Purchase & Sale Flashcards

1
Q

What is the sales process from start to finish?

A

a. Get instructed
b. Provide terms of business and do AML checks
c. Marketing period
d. Agree deal
e. Request deeds from Land Registry
f. Send draft contract to buyer’s solicitors
g. Receive enquiries from solicitors and reply if necessary
h. Buyer’s solicitors approve of contract
i. Send contract to client to sign
j. Receive completion date from buyer’s solicitors
k. Contracts exchanged
l. Receive a draft transfer for approval from buyer’s solicitors
m. Approve draft transfer
n. Send finalised transfer to client for signature
o. Completion occurs

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2
Q

How does location, specification, condition, size, outdoor space and parking impact valuations?

A

All to do with demand. Greater demand equals greater value

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3
Q

What are the four methods of sale?

A

a. Private Treaty – A property is marketed for no set period with no closing date
b. Formal Tender – Used by statutory bodies, with a blind bid process. Bid cannot be changed after submission. Essentially, sealed bids are opened at a set date
c. Informal Tender – Used when there is a good level of interest in the property or when negotiations need to be bought to a close after marketing via private treaty, and best bids are not legally binding. Either party can withdraw
d. Auction – Where sale takes place at auction on a set date

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4
Q

What are the pros and cons of each method of sale?

A

a. Private Treaty – Flexible, parties control the process, confidential and vendor not under obligation to sell. Can be gazumped as a buyer, buyer/seller can pull out
b. Formal Tender – Vender has choice to accept offer of their choice. Bids cannot be changed after submission. Speeds up the process to exchange of contracts
c. Informal Tender – Vender has choice to accept offer of their choice and they can pull out. Buyer can also pull out
d. Auction – short timetable and more certainty of sale. Costs to promote, vendor can’t choose purchaser and lack of price confidentiality

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5
Q

Describe the flat being sold in Chelsea?

A

a. 1 bed 1 bath with a small balcony
b. £720,000
c. Victorian build
d. Solid brick wall header style bricks

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6
Q

What is the title and demise of a property?

A

a. Title deeds are documents which prove ownership of a property and the history of its ownership. It includes a property description, names of current and previous owners and any restrictions or easements

b. Demised premises refer to premises that have been transferred by lease

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7
Q

What AML checks did you run?

A

a. Proof of ownership
b. Proof of ID

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8
Q

What is the sales memoranda?

A

a. A written evidence that an offer has been accepted, as well a record of the amount of money that will be paid
b. It is a contract, but not legally binding

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9
Q

What were the relevant searches and enquiries?

A

a. Not sure that was between the solicitors
b. Searches and enquiries are questions to gather more info about the property – eg what direction does the garden face

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10
Q

Tell me about the RICS UK Residential Real Estate Agency Professional Statement 2017?

A

a. Mandatory professional statement
b. Provides summary of code of practice in all aspects of property marketing for residential property
c. Comprises the following material relating to residential agency matters:
i. Relevant estate agency legislation
ii. Standards and ethics
iii. Before securing instructions
iv. Property marketing
v. Acting for the vendor, purchaser and landlord
vi. Ending the instruction

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11
Q
  1. Tell me about the Estate Agents Act 1979?
A

a. The Estate Agents Act 1979 applies to:
i. The disposal or acquisition of an interest in land
ii. Freehold property
iii. Leasehold property with a capital value
iv. Land as well as buildings
b. It has SEVEN key principles:
i. Clarity as to the terms of the agency
ii. Honest and accuracy
iii. Agreement and liability for costs
iv. Openness regarding personal interests
v. Absence of discrimination
vi. Legal obligation to tell the client about offers received
vii. Follow RICS rules re client money handling – KEEP IT SEPARATE

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12
Q

What is the current rate of stamp duty?

A

a. Only applies to property over £250,000
b. The portion from £250,001 - £925,000 = 5%
c. The portion from 925,001 to £1.5m = 10%
d. The portion from £1.5m and above = 12%
e. No stamp duty up to £425,000 for FTBs

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13
Q

Do stamp duty rates change if you’re already a property owner?

A

a. 3% on top of the rates
b. If you have sold before buying this won’t be added on
c. But if you legally own 2 properties at the time, you will have to pay the extra charge

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14
Q

Do stamp duty rates change for non-UK residents?

