Purchase & Sale

Question 1

Why did you recommend to the client to sell via sales contract

Answer 1

The agreed deal was complex and therefore I considered that a sales contract was approriate as it’s a more extensive agreement outlining the rights and obligations of the seller and buyer

Question 2

(Childrens Ready Meal) - What documents did you/do you include in the sales pack

Answer 2

Financial documents
Background business info
Product/Business details
Assets to be included.

Question 3

Methods for disposal

Answer 3

Private treaty
Auction
Infromal tender
Formal tender

Question 4

Info on Private treaty sale

Answer 4

A sale by Private Treaty involves the open marketing of assets, with offers from interested parties invited at any time.

The vendor may choose to enter negotiations early in the marketing period, or indeed wait to compare offers between interested parties.

On the acceptance of an offer, the transaction proceeds subject to contract.

Flexibility means that a sale like this can be eventually concluded by a ‘Best’ or ‘Best and final’ offers scenario.

Question 5

Info on auction sales

Answer 5

With a sale by auction, a asset is openly marketed as ‘For sale by auction’, rather than at a fixed price.

It is common for viewing days to be held to accommodate interested parties, to allow any prospective purchasers to undertaken due diligence prior to the auction.

Interested parties will attend a formal auction, conducted by an auctioneer, at which the individual who bids highest during the auction will purchase the asset.

The successful bidder is legally bound to purchase the asset on the fall of the hammer. The purchase of a asset at auction incurs commission fees for both buyers and sellers.

Question 6

Informal tender

Answer 6

In the process known as ‘For Sale by Informal Tender’ an asset is openly marketed for a period of time, with a date set for the receipt of written offers on a tender form.

The vendor may then compare all received offers on a ‘like for like’ basis.

The vendor is not bound to accept the highest, or indeed any of the offers, and also retains the flexibility to enter further negotiations with an interested party to conclude the sale if so desired.

The offer is not legally binding and the transaction progresses subject to contract.

This method of sale encourages would-be purchasers to commit to a sale, and to conclude within a predetermined timescale as set out at the start of the tender process. But it also maintains a degree flexibility with regard to timescales and further negotiations.

Question 7

Online Auctions

Answer 7

A popular and trusted method for selling assets quickly, our online auctions have a global reach and low cost. Our online platform auctions: consumer goods, electrical items, commercial vehicles, industrial plant equipment or anything else. Each lot is sold individually to the highest bidder in an efficient end to end process.

Question 8

Private Treaty

Answer 8

For niche, complex or high value assets (where markets and buyers are limited) our expert negotiators have the market insight to sell your asset at the highest possible price. Sometimes referred to as a private treaty sale, this involves fixing a guide sale price and negotiating on an individual basis with interested parties.

Question 9

Tender sale

Answer 9

Specialist assets in a limited market may be suitable for a tender sale. This is a type of auction where an asset is sold with a deadline date for bids. Interested parties have until that date to submit their best offer, without having seen anyone else’s bidding activity.

Question 10

What is an NDA

Answer 10

A legal document which allows you to share confidential information for the purpose forumlating an offer.

Not required if no confidential information is supplied.

Question 11

Have the RICS provided any profesional statements in relation to purchase and sale

Answer 11

UK commercial real estate agency 1st edition, 2016

Real estate agency and brokerage 3rd edition, 2016

Both documents set out ethics, professional standards and the relationship between the buyer and seller

Question 12

Misrepresentation Act 1967

Answer 12

The Misrepresentation Act exists to protect consumers from false or fraudulent claims that induce you into buying something or entering into a contract. It also allows you to claim damages.

Question 13

Business Protection from Misleading Marketing Regulations 2008 (when dealing with businesses)

Answer 13

The Business Protection from Misleading Marketing Regulations 2008 (BPRs) prohibit misleading business-to-business advertising and impose further restrictions on how businesses compare their products to rival products from other companies.

If you are selling to businesses the Regulations prohibit you from giving misleading information to the other business that would deceive that business and affect, or be likely to affect, its economic behaviour. You are also prohibited from giving misleading information that injures, or is likely to injure, a competitor.

Question 14

Equality Act 2010

Answer 14

The Equality Act 2010 legally protects people from discrimination in the workplace and in wider society.

Question 15

(Restaurant/Event Venue) - Peter Anderson’s Sister - what method of sale did you advise and why

Answer 15

I recommended an online auction approach from site.

I recommended an auction because of a time restrcition of 6 weeks, which they had already given notice to the landlord.

I recommended fromsite because the removal costs would have been significant.

Question 16

What did/do you include in the disposal report?

Answer 16

Brief confirmation of the assets to be included
Method of sale and platform to be used.
Marketing activites. 
Fee details
Time frame 
Details of the funds will be held

Question 17

Why is it important for the client to formally agree a vendor form/disposal report.

Answer 17

It sets out what actvities/services will be provided and ensures the client agrees to these. Prevents complaints in the future.

Question 18

Whats the difference between a vendor form and disposal report.

Answer 18

A disposal report is a more detailed and specific document where the client requires more advice.

A vendor form is a more standised document commonly where a private vendor enters assets into a pre exsisting auction.

Question 19

(Childrens Ready Meal) - What did the assets consist of?

Answer 19

Physical assets - small quantity of IT equipment and bespoke tooling.

Intellectual assets included; domain names, trademarks, images.

Question 20

(Childrens Ready Meal) - What sales method did you use?

Answer 20

Informal tender - I set a specified date for closing for offers to be made by. I recommended this method to the client as there was no price set, it was speculative so it allowed us to receive their best offer.

Question 21

(Childrens Ready Meal) What were the complexities of the companys situation?

Answer 21

Their last batch of stock was about to be requested by the supermarkets, leaving no further stock for future supply, no contracts - were on a approved supplier panel with no gurrantee of quantity order.

Question 22

(Childrens Ready Meal) What confidential information did you remove from the sales pack to maintain value.

Answer 22

Details such as customer name - was replaced with customer 1 (National supermarket chain)

Question 23

(Shopping Mill, Chorley) You advised that an auction was not suitable. What would have been a more approriate sales method.

Answer 23

An informal tender. The client would have been able to set a specified timeframe for conclusion of offers and the items would be purchased by one purchaser reducing costs.

Question 24

Estate Agents Act 1979

Answer 24

Its purpose is to make sure that you act in the best interests of your clients andthat both buyers and sellers are treated honestly, fairly and promptly.

It states that all offers must be reported to the client and buyers not not be discriminated against.

The need to outline any fees and charges.

How money is kept secure in the client account.

Question 25

(Italian restaurant chain, north west) - Information

Answer 25

Informal tender - specified time period.

Question 26

(Italian restaurant chain, north west) - What sales advice did you consider when providing the advice

Answer 26

Not only did I consider the price but I also considered

Whether the parties had carried out any due diligence
Were they a connected party who were more familar with the situation.
What was there timescale for completition.