Auctioneering Flashcards
(117 cards)
1
Q
Talk me through the process of an auction
A
- Conflicts
- Competence
- Appraise
- T of E – agree guide and reserve, sign
- AML checks
- Inspect – measure, photos, description check. Make recommendation as to guide and reserve.
- Receive any special conditions/addendums from solicitors
- Publish particulars and catalogue
- Auction catalogue/particulars published in line with Consumer
- Marketing period – 3 weeks responding to enquiries
- Auction day
- Ensure information available to inspect on day
- Collect buyers details, deposit and AML checks.
- Post auction - await completion monies.
2
Q
What are the actions you would undertake pre-auction?
A
- Receive instruction
- Agree terms of engagement
- Arranging for all relevant legal documentation and plans to be available
- Adopting Common Auction Conditions, 2018 (4th edition)
- Choosing auction venue with sufficient size with insurance cover
- Not providing misleading guide prices
- Advice all applicants if a lot is withdrawn prior to the auction
- Confirm the VAT/EPC position
3
Q
What actions would you take in respect of the reserve? When is it set?
A
- To be fixed before the auction day
- To be confirmed in writing with the client
- The figure must remain strictly confidential with the auctioneer and not disclosed to any party
4
Q
What do you include in an auction catalogue? What regulations apply?
A
- Particulars prepared in accordance with the current consumer protection regulations
- Include General Conditions of Sale and Memorandum of Sale in the catalogue
- Auctioneer to disclose any significant rent or service charge arrears relating to a lot.
5
Q
What actions do you need to undertake on auction day?
A
- Any amendments or variations to the particulars or an addendum should be openly disclosed in the room.
- A statement regarding rules for proxy and internet bidding should be available to all bidders
6
Q
What actions do you need to do post auction?
A
- Published results must be accurate and only published with the vendor’s and buyer’s consent
- The Identity of either party should only be disclosed with their consent.
- Oversee completion and receipt of completion monies.
7
Q
What due diligence should be carried out pre-auction?
A
- Inspection
- Report on title
- Flood risk
- Council tax/business rates
- TPO’s
- Structural survey?
8
Q
What are the advantages of buying/selling at auction?
A
\+ Transparency \+ Degree of certainty of sale and terms \+ Quick timescales \+ Competitive bidding \+ Binding contract at fall of gavel \+ Wide market exposure
9
Q
What are the disadvantages of buying/selling at auction?
A
- Lack of confidentiality
- If the lot fails to sell it can be harmful to the market perception of value
- High costs
- Intense timescales
10
Q
Which common Auction Conditions do Allsop adopt?
A
Common Auction Conditions, 2018 (4th edition)
11
Q
Under the common auction conditions when is completion set for?
A
a) the date specified in the SPECIAL CONDITIONS; or
b) if no date is specified, 20 BUSINESS DAYS after the auction but if that date is not a BUSINESS DAY the first subsequent BUSINESS DAY.
12
Q
How do you find out about an auction property?
A
Marketing board, catalogue, email
13
Q
Should you view an auction property before buying?
A
Yes
14
Q
What happens if a cheque for the deposit bounces?
A
As per the common auction conditions the seller may treat the contract as an at end and bring claim against the buyer for breach of contract
15
Q
What is a Notice to Bidders?
A
- to provide key information to the prospective bidder e.g. property offered subject to the Common Auction conditions (4th Edition April 2018).
- Offer process ( if accepted before auction
- Successful bidder (fees, deposit etc)
- No responsibility accepted for information unless from catalogue, site or employee.
- Key release
16
Q
What does the auction legal pack contain?
