Purchase and Sale Flashcards
What are the four methods of sale?
Auction
Private treaty
Informal tender
Formal tender
What are the pros and cons of each method of sale?
Auction: quick, no negotiations
Private treaty: confidential, flexible but potential for sale to fall through
Informal: Transparent, negotiable, can be slow as not legally binding
Formal: High level of accountability, no chance for applicants to increase bids
What are the differences between informal and formal tender?
Informal isn’t legally binding and allows room for negotiations to take place.
Formal is legally binding as soon as the bid is accepted.
What are the three types of agency?
Sole = just 1
Joint = 2+ agents, split fee
Multiple = only successful agent gets fee
What must you state in the Terms of Business?
Agency type
Agency rights
Fee
Costs
Confirmation of COI
Money laundering regs
Timescale for fee payment
Details of complaints handling procedure
Rights to cancel
EPC
What are the principles of the Estates Agent Act 1979?
Clarity to agent terms (S18)
Honesty
Liability for costs
Openness regarding personal interests (S21)
Legal obligation to tell client about all offers
Keep clients money separate
What are the penalties of breaching the Estate Agents Act 1979?
Warning order - written warning
Prohibition order - take away agents right to practice
What code of practice would you refer to in agency?
RICS UK Residential Real Estate Agency Professional Statement 2017 The Blue Book
What is the code of practice purpose?
Summaries the best practice for marketing for residential property.
Describe to me the Misrepresentation Act 1967?
Relates to the misrepresentation of fact made by a party during pre contractual enquires which can induce a property to purchase.
What are the penalties of breaching the Misrepresentation Act 1967?
Can be sued for any financial damages, it is a civil offence not a criminal.
Can you give me an example of good communication skills?
Good communication skills may include:
Agreeing clients objectives and negotiating a strategy before negotiations
Deciding what points are non negotiable and what points are.
Walk away when you need to
When would you use formal tender and auction?
Formal = public sector properties
Auction = quick sales for unique properties which are hard to value
What are the consequences of breaching Anti Money Laundering?
What are the limits on accepting cash under Anti Money Laundering?
RICS state that companies should not accept 10,000 euros but my companies policy is that we do not accept cash
Why is informal tender usually the preferred method of sale?
Due to working in a regulated sector, it is out duty to achieve best value for our clients. Using informal tender allows negotiations on multiple bids allowing the property to achieve best value
What are the key points in the Estate Agents Act 1979?
What is private treaty?
Common method of sale
Property marketed openly with the use of marketing materials and online website portals to afford a potential purchaser to ‘treat’ with the seller.
Parties free to negotiate in their own time and without commitment in the open market
How should viewings be appraoched in residential agency?
The way they should be approached should be agreed in the marketing strategy with the client.
What is the occupier of the property is not your client?
Agree arrangements with the occupier beforehand. eg 24 hours notice to the tenant.
What should the client be advised about in regards to viewings?
Date
Time
Records of who went
Feedback within 3 working days
How should viewings be carried out?
By appointment - so arrange in advance with client or occupier
