Purchase & Sale Flashcards
1
Q
What Methods of Sale are there?
A
- Private Treaty
- Public Auction
- Private Auction
- Formal/Informal Tender
- Public/Private Tender
2
Q
What is sale by Private Treaty?
A
- Private treaty is where descriptive details are provided stating an asking price.
- The details are circulated to potential buyers.
- Viewings arranged with potential offers submitted to Vendors.
- If multiple offers received then may ask for Best & Final Offers
3
Q
What is a sale by Auction?
A
- A property is advertised by Auction.
- There is no fixed price (but may state a guide price in brochure)
- Highest bidder buys the property
- Bidder can be in the room, online or by telephone
- Bidder is legally bound once the hammer falls.
- Pays a Deposit there an then say 10%
- Completes normally 4 weeks after.
- Buyer has to arrange finance and make any enquiries including Surveys
4
Q
When would you use an Auction?
A
- Where a property is likely to have strong competition
- Properties that are not mortgageable
- Properties that appeal to cash buyers
- Building Plots/Development Land
- Properties requiring renovation
- Properties with serious defects
- Properties with short or defective leases.
- Properties where it is hard to predict a likely sale price (maybe very unique)
5
Q
What is an Informal Tender?
A
- Where an asking price woll not be stated
- A guide price may be given
- Offers are invited in writing by sealed bids and a closing date stated.
- Offers are all open at the same time.
- Vendor is not committed to accept the highest or any offer
- Offer is not binding as it is Subject to Contract
6
Q
When do you use an Informal Tender?
A
- On properties where competition is strong
- Properties that require modernisation
- Where a closure date is required
- Properties that are of a significant interest to investors/developers
7
Q
What is a sale by Formal Tender?
A
- Same as Infromal Tender where the property is marketed
- A price is not stated so will be offers invited.
- A deadline for offers will be advertised
- Bids will be sealed and opened at the same time.
- However, each bid will have a full legal contract for sale and all bids have to have a bankers draft as a deposit on the contract
- Once best bid has been accepted the bankers draft is accepted and contracts are automatically exchanged.
- Completion will take place on the appointed date.
- If the purchaser fails to complete then the deposit is lost and further costs may be incurred
8
Q
When is a Formal Tender used?
A
- Gennerally rarely used due to its complexity
- Possibly used on some land transfers
9
Q
What types of Agency Selling is there?
A
- Sole Agency
- Sole Selling rights
- Multi Agency
- Joint Agency
- Sub-Agency
- No Sale, No Fee (Online Agents)
10
Q
What is Sole Agency?
A
- A Sole Agency is where there is one Agency instrructed to sell a property.
- The Agent is entitled to a fee if they introduce a purchaser whilst the agents agreement is in force.
- The agent may still be entitled to commission even though their tie-in period has come to an end
11
Q
What is Sole Selling Rights?
A
- Is where the vendor has to pay the agent even if they do not sell the property.
12
Q
What is Multi Agency?
A
- This is where you can market a property with several agents.
- The commission will normally be higher for this than sole agency.
- You will only pay one commission to the Actual Agent who introduces the purchaser.
13
Q
What is Joint Agency?
A
- Joint agency is similar to multi agency.
- However as joint agents the agents both receive a commission no matter which of the agents sells the property.
14
Q
What is Sub-Agency?
A
- Sub Agency is where one agent sub instructs another agent.
- This can be that one agent is in a different location.
- The sub agent will be entitled to a proportion of the overall commission.
15
Q
What legislation covers Estate Agency Signs?
A
- The Town and Country Planning (Control of Advertisments) (England) Regulations 2007.