A
- Register of Title (ordered by BB);
- Title Plan (ordered by BB);
- Any additional title documents (ordered by BB);
- Common Auction Conditions (automatically provided by Allsop);
- Special Conditions (drafted by BB);
- Transfer – may include overage and clawback provisions depending on our instructions from NHSPS (drafted by BB);
- Letter to Bidders (drafted by BB);
- Local Authority Search including both Local Land Charges and Standard and Optional replies (commissioned by BB);
- Drainage and Water Search (commissioned by BB);
- Chancel Repair Search (commissioned by BB);
- Environmental Search (commissioned by BB);
- Highways Search if relevant (commissioned by BB);
- Coal Mining Search if relevant (commissioned by BB);
- EPC (provided by NHSPS);
17
Q
What might be a special condition of sale?
A
Special conditions’ are additional conditions attached to a standard contract, and are normally included in contracts relating to the sale of a land
E.g. Overage and clawback provisions
- Delayed completion period.
- Purchaser is responsible for vendor’s agency and legal fees
18
Q
What is a guide price?
A
A guide price is a marketing figure, which is used to guide potential buyers as to how much a property could be worth. They are not necessarily figures which a property will sell for, the sale price will be dependent on bidding in the auction room. Guide prices can either be a single figure price or a price range.
19
Q
What is a reserve price?
A
The price stipulated as the lowest acceptable by the seller for an item sold at auction.
20
Q
Which of these are confidential?
A
Reserve price
21
Q
How do these differ? (Guide and reserve)
A
The reserve is the minimum price it will sell for and is confidential. A guide is just a marketing figure.
22
Q
What is an Addendum?
A
An Addendum, sometimes referred to as an Amendment Sheet, is a list of changes that have been notified after the catalogue being published. The sheet will be available in the auction room and you will often be able to view the addendum on Allsop website website.
23
Q
Why are Addendums important?
A
The addendum forms part of the property description and sale contract. If you have any questions about the contents of the addendum, please speak with a member of the auctions team for advice prior to the auction beginning.
24
Q
What fees are typical for an auctioneer?
A
Buyers Fee: £1,000
Sellers Fee: 2% (minimum fee £1,000 plus VAT)
25
Can you sell a property before or after auction?
Yes
26
How does finance work for auctions?
10% deposit on the day and the remaining 90% has to be paid within 20 working days. Buyers are advised to gain mortgage approval in principle with the maximum amount that they could bid to ensure the process goes smoothly.
27
What deposit is typically payable and when?
10% on the day
28
What is a section 5B notice?
- This standard document is a notice under section 5B of the Landlord and Tenant Act 1987 (LTA 1987) offering the tenants the right of first refusal when the landlord intends to dispose of an interest in land by way of a sale at a public auction.
- An offer notice under section 5B of the LTA 1987 must be served not less than four months or more than six months before the auction date.
29
Do you know of any other important LTA acts?
Yes - The Landlord and Tenant Act 1954 (or the '1954 Act') is relevant to all commercial leases. The 1954 Act gives the right for commercial Tenants to remain in occupation of the property even when the contractual term of their lease comes to an end, and the right to apply to court for the grant of a new lease
30
How can you bid at auction?
Room/Telephone/Proxy
31
What is a proxy bid?
Proxy bidding means that you advise the auctions team as to your maximum bid, and the auctioneer will bid on your behalf up to your maximum. They will always endeavour to secure the property for you, either at or below your maximum bid if possible. If the bidding in the room exceeds your maximum, then you proxy bid would end.
32
Is VAT payable on auction properties?
If it is VAT elected
33
What are the EPC requirements at auction?
Same as marketing (within 7 days of commencement of marketing)
34
Do you have to check anything in relation to an auction venue?
Choosing auction venue with sufficient size with insurance cover
35
How are arrears dealt with in relation to auction properties?
In the case of properties that are let, there may be arrears of rent or other amounts. It is recommended that the amount of any arrears is confirmed by the seller’s solicitor and whether it is intended to recover these from the buyer. The CAC make provision for new arrears to be paid by the buyer and old arrears to be the seller’s responsibility unless otherwise stated in the special conditions of sale.
36
What is the power to sell?
