Chris Platts
Partner
Brownill Vickers & Platts
It's getting close to 20 years since I began my career valuing licensed property, and yet it never ceases to amaze me when buyers and sellers do not take professional advice from reputable and qualified surveyors who are members of either the Royal Institution of Chartered Surveyors (RICS) and/or the Association of Valuers of Licensed Property (AVLP).
Only a few days ago I was called by a lessee facing bankruptcy after paying a £200,000 premium for a leasehold pub business some 18 months ago. They had been cash buyers, had not needed a formal valuation for lending purposes and, worryingly, had assumed that as the property was being advertised by the agent "reduced for a quick sale", that it simply must have been worth it.
The business is haemorrhaging money and will not last much longer; sadly, if these unfortunate buyers had taken professional advice from a reputable source at the outset, I'd wager that they wouldn't have touched this pub at that price with a proverbial barge-pole.
Vendors should also take note - the smoke-and-mirrors- style promise of a high price and a quick sale by a smooth-talking "agent" is all well and good, but should be questioned, as over-inflated asking prices will always be exposed and discredited by a suitably qualified surveyor working on behalf of a buyer or lending source, resulting in a reduced offer or the sale falling through completely. Cash buyers are actually very few and far between.
There are two key questions that buyers and sellers should always ask: is the agent a suitably qualified member of the RICS or AVLP, and can they show you evidence of similar deals they have done in the locality? Other pubs for sale will not do - it should be completed deals only.
Further questions that sellers may choose to ask prospective agents include: can they prove outlandish statements such as numbers of website users; why would they need a long contract to sell the property if they are so confident of a sale, and, similarly, why would they need up-front monies? Also, are the fees absolutely clear from the outset - is there a withdrawal fee and, if so, what is it actually for and how much is it?
As I said at the start, it's nearly 20 years since I entered the industry and I hope to do another 20 or so before finally hanging up my clipboard. Hopefully, by then everyone will have realised that not all agents are the same!