Purchase & Sale Flashcards
What are four main methods of sale?
Auction
Formal Tender
Informal Tender
Private Treaty
Pros for each method of sale
Auction - quick & useful when a property is unlikely to gain good interest in the open market.
Formal tender - accountability & binding.
Informal tender - ability to negotiate further & no liability on client to accept highest bids.
Private treaty - control & inexpensive.
Cons for each method of sale
Auction - cost & lack of certainty of price.
Formal Tender - no opportunity to negotiate further.
Informal Tender - bidder can withdraw at any point.
Private Treaty - late decisions not to buy.
What factors do you believe influence value?
Location
Condition
Specification
Tenant’s Covenant
How do you adhere to to RICS Global Estate Agency & Brokerage Professional Statement, 2016?
Being honest and transparent.
Avoid misleading.
Disclose C of I clearly and promptly.
Carry out DD and verify all property info.
Act in the client’s best interests.
Terms of business are agreed
Hold client money properly
Ensure adequate PII.
What were the procedures you followed for DD in the sale of Sheffield?
Obtained full written instructions.
KYC checks
Inspected property.
Checked title.
Carried out AML checks.
Ensured all information was verified.
Can you explain the process of the inspection and measurement of the unit in Sheffield?
Safety - arrange inspection, confirmed PPE, informed team of whereabouts.
Inspected local area - new build development, noted boards.
External inspection - noted access, building construction, condition, parking, site boundary.
Internal inspection - noted layout, spec, services, defects, fixtures, fittings etc.
Measurement - measured on a GIA basis, measured yard depth.
What was the specification of the industrial unit in Sheffield?
55,000 sqft
7m eaves
3 roller shutter doors
1996 build
25m yard depth
How did you analyse the comparable evidence from local agents and online platforms for Sheffield?
With reference to HofE
ERV - Compared lease terms, location, size, spec, condition.
Yield - Compared tenant covenant, location, size, spec, condition.
RACK RENTED - New 15 year lease.
Could you please explain the factors you considered when establishing a suitable sale price for the Sheffield unit?
Current market conditions - interest / current economic trend.
Location
Spec and condition
Lease terms
Planning
Legal & title issues.
Method of sale.
What was involved in the process of drafting marketing particulars?
Verifying information with client
Ensuring the brochure was drafted in accordance with Misrepresentation Act 1967.
Checking drafts with client - any amendments.
Obtaining lease details.
When you carried out conflicts of interest and anti-money laundering checks for the Nottingham project, what were you looking for?
Conflicts - party conflict - e.g. letting a similar building elsewhere, personal or financial interest, confidential information conflict.
AML - red flags: can’t confirm source of funds, high risk country, use of offshore accounts.
Why did you carry out conflicts of interest and AML checks?
To ensure I could when accept instruction and maintain professional integrity and compliance with legal and regulatory requirements.
Protect reputation.
Can you provide more details about the disposal report you assisted in writing for the Nottingham property?
Provided clear professional summary to support decision making.
Property details
Lease details
Market Commentary & view on quoting price
Marketing strategy
Included market research, view on market rent and quoting sale price.
What information did you include in the sales brochure for the Nottingham warehouse?
Address
Lease Details
Property Details - specification, accommodation, site cover, measurements, eaves height etc.
Maps and pics
Quoting price
Contact details
Misrepresentation Act 1967 statement.
How did you ensure compliance with the Misrepresentation Act 1967 throughout the sales process?
Ensured to verify all information and include statement in brochure.
Keep records of information sources and communication with client
Use disclaimers
Avoid omissions.
What was the primary driving factor for the client’s acquisition of an industrial property in Peterlee?
Let to a strong tenant and asset management opportunity with an upcoming rent review.
What were the key findings from your inspection and measurement of the property on a GIA basis?
Building was in good condition and tenant had extensive maintenance contract to ensure compliance with lease.
There were some outstanding alterations which needed to be documented.
The unit was a key site for their wider campus on the same estate.
The measurements matched/were similar to those used in marketing materials.
What factors were considered when compiling the acquisition report for Peterlee and deciding on a recommended purchase price?
SWOT analysis
Factors considered - covenant strength, any works to be done, location, tenure, lease details, potential future development, use. AM opportunities, yield.
How did you monitor the transaction process and communicate updates to the necessary parties?
Regular meetings with client.
Direct contact with solicitors.
What were the main asset management initiatives that remained uncompleted at the time of acquisition (Peterlee)?
Document alterations under LTA.
What were your client’s primary requirements for the asset located in the South East, particularly Dartford?
Wanted more exposure in South East
Good covenant
Possible AM opportunities
Targeting yields between 6 - 6.25%.
What observations did you make during your inspection of the unit in Dartford that led to a recommendation for an EPC assessor?
I identified gas heaters within the warehouse.
I knew the EPC had been completed prior to the EPC regulation changes.
What factors were involved in your advice that the investment opportunity met their asset management objectives (Dartford)?
Covenant Strength
Yield
Location
Lease terms