Power of sale allows a lender to sell the mortgaged property and recover their investment
37
What are the requirements around the Auctions (Bidding Agreements) Acts 1927 and 1969?
Forbid any dealer from giving or offering any inducement not to bid for any lot at an auction; it is also an offence to accept or attempt to obtain any such inducement. An agreement not to bid is sometimes called “rigging” or a “bidding ring”.
38
Who is defined as a dealer under Auctions (Bidding Agreements) Acts 1927 and 1969?
A “dealer” means a person who in the normal course of his business attends sales by auction for the purpose of purchasing goods with a view to reselling them.
Joint account purchase exception: the above prohibition does not apply if the dealer prior to an auction agrees in writing with others, provided a copy of the agreement is deposited with the auctioneer.
39
What are the key principles the auctioneers act 1845?
The Auctioneers Act 1845 was the first in a series of acts of Parliament that provide for a legal framework for the auctions industry. Indeed, section 7 of that Act remains in force (requirement for the auctioneer to make clear details of their name and address for all consumers during the auction itself — failure to do so is a fine of £20).
40
What are the key principles of the Estate Agents Act 1979? (CHOAALK)
1. Clarity as to the terms of the agency (section 18)
2. Honesty and accuracy
3. Openness regarding personal interests (section 21)
4. Agreement for liability for costs
5. Absence of discrimination
6. Legal obligation to tell the client about offers received
7. Keep clients’ money separate
41
What are the key principles of the Consumer and Business protection Regulation 2008?
They relate to potential buyers and vendors and extend the duty owed to not just clients but to, potential clients, viewers, buyers and actual buyers, (all defined as consumers), to give accurate and/or necessary ‘material’ information and not to make any misdescriptions in the material.
Apply to lettings as well as sales and online agency
42
What constitutes and offence under the CPR/BPR regulations?
Unfair practices could include:
- Giving false or misleading information
- Hiding or failing to provide information
- Omissions
- exerting undue pressure on consumers
- failing to show professional diligence
43
What are Business Protection from Misleading Marketing Regulations 2008?
Business Protection Regulations relate to Business to Business activities same as CPR for businesses.
* The Regulations prohibit misleading business-to-business advertising
* They impose restrictions on how businesses compare their products to products from other companies
44
What are the penalties for breach of CPR?
- Prison for up to two years (as it’s a criminal offence)
- Prohibition
- Up to 25k in compensation
45
What are the key principles of Auctioneers Selling real estate, 2018?
- As the auctioneer is acting as agent for the seller the auctioneer should carry out further checks to verify authenticity (in addition to AML checks)
- Fees – should specify precisely when liability will arise and what liability is in the even of a withdrawal. As well as fees and expenses during duration of the period of appointment.
- Auctioneer should as far as possible verify accuracy of information through inspection and seller’s solicitor in relation to legal matters affecting title and occupation CPR and BPR 2008 cover both acts of commission and omission.
- All relevant documents and plans to be made available as long as possible prior to the sale
- Bid reporting in line with Estate Agent’s Act 1979.
- Auctioneers terms of appointment - Include extent of auctioneer’s right to refuse bids.
- Sign the contract on behalf of the seller.
46
What is the purpose of the Common Auction Conditions?
* To strike a balance between the contractual needs of the seller and the buyer while recognising that the seller will wish to determine the principal terms under which they wish to sell
* To make it easier to see all the contract terms by having one document that embodies all the terms within it rather than by reference to other documents such as the ‘Standard Conditions of Sale’
* To ensure the contract is as user-friendly as possible by adopting simple headings and by using plain English
- To increase the convenience of going to auction for the benefit of sellers and buyers, by providing a common set of conditions for all auctioneers in England and Wales
47
What do the common auction conditions consist of?
