Purchase & Sale Flashcards
(16 cards)
What are the 4 methods of sale?
Private treaty
Auction
Formal tender
Informal tender
What are the advantages/disadvantages of private treaty?
Advantages -
- Confidential
- Flexible
- No obligations
- Controlled by the parties
Disadvantages
- Potential for gazumping/gazundering
- Party can pull out
- May result in abortive costs
What is gazumping / gazundering?
Gazumping - seller accepts higher offer, whilst already under offer with someone else
Gazundering - When the buyer lowers their offer after the seller has accepted it.
What is the formal tender process?
Used by statutory bodies to ensure public accountability. ‘Sealed’ bids are submitted and contracts are exchanged upon deposit payment
What is the informal tender process?
Brings a period of private treaty marketing to a close by inviting best bids.
Seller states that they are not obligated to accept the highest or best bid.
What is auction?
A public forum where an asset is sold to the highest bidder
What are the advantages and disadvantages of auction?
Advantages
- Quick sale
- For unique properties that may struggle to sell on the open market
- Properties with large demand - can encourage bidding
Disadvantages
- Public
- Costly
- Short marketing period
What is the auction process?
- Agree ToE
- CoI check
- Full DD
- Documents available for inspection in advance
- Reserve price TBA
- Contracts exchanged when gavel falls, deposit paid on the day
What are the 3 types of agency instruction?
- Joint
- Sole
- Multiple
What is the difference between sole selling rights and sole agency rights?
Sole selling rights - agent receives a fee even if they did not introduce the buyer to the seller
Sole agency rights - fee only agreed if agent introduces buyer to the seller
What is a completion notice?
When the purchaser fails to perform in a specified timeframe, and the seller can issue a completion notice obligating them to complete within 14 days.
If they pass this deadline = lose deposit and loss of value if lower offer then accepted. Seller rescinds contract
What are the current stamp duty bands?
under £150k = 0%
£150k - 250k = 2%
above £250k = 5%
Tell me about the sale of the property in Hucknall?
Reserve - £190k
Guide - £210k
Sold for £200,500
Tell me about the sale of Well Street Mill?
Guide = £135k
Reserve = £120k
Sale price = £180k
What is a ready, willing and able purchaser?
Gives the agent the right to a selling fee, even if the sale doesn’t go through - as long as the purchaser is ready, willing and able to transact.
Does the sale of land have to be in writing?
Yes, under the Law of Property (Miscellaneous Provisions) Act 1989
