Scenario B

Question 1

Which method of sale and why?

Answer 1

4 methods:

• auctions
• private treaty
• formal tender
• informal tender

Auction- they are good because they are a quick and efficient way of disposing of freehold interest. They also stick to assured timescales and competitive bidding can lead to higher prices. Suggest a reserve price in which the auction cannot go below to ensure that all parties are happy with the transaction.

Question 2

What market strategies can be used?

Answer 2

Marketing tools such as print marketing, social media, search engine marketing, email marketing and content marketing can be used to show off your product.

The information needed before marketing includes, client objectives, history of building, any refurbishments needed? Services, SWOT analysis and quoting terms.

Question 3

Information required for due diligence

Answer 3

RICS states that all members should carry out their professional work with fue skill, due diligence and with proper regard for technical standards. This is also in the RICS rules of conduct.
Pre-analysis of financials of the business.
Full check of documents
Full analysis of business plans
Risk analysis
Analyse purpose of project

Question 4

Conflict of interest- can firm act given that the CFOs daughter works in your firm?

Answer 4

RICS states that firms and members should carry out their work and avoid all conflicts of interest.
In terms of our firm we can act as we will put an information barrier in place which will ensure no confidential information passes to the CFOs daughter

Question 5

What insurances does your company hold?

Answer 5

PIinsuranceis mandatory in order to protect client, 3rd party and firm from claims. Minimum PI insurance is £250,000 (where a firms income is set to be less than £100,000 in the preceding year) and maximum insurance is £1,000,000 (where firms income is set to be more than £200,000 in the processing year)

Question 6

Terms of engagement

Answer 6

Contains details of instruction, method in which fees are calculated, did-instruction arrangements, client complaints procedure, abortive fees and information on how and when invoices should be paid.

Terms of engagement show good financial management. It is use good practice as both parties can use it as a central point if any trouble arises. They are also necessary in RICS rules of conduct and estate agency act 1979

Question 7

Will current agents be able to claim fees

Answer 7

They will be able to claim fees on anything that they have completed to date. Fees will include 10-12% of first years rent on lettings, 5% of first years rent for rent reviews and 7.5% of first years rent on leaseholds

Question 8

Relevant law

Answer 8

Must follow RICS Global Real Estate agency + brokerage standards 2016 which apply to buying, selling, letting and renting real estate.

Must follow auctioneers act 1845 + current agency legislation. RICS rules of conduct 2007 and estate agency act 1979 which promotes honesty and promotes honesty with issues regarding conflicts of interest and accuracy with an absence of discrimination and a requirement to hold client money separate.

Also anti bribery act in relation to gifts