• A glossary of defined terms (compulsory)
• Auction conduct conditions, which cannot be disapplied or changed without the auctioneer’s consent (compulsory)
- 'The lot' as referred to in the catalogue
- Exchange on fall of gavel completion 20 working days later
- Notice to complete
- Seller has complied with s.5B LTA 1987
* General conditions of sale (compulsory)
* Any ‘extra’ general conditions that the auctioneer requires (optional)
* Special conditions of sale provided by the seller’s conveyancer (recommended)
* Any addendum (usually announced at the auction itself) (optional)
* A form of sale memorandum (compulsory)
48
What does s.5 of the Sale of Land by Auction Act 1867 say?
- Particulars or conditions of sale should state whether lot is sold with or without reserve.
- If no reserve no bids from seller or wall bids allowed
49
What does s.6 of the Sale of Land by Auction Act 1867 say?
- Where particulars or conditions of sale state seller has right to bid it shall be lawful for the seller or anyone on his behalf to bid at such auction in such manner as he may think proper.
50
What was the 2014 Advertising Standards Authority ruling regarding guide prices?
The ruling, against Auction House UK Ltd, is enforceable from the date of publication (23 July 2014) and affected advertisers are expected to take immediate action to ensure their websites, catalogues and other ads are compliant.
51
What was the subsequent advice issued by the Committee of Advertising Practice in July 2014?
- Guide price must include explanatory text -
This explanatory text must include: – A definition of a guide price
– Its distinction from a reserve price (which would likely require a definition of a reserve price)
– Text making clear that these prices are subject to change.
If guide below reserve – an explanation that guide is an indication within which the minimum sales price will fall (within 10%).
52
What is Allsop’s policy?
As Trading Standards say no tolerance is acceptable Allsop adopt a no tolerance approach to guide and reserve pricing, generally consummate with the RICS. Buyers also tend to prefer the transparency as it prevents buyers from wasting time and money preparing a bid which can never be sold at the advertised price.
53
When is insurance required from?
It is usually the responsibility of the seller unless stated in the special conditions up until completion. NHS PS insure the property until completion.
54
What are some important points in the Auctioneers Act 1845?
o S.7 Must ensure a board is in place in the auction where it is visible and legible with the auctioneers’ details on - for complaints.
- This was expanded by the Auctioneers (Bidding Agreement) Act 1927 which introduced a £20 fine for non-compliance.
55
What are some important points in the Sale of Land by Auction Act 1867
o S.5 if there is no reserve, auctioneer cannot bid off the wall or take bids from vendor.
o S.6. Highest bidder should be allowed to buy provided that the reserve is met/exceeded and there is no fraud or improper activity/conduct.
o Puffers – where there is a reserve a puffer can be used / bids off the wall up to reserve.
o Cannot bid up price in order to simply raise the price – fraud.
56
What are some key points from Auctioneers (Bidding Agreements) Act 1927 + 1969
o Criminal offence to induce someone to abstain from bidding/ auction rings.
o Also illegal to accept such inducements
o Penalties include £400 fine / 2 years in prison. Vendor can rescind the contract and sue for damages. They can also be prohibited from auctions.
o Also adds to the Auctioneers Act 1845 – introduces a £20 fine if board is not presented at auction.
57
What parts of the Auctioneers Act 1845 are still applicable today?
S.7 - The auctioneer must place a board with their name and address where it is legible and visible to all in the auctioneer room. This is for any complaints.
58
Tell me about guidance notes relating to auctioneering.
- Help Sheet 2007 – Clients money
- GN Auctioneers selling real estate 2013
- RICS Information Alert 2014
59
What is included on the Help Sheet 2007 - Clients money
o Clients money advice for auctioneers
o Greater transparency in buying process
o Advice concerning running
60
What is included within the Guidance Note Auctioneers Selling Real Estate 2013?
o Advise on auction running including auction legal responsibilities, compliance of all relevant estate agency and auction legalities. E.g. ML and H&S requirements.
61
What pre auction advice is there in the Auctioneers Selling Real Estate guidance note?
