a purchaser who was introduced by the firm during the period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Sole agency

A

Remuneration is due if contracts exchanged with a purchaser introduced by the firm during the sole agency period or with a purchaser introduced by another agent during the period if joint sole agency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

EPC requirements

A

Must request it prior to marketing and make all reasonable efforts to provide it within 7 days and with a maximum of 28 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Terms of engagement

A

Property address
Name and contact of the client
CHP
Type of agency with definitions
Details of fees - how they are calculated, when they are triggered
Type of disposal
Marketing programme
Abortive fees
Viewing arrangements
EPC
Method of reporting offers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Marketing strategy to include

A

Analysis of current local market
Recommended sale method and reasons
Marketing materials
Budget
Documents to be provided
Recommended asking price and likely selling price
Opinion of likely timescales from marketing to completion
Approach to viewings
Use of data rooms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Particulars to include

A

Disclosure of any material factors e.g. contamination, asbestos
Location/address
Tenure
Services
Amenities
Accommodation and sizes
Planning consents
Caveat regarding prospective purchaser satisfying themselves of the accuracy of the information
Photos (dated)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Is there RICS guidance on conflicts in commercial agency

A

Conflicts of interest - UK commercial property market investment agency 2017

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Dual agency

A

Where an agent has a contractual agency relationship with both buyer and seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Multiple introductions

A

Where an agent has competing contractual relationships simultaneously with several buyers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Process if agency approached by another party to provide incremental advice

A

Information barrier
Where there is an exclusive instruction to purchase then informed consent must be sought before providing incremental advice to another buyer
If acting in disposal then just have to notify before providing incremental advice to a prospective purchaser

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Estate Agents Act 1979 7 main principles

A

Clarity as to terms of agency
Honesty and accuracy
Disclosure of personal interests
Specificity around costs and fees
Not discriminating
Obligation to report all offers received
Obligation to keep client money safe

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Penalties under the Estate Agents Act 1979

A

Policed but National Trading Standards Estate & Letting Agency Team
Can have right to practice taken away and or a fine, or a warning order

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Consumer Protection from Unfair Trading Regulations 2008

A

Duty to clients, potential clients, viewers and buyers to give accurate and necessary material information and not make misdescriptions/omissions
Not to exert undue pressure
Penalty is unlimited fine, prohibition and up to 2 years in prison
(Applied to sales and lettings)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Misrepresentation Act 1967

A

Relates to misrepresentations or false statements pre-contract which could impact a parties decision to purchase
Agent has a duty of care to check that information is reliable
Civil offence and can be sued for damages/contract rescinded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Test of reasonableness (in believing misrepresented statement to be true)

A

Foreseeability (of damage)
Proximity (of the relationship)
Fairness

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Considerations in deciding appropriate method of sale

A

Client objectives
Public accountability
Current and likely market conditions
Level of demand for the property / target market
Timing requirements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Private treaty advantages and disadvantages

A

A:
Flexibility
Parties control the process
Vendor not obliged to sell
Confidential
D:
Potential for gazundering
Late decisions not to buy and associated abortive costs

18
Q

Informal tender advantages and disadvantages

A

A:
Good tool where there is a good level of interest to bring negotiations to a close and get best bids
Not legally binding so can withdraw up to the point of contract
D:
Not same level of accountability as formal

19
Q

What to ask parties to provide when inviting best bids

A

Required time and date of offer
Solicitor details
Confirmation of any finance arrangement
Details of any conditions
Confirmation will not accept offers of a variable nature
Vendor reserves the right not to accept the highest or any offer

20
Q

Formal tender advantages and disadvantages

A

A:
Transparent process
Public accountability
D:
Full marketing material and comprehensive legal pack required in advance
Applicants bid once

21
Q

Difference between formal and informal tender

A

Formal tender
Single chance to bid
High accountability
Detailed T&Cs prior
Can lead directly to a contract for sale

Informal tender
Can be used to bring private treaty negotiations to a close
Further negotiations can follow
Vendor typically reserves right not to accept highest or any offer

22
Q

Auction advantages and disadvantages

A

A:
Relatively short timetable
Certainty of sale as long as reserve price achieved
Useful for an unusual property which is hard to value
Drives competitive tension
D:
Cost of promotion and publicity
Lack of confidentiality over price achieved
Vendor cannot choose purchaser
Intensive nature of short marketing period

23
Q

What are the main points covered in UK Commercial Estate Agency PS 2016?