A

a. To be a UK resident for stamp duty purposes you have to spend 183 days (6 months) during the 12 months before you purchase in the UK
b. If you’re not a resident, you pay a 2% surcharge for buying in England

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15
Q

What was the stamp duty rate at the time of your sale?

A

Same as above, the rates changed to the above in September 2022

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16
Q

What factors should you consider when choosing method of sale?

A

a. Client’s requirements
b. Level of demand
c. Time restrictions on sale
d. Market conditions

17
Q

Explain the full process of Formal Tender?

A

a. Full marketing, including legal pack, provided
b. Letter send to all prospective purchasers setting out info required
c. Applicants bid blindly in prescribed form
d. All bids opened in front of client/line manager/witness
e. No opportunity to change bid amount
f. Usually, no immediate change of contracts
g. Can speed up process to exchange of contracts

18
Q

Explain the full process of Informal Tender?

A

a. Agent invited all parties to submit ‘best and final’ bid in accordance with prescribed timetable
b. All bids opened in front of client/line manager/witness
c. not legally binding upon parties, either part can withdraw

19
Q

What are the differences between formal and informal tender?

A

a. Formal tender:
i. Single chance for purchaser
ii. High level of accountability
iii. No opportunity for further bid
iv. Highest figure is accepted
v. Is possible for formal tender to lead to contract for sale
b. Informal Tender:
i. Used during private treaty
ii. Further negotiations can follow
iii. Less onerous terms/conditions
iv. Used as negotiating mechanism to invite all interested parties

20
Q

Explain the full process of an auction?

A

a. Terms of engagement agreed
b. Conflict of interest/AML checks
c. Clarity for auctioneer’s right to refuse bids, regulate incremental bids and accept proxy/internet votes
d. Full due diligence
e. All relevant documentation to be available
f. Conditions of sale/memorandum of sale
g. Reserve price agreed with vendor
h. Contracts exchanged at fall of the gavel
i. Auction particulars to be drafted in accordance with Consumer Protection Regulation 2008 and Misrepresentation Act 1967

21
Q

What actions are required by the purchaser before the sale day?

A

a. View property and consider structural survey
b. Proper legal advice & DD
c. Arrange 10% deposit
d. Provide ID for ML purposes

22
Q

What must a sales instruction clearly set out?

A

a. Agency basis
b. Agency rights
c. Proposed fee
d. Marketing costs & disbursements
e. Confirmation of no conflict of interest
f. ML regulation requirements
g. Timescale for payment of fee
h. Details of firm’s complaints handling procedure

23
Q

What is a ready, willing and able clause and does your firm have one?

A

If applicant is ready to buy but vendor withdraws then agent may charge abortive fee

24
Q

What are your firms fees?

A

1.5%-2.5%

25
Q

What did you include in the sales agreement?

A

a. Property address and details (freehold or leasehold, is parking included etc)
b. Sale price
c. Agency type
d. Fee
e. Details of owner
f. Right to cancel details (cooling off period)

26
Q

Describe the sales market in Chelsea?

A

a. Very quiet due to wider economic factors – high inflation and rising cost of living
b. Conflict between Russia and Ukraine led to a quieter market due to government sanctions

27
Q

Describe the sales market in Canary Wharf?

A

a. Not as strong as lettings and quiet due to high inflation and rising cost of living but certainly more active than other parts of the country
b. Couple of high spec highrises that would normally be snapped up but they did remain on the market throughout my time there due to high interest rates and subsequent caution from investors

28
Q

What was the old stamp duty brackets?

A

a. Only applies to property over £125,000
b. The portion from £125,001 - £250,000 = 2%
c. The portion from £250,001 - £925,000 = 5%
d. The portion from 925,001 to £1.5m = 10%
e. The portion from £1.5m and above = 12%
f. No stamp duty up to £300,000 for FTBs

29
Q

What period are the current stamp duty cuts from and to?

A

23rd Sep 2022 – 31st March 2025

30
Q

What is the difference between Sole Agency and Sole Selling Rights?

A

a. SSR – fee even if vendor introduces buyer
b. Sole agency – you’re the only agent marketing that property and only get fee if you find a buyer

31
Q

What legislation do you need to be aware of when uploading marketing particulars?

A
  • Consumer protection regulations 2008