- agreed T of E
- All relevant legals, epc, dd before sale
- Auction venue suitable – size, insurance etc.
- No misleading guide prices
- Advice on lots being withdrawn and sold prior
- Confirm VAT
62
What setting reserve price advice is there in the Auctioneers Selling Real Estate guidance note 2013?
- Before auction day
- Confirm in writing with the client
- Confidential
- Within guide range or within 10% if single value.
63
What advice on preparing auction catalogue and online marketing advice is there in the Auctioneers Selling Real Estate guidance note 2013?
- In line with CPR 2008 & Misrep. Act 1967
- Catalogue must contain general conditions of salw and sale memorandum
- Auctioneer must disclose any rent or s/c arrears.
- Addendum / amendments disclosed to the room
- Rules for proxy / intrent bids
- All bids recorded.
64
What guidance is there in the RICS information alert 2014?
o Setting reserve prices
65
When would you recommend a property to be sold at auction?
- When a property needs to be sold within a short time frame with a degree of certainty of sale
- Backstop to private treaty method
- Specialist property
- Valuation uncertainty
- Lot of interest – competitive bidding
- When there needs to be a high degree of transparency – e.g. receivership
66
What types of auction are there?
* English auction – ascending price auction
* Dutch auction – descending price
* First-price Sealed Auction – ascending price auction with sealed bids
* Second-price Sealed Auction – ascending price auction, winner pays second highest bid
67
What DD do you do on behalf of a seller for auction?
- planning website
- environmental agency
- VOA and council tax
- EPC
- leases
- titles
Inspection, measurement
68
What are the fee structures at auction? Is it more expensive to the client as opposed to other methods?
Fees are 1-2%
Marketing costs;
1 page = £1,450 + VAT
2 page = £2,000 + VAT
69
What makes up an auction agency contract?
* Date, time and address of auction
* Address of property
* Vendor name and details
* Solicitor details
* Guide and reserve price agreed
* Marketing costs
* Fees
* Agency basis
* VAT
* Guarantee
* CHP
* Signed
70
What makes up auction contract?
* Memorandum
* Particulars
* General conditions of sale
* Special conditions
* Addenda
* Deposit
71
What is a memorandum and what makes up a memorandum of sale?
* Record of agreement between vendor and buyer.
* Address of property
* Vendor details
* Buyer details
* Both solicitor details
* Date, time and address of auction
* Sale price
* Deposit
* Vat
* Signed
72
• What are Allsop’s conditions of sale?
* Written contract governing the agreement between vendor and buyer.
* Include general conditions of sale
* special conditions
* tenancy and arrears schedules
* sale memorandum.
73
What makes up auction particulars?
* Address
* Photo
* Investment considerations
* Location and connections
* Tenancy details
* Planning
* VAT
* Date
* Disclaimer
* EPC
74
What would you do if you noticed a mistake in the auction particulars?
* Issue an addendum
* This is sent to all interested parties and made available in the room on the day.
* The auctioneer makes reference to it before offering the lot.
75
What is the difference between normal and auction sales particulars?
Auction particulars form part of the contract.
76
What details of the buyers do you collect at auction? How has this changed recently?
* Individual’s personal ID and proof of address
* Companies must provide all ID and proof of address for shareholder over 25%.
* Certificate of incorporation.
* Due to new AML regulations brought in June 2017 we have to run AML checks before exchange.
77
How do you monitor the interest during the marketing period?
* By looking on the data site to see who has downloaded what legals.
* Viewings
* Phonecalls
78
Explain the process of underwriting?
* A contractual agreement between the vendor an underwriter.
* The property is sold at an agreed price to the underwriter if additional offers do not exceed this.
* If the price exceeds the underwriting price, the vendor is contractually bounded to share the amount above this figure with the underwriter.
79
What would you do if you received an underwrite offer?
* Like any offer, report it to the client straight away.