A

Being honest and transparent
Avoid conflicts
Not discriminating
Holding client money separately
Marketing particulars
Marketing strategy - realistic assessment of price, approach to viewings
EPC requirements

24
Q

Property acquisition key steps

A

Provide regular updates to the client and report which properties have been considered as well as which discarded and why
Send copies of any offers sent/accepted to your client

25
Q

When does the Estate Agency Act 1979 apply?

A

Acquisition or disposal of an interest in land, freehold property and leasehold property with a capital value

26
Q

When does marketing signage require planning permission

A

Non-residential boards over 2 square metres if flat and 2.3 square metres is V board
If illumined
If on a listed building / in a conservation area
Only one per building
Must not project more than 1m
Must remove by 14 days after completion

27
Q

What is a REIT

A

a company tax resident in the UK which is listed on a stock exchange and has 75% of its business in property investment

28
Q

Which property is required to be registered with Land Registry?

A

All freeholds and leases with terms over 7 years

29
Q

Auction procedure

A

Clarify right to refuse bids and regulation of bidding including proxy, telephone and postal bids
Full DD
All documentation available to prospective purchasers prior
Determine a reserve price
Contracts exchanged at fall of the gavel

30
Q

What’s the timeline of a sales instruction

A

Check competence and independence
AML checks
ToE - signed
Gather information
DD
Inspect
Research market and prepare marketing report
Draft particulars and have them approved
Undertake marketing campaign
Negotiate
Draft HoTs and instruct solicitors
Liaise with vendors solicitor and assist with queries
Invoice
Retain file

31
Q

What’s the timeline of an acquisition instruction

A

Check competence and independence
AML check
ToE
Understand client objectives and agree search parameters
Value potential property
DD
Negotiation and offer - provide evidence of track record, source of funds, timings and conditions, solicitors details

32
Q

What is typically contained in HoTs

A

Property
Title
Buyer
Seller
Solicitors
Confirmation regarding costs
Timescales for exchange and completion
Conditions
VAT

33
Q

What is the difference between terms of engagement for agency and valuation?

A

Valuation must include the purpose of the valuation, valuation date, special assumptions, confirmation of valuation being undertaken in accordance with IVS
For agency should include the type of agency with definitions, marketing programme, EPC requirement, method of reporting offers

34
Q

What is the case law related to disclaimers relevant to the Misrepresentation Act 1967

A

Hedley Byrne & Co v Heller & Partners 1964 established that exclusion (disclaimer) clauses will be effective if they are fair and reasonable (see reasonableness test)

35
Q

What is the key legislation relating the purchase and sale?

A

Estate Agents Act 1979
Consumer Protection Regulations 2008
Misrepresentation Act 1967
Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017

36
Q

What must you have in place before accepting an instruction

A

Competence
Conflict
AML/KYC
Signed ToE

37
Q

Types of misrepresentation under the misrepresentation act

A

Fraudulent - deliberately made knowing it was false
Negligent - statement made carelessly without reasonable grounds for believing it’s true
Innocent - false statement made entirely without fault (can’t be sued for damages)

38
Q

What AML checks do you carry out?

A

Proof of identify and address
Company name, number and registered office
Title documents
Compliance team undertake further checks in terms of beneficial ownership, media score, sanctions checks, ownership and management type

39
Q

Can you advise a client to accept an offer?

A

No I just provide an assessment of the quality of the offers based on the facts and it is the client’s decision

40
Q

What is an option agreement?

A

Where a prospective buyer, typically a developer, enters into an agreement with a landowner for the right to buy their property. The option will last for a specific period

APC (17 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions