This page is kindly supported through donations from a member of our Register of Property Professionals
Once you have found a building that suits your requirements, you will need to enter into negotiations with the Vendor (or their agent
). This sections aims to explain how to:
- negotiate as effectively as possible - this covers:
The negotiation process
Here is a step-by-step guide to the negotiation process:
1. If you are represented by an agent they will provide you with:
- their opinion of the value of the property
- a guide to the level they would expect to be agreeable to the Vendor
- An indication of whether or not a detailed building survey or planning advice is necessary before you proceed further
If you are not represented by an agent, you may choose to speak to the Vendor or their agent before submitting your offer to try and gauge what would be acceptable. Remember that the Vendor and their agent are trying to secure the best price possible for the building so it is important for you to carry out research and form your own opinion before submitting your offer. The degree to which you can negotiate will depend on the strength of the market at the time.
2. In a strong market, there is likely to be a high level of competition. So a Vendor may wish to request sealed bids from all interested parties. If the Vendor receives a number of bids at a very similar level, they may then request a second round of best and final bids.
3. Once the initial offer has been submitted, you or your agent will negotiate with the Vendor and/or their agent to agree on a price which suits both parties.
4. Once a price has been agreed the Vendor's agent will issue what is known as Heads of Terms
, containing the detail of the exact conditions of the sale. This document is not legally binding: it is used as a template for instructing the solicitors of both parties so that they have a documented understanding of the terms that have been agreed.
Please note, if you are represented by an agent, it will be their role to ensure that everyone involved in the transaction is working towards the same deadline so that completion happens on time.
Charities often can’t act as quickly as private individuals. If the market is not heated it is worthwhile explaining to the vendor the problems of dealing with a charity and obtaining a commitment from him to give you a specific period before he offers the property elsewhere. You can say that you require this in consideration of committing the charity to professional fees. If the vendor agrees, and he might if the property proves slow in selling, then there could be able to be a collateral contract whereby if the vendor does offer the premises elsewhere during the “lock-out period” there may be ca claim against him for, e.g. wasted fees.
Back to top
Information you should include with your offer
When you submit your offer, you should include the following information so that a Vendor can make an informed decision:
About your organisation
You should provide information on your organisation - printed leaflets or brochures or your website address are ideal. The Vendor may also request copies of your last three years accounts to get a better understanding of your organisation.
You should state clearly the price you are willing to pay for the property, subject to contract. Say if you need planning permission or funding. Suggest a time that these issues might take.
You should clarify the timescale within which you expect to be able to exchange and complete. Speak to your bank and solicitor in advance to get their view on the timescales involved - these will vary depending on:
- the size of the property
- whether it is a freehold or long leasehold
- the condition of the building
- whether there are any tenants already occupying part of the building
As a rough guide, you can assume that a vacant self-contained freehold building of approximately 3,000 ft² will take up to three weeks to exchange and no more than another three weeks to complete - the legal process is usually longer than one expects.
It is essential that proof of funding is supplied with any offer. This will usually be a letter from your bank, mortgage supplier or grant funder.
Please note, any written offer must be stated as being subject to contract and if applicable survey and planning consent, etc.
Heads of terms
Once the terms of the sale have been agreed the Vendor or his agent or surveyor will draw up Heads of Terms which are sent to you for your agreement. Once both parties are in agreement these terms are sent to the Vendor's solicitor, who will draft the required legal documentation.
Back to top