* Explain the contractual obligations – i.e. Process and the fact that if it sells above the underwriter price, they will have to share any amount above the underwriting price with the underwriter.
80
What would you check when preparing for an auction?
* That there is no prohibition against holding an auction on the property.
* Suitable size of the room
* That fire regs have been complied with
* Insurance cover maintained by hotel is satisfactory
* Any local authority regs can be observed
81
Can an auctioneer sign on behalf of the buyer?
Yes. Permission to this effect is provided by common auction conditions and forms part of the Allsop contract enforced on the fall of the gavel.
82
What DD had been done for Hillingdon?
Report on title and building survey (to ascertain works required to split units up)
83
What special conditions were included within the sale?
- The property was sold with standard NHS PS overage and clawback provisions.
- The property was sold with a buyers fee of 1% (instead of NHS PS paying commission)
84
What is overage?
This is the arrangement made for the sharing of any extra receipts received over and above the profits originally expected as agreed in a pre-agreed formula
85
What are NHS PS overage and clawback provisions?
Overage – linked to planning permission 50% of the uplift in value payable within 20 working days of the granting of planning permission (if value agreed). If not agreed will be referred to district valuer. Payment within 20 working days of district valuer providing valuation.
Clawback – linked to disposal price. If sold within 10 years for more than the acquisition price 50% payable within 20 days of the completion of sale. Payment within 20 working days of the completion of sale.
86
What was the reserve/sale price? (Hillingdon)
£340,000 and £360,000
87
What queries were raised from Bromley?
The potential purchaser wanted to check when the trigger point would be for an overage payment (on granting of the planning permission, valuation would be done and 50% uplift owed to NHS PS).
88
How did you respond? (Bromley)
Responded telling allsop to point them to the specific clause in the contract that payment would be required within 20 days of the planning permission being granted. If payment not agreed will be referred to district valuer. Payment within 20 working days of district valuer providing valuation
89
What was the MV for Bromley?
£250,000
90
What was the site area for Bromley?
0.066Ha
91
What was the residual valuation based on? (Bromley)
- A two bedroom detached bungalow
- Build rate: £65psf
- Sales rate £425psf
92
What is included in a notice to complete?
We give notice that:
1. The sale of the Property did not occur on the agreed completion date as specified in the Contract;
2. The Seller is ready, able and willing to complete;
3. The Seller requires the Buyer under Condition G7 to complete the Contract in accordance with G6;
4. The Contract is to be completed within ten business days of this notice being given, or contract rescinded and deposit forfeited
5. The Buyer will be liable for our fees of £180 incurred in connection with serving this Notice.
93
What would you have done had they not complied with the notice (to complete)?
I would have spoken to their solicitor but if I felt payment would not be made I would instruct the solicitor to rescind the contract and remarket the property.
94
Talk me through your management of the NAP at NHSPS.
My role was to manage the programme from initial instruction through to completion of sale. I was responsible for compiling information relating to the business case for disposals, instructing due diligence and EPCs, as well as reviewing and confirming marketing particulars. I also assisted transaction managers in responding to queries raised by potential purchasers.
95
What information do you collate prior to auction?
* Official Copy of Register of Title
* Land Registry and Local Searches
* EPC
* Leases
* Tenancy Agreements
* Planning Permission Documentation
96
How have you complied with the RICS guidance and ASA ruling?
Ensure guide price is never more than 10% below reserve price (in fact minimum guide in now the reserve price).
97
How have you compiled information relating to real estate to be sold at auction?
I have compiled due diligence surveys, EPCs, title documents, overage deeds, planning pre-application feedback.
98
How have you assisted in the process of drawing up auction catalogues?
I am required to assist in the drawing up of all NHS PS listings within the auction catalogue. I would often provide the information to put in the catalogue, provide the EPC, address and information about the property. I would also confirm the measurement and confirm which photo to use for our listings.
