- Original Poster
- #1
Guys, I want to buy a cafe business and I've agreed the price with the vendor already.
The figures are good, accountant has had a look and agrees there is scope for improvement.
The bank is happy to lend the money,
I've got a solicitor. There is no reason to not move forward.
The only sticky point is the agent who IMHO is using bullyish tactics.My solicitor agrees with me.
The agent wants me to give a deposit (non-refundable) and also sign/accept to pay the LL fees..in fact, have a look at the letter and tell me your opinion if this is normal and usual when purchasing a business:
The Vendor thanks you for your Offer and has indicated that a Sale would be agreed on the following basis:
· £xxxxx Leasehold for the goodwill, fixtures and fittings plus stock at value on completion.
· Lease Term – TBA New 10 year Landlord & Tenant Act Lease
· The Rent – TBA (currently £xxxxpa)
Evidence of Funds – Before we can proceed please provide evidence of available funds and confirmation of a relevant Bank Loan Offer for the total purchase.* (this only needs to be in the form of an Agreement In Principle from your bank or lender)
Deposit - In addition we also require a non-returnable deposit cheque of £1,800 to show good faith on your part, payable to our client’s Solicitors – Once we have received your deposit cheque we would reject all other offers and remove the business from the market, stop all discussions with any other applicants allowing you a clear opportunity to complete all the legal work. This amount is part of the price and is not additional, the vendors solicitor will deduct this from the final price e.g. £xxxx + sav.
Identification - Along with your deposit cheque, please provide a Photocopy of your Passport and a Utility Bill; this is now essential so we can satisfy the current Government Money Laundering regulations for the vendor’s solicitor.
Return of Deposit - The Vendor(s) would agree to return the deposit monies either if the vendor chose to Withdraw from this Sale for their own reasons or if there were serious issues with the vendors property title, lease re-assignment, granting a new lease, or trading permissions, all of which were problems entirely unrelated to you the purchaser.**
Legal Costs - Because this is a Leasehold purchase - It is normal practice for the purchaser to undertake to pay the Landlord’s solicitor and managing agent’s reasonable costs relating to the reassignment of an Existing Lease or the production of a New Lease.
References - The Landlord will require up to 3 References: 1 Trade, 1 Bank and 1 Accountant, and may require a CV and a meeting, please confirm you are able to provide these so we can obtain consent from the landlord.
If the above is acceptable to you please call us at the above office and confirm when we can expect to receive the:
1. Above deposit for £1,800
2. Photocopy of your passport and utility bill.
3. Evidence of funds or AIP
4. Your Solicitors contact details
We will then issue a “Memorandum of Sale/Heads of Terms” to all parties’ solicitors and progress the Sale to a satisfactory conclusion.
Why should you give us a Non-Returnable Deposit of £1,800?
XXXX (agent) has a considerable amount of experience in the successful Sale of businesses such as the one you are currently negotiating on and as the selling agent we will only make recommendations to the Vendor on those Purchasers we believe to be in the strongest position.
Ø Making an Offer on a business costs nothing
Ø Commitment to purchase is what is required
Ø It’s just a deterrent to stop purchasers “Changing their minds”
In the past we have placed businesses into the hands of Solicitors, only to find that weeks later the Purchaser has changed their mind! None of us can afford this kind of wasted time and money and as a result we have devised the following
process:
1. Withdrawal - our experience has shown that after the Vendor’s solicitor has been instructed and significant
costs incurred it is always the Purchaser who pulls out of the deal leaving the Vendor with an unacceptable and
unrecoverable solicitor’s bill to pay.
2. It’s Your Commitment – paying a Non-Refundable deposit of £1,800 shows good faith on your part and is
payable to our client’s Solicitor not EM&F and obviously comes off the final price.
3. Our Commitment – in return for the Non-Refundable deposit of £1,800 we would remove the business from the market allowing you the Purchaser a clear run at Completing on the business knowing that we are not going discuss the Sale with anybody else.
4. Our Recommendation – to the Vendor, on acceptance of an agreed Offer, is that the first person to provide us with a Non-Refundable deposit of £1,800 and evidence of funds is the Purchaser we should go with.
5. Refund - the Vendor would agree to return the deposit monies either if the vendor chose to Withdraw from this Sale for their own reasons or if there were problems which either frustrated or prevented the sale being completed due to serious issues with the vendors property title, lease re-assignment, granting a new lease, or trading permissions all of which were problems entirely unrelated or not created by yourself the purchaser.