99
How have you dealt with queries and issues raised prior to the auction in consultation with others?
I often dealt with queries relating to the special conditions of sale. For example overage and clawback provisions were often queries before a sale. - I always refer Allsop to the relevant condition in the special conditions.
100
\how have you dealt with issues arising post auction in consultation with others?
I also have experience dealing with queries post auction for example, when a buyer failed to complete within the 20-working day timeframe, I have experience with responding to firstly the transaction manager outlining the options available, and secondly by issuing a notice to complete on the purchaser.
101
How have you drafted auction particulars in line with legislation?
I ensure that no misrepresentation or a false statement of fact is made. I do this by confirming information where possible.
102
Talk me through your Hillingdon disposal.
1. Compiled the information (title documents, EPC, plans, surveys)
2. Instructed external valuation
3. Reviewed valuation and auction appraisal
4. Recommended setting the reserve in line with the external valuation
5. Assisted in confirming the particulars
6. Assisting in providing the special conditions of sale to the solicitor
7. Oversaw completion/handover of keys
103
What information did you collate? (Hillingdon)
Title documents, EPC, plans, surveys
104
How did you set the reserve? (Hillingdon)
In line with the external valuation
105
How did the EPC affect value? (Hillingdon)
The property was a D which is typical for a property of that nature and so I did not feel it had a material effect on value.
106
Why did you set the reserve at the same level as the guide price?
Due to the trading standards ruling
107
How did the CAP advice affect your pricing?
I ensured that the guide was not lower than 10% of the reserve. In fact all guides are at a minimum the level of the reserve.
108
What special conditions of sale were drafted?
- NHS PS standard overage and clawback provisions.
| - Buyers fee 1%
109
What is a TR1?
A Land Registry TR1 Form is a formal land registry document which literally transfers the legal ownership of a property from one party or parties to another party or parties
110
What is included in a draft sale contract?
* Seller
* Seller’s solicitor
* Brief description of the lot
* Tenancies
* Arrears
* Insurance
* Deposit
* Amendments
111
Talk me through the outcome of the auction.
* After the hammer falls, you will be accompanied to the Buyers' Lounge where the clerk will take your details, deposit funds and ask for your identity documents.
* Then sign the Memorandum of Sale.
* Allsop send signed memorandum to the seller’s solicitor.
* Completion will take place within 20 working days, unless otherwise specified in the Special Conditions of Sale.
112
Why was this property suitable for auction? (Hillingdon)
* It met my client’s objectives of disposing within a relatively short time frame.
* Small site with some development/refurb potential – may appeal to market of small investors/developers who often bid at auction
* NHS PS has good experience selling similar properties at auction
113
Talk me through a query you have dealt with pre-auction.
The buyer required clarification over the overage and clawback provisions. The buyer had concerns that he may get double charged on the planning overage and the clawback (sell on). I informed the auctioneer to direct the buyer to clause 5 of the overage and clawback provisions which stated no double recovery. Where claw back payment is due under schedule 1 and an additional payment has been made under schedule 2 (planning permission) the payment due shall be the clawback payment less the amount of the additional payment for planning.
114
Talk me through a query you have dealt with post-auction.
I also have experience dealing with queries post auction in relation to serving a notice to complete. The purchaser was asking for an extension on the completion deadline as his current house had not sold. I consulted my client and in order to achieve their objection the extension being requested would not meet that (nor was it guaranteed). I advised my client that we should serve a notice to complete on the buyer giving them 10 working days to complete the sale or the contract could be rescinded and deposit monies kept.
115
What special conditions of sale applied (Bromley)
- Overage and clawback
| - - 1% buyers fee
116
Why did you serve a Notice to Complete?
To give my client the ability to rescind the contract and remarket whilst still meeting their timeframe objectives.
117
How did this ensure the sale completed? (Bromley)
Ensuring completion monies had been received and instructed solicitor to complete the sale.