The figures are good, accountant has had a look and agrees there is scope for improvement.
The bank is happy to lend the money,
I've got a solicitor. There is no reason to not move forward.
The only sticky point is the agent who IMHO is using bullyish tactics.My solicitor agrees with me.
The agent wants me to give a deposit (non-refundable) and also sign/accept to pay the LL fees..in fact, have a look at the letter and tell me your opinion if this is normal and usual when purchasing a business:
The Vendor thanks you for your Offer and has indicated that a Sale would be agreed on the following basis:
· £xxxxx Leasehold for the goodwill, fixtures and fittings plus stock at value on completion.
· Lease Term – TBA New 10 year Landlord & Tenant Act Lease
· The Rent – TBA (currently £xxxxpa)
Evidence of Funds – Before we can proceed please provide evidence of available funds and confirmation of a relevant Bank Loan Offer for the total purchase.* (this only needs to be in the form of an Agreement In Principle from your bank or lender)
Deposit - In addition we also require a non-returnable deposit cheque of £1,800 to show good faith on your part, payable to our client’s Solicitors – Once we have received your deposit cheque we would reject all other offers and remove the business from the market, stop all discussions with any other applicants allowing you a clear opportunity to complete all the legal work. This amount is part of the price and is not additional, the vendors solicitor will deduct this from the final price e.g. £xxxx + sav.
Identification - Along with your deposit cheque, please provide a Photocopy of your Passport and a Utility Bill; this is now essential so we can satisfy the current Government Money Laundering regulations for the vendor’s solicitor.
Return of Deposit - The Vendor(s) would agree to return the deposit monies either if the vendor chose to Withdraw from this Sale for their own reasons or if there were serious issues with the vendors property title, lease re-assignment, granting a new lease, or trading permissions, all of which were problems entirely unrelated to you the purchaser.**
Legal Costs - Because this is a Leasehold purchase - It is normal practice for the purchaser to undertake to pay the Landlord’s solicitor and managing agent’s reasonable costs relating to the reassignment of an Existing Lease or the production of a New Lease.
References - The Landlord will require up to 3 References: 1 Trade, 1 Bank and 1 Accountant, and may require a CV and a meeting, please confirm you are able to provide these so we can obtain consent from the landlord.
If the above is acceptable to you please call us at the above office and confirm when we can expect to receive the:
1. Above deposit for £1,800
2. Photocopy of your passport and utility bill.
3. Evidence of funds or AIP
4. Your Solicitors contact details
We will then issue a “Memorandum of Sale/Heads of Terms” to all parties’ solicitors and progress the Sale to a satisfactory conclusion.
Why should you give us a Non-Returnable Deposit of £1,800?
XXXX (agent) has a considerable amount of experience in the successful Sale of businesses such as the one you are currently negotiating on and as the selling agent we will only make recommendations to the Vendor on those Purchasers we believe to be in the strongest position.
Ø Making an Offer on a business costs nothing
Ø Commitment to purchase is what is required
Ø It’s just a deterrent to stop purchasers “Changing their minds”
In the past we have placed businesses into the hands of Solicitors, only to find that weeks later the Purchaser has changed their mind! None of us can afford this kind of wasted time and money and as a result we have devised the following
process:
1. Withdrawal - our experience has shown that after the Vendor’s solicitor has been instructed and significant
costs incurred it is always the Purchaser who pulls out of the deal leaving the Vendor with an unacceptable and
unrecoverable solicitor’s bill to pay.
2. It’s Your Commitment – paying a Non-Refundable deposit of £1,800 shows good faith on your part and is
payable to our client’s Solicitor not EM&F and obviously comes off the final price.
3. Our Commitment – in return for the Non-Refundable deposit of £1,800 we would remove the business from the market allowing you the Purchaser a clear run at Completing on the business knowing that we are not going discuss the Sale with anybody else.
4. Our Recommendation – to the Vendor, on acceptance of an agreed Offer, is that the first person to provide us with a Non-Refundable deposit of £1,800 and evidence of funds is the Purchaser we should go with.
5. Refund - the Vendor would agree to return the deposit monies either if the vendor chose to Withdraw from this Sale for their own reasons or if there were problems which either frustrated or prevented the sale being completed due to serious issues with the vendors property title, lease re-assignment, granting a new lease, or trading permissions all of which were problems entirely unrelated or not created by yourself the purchaser.
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