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Buying an Estate? You will need our help.

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Knight Frank
London and Country specialist property buying agents
06 Dec 2016  |   Mark Lawson

When purchasing farms and estates, having a buying agent on your side is critical as the process is hugely complex and there are so many variants to consider. We solely advise buyers, acting in their best interest. We often work discreetly for high profile and private clients to protect their identity. We save them time and money by advising them what to see and more importantly, not to see. Over 90% of the property we view on their behalf, we discount.

We purchase property from any source whether it is on the market, off-market or by a private approach. 38% of TBS purchases have been conducted off-market in the last 12 months and at the top end of the market in 2015 and 2016 all the properties that I purchased, except one, were bought off or pre-marketing.

Preparation

In advance of viewing estates with clients, we provide a full brief on the property and the owner so they know what to look out for and how to conduct themselves in the viewing. Empathy between potential buyer and seller is critical at this level of the market.

The Process

Once a client expresses interest in a property, we immediately begin more detailed research and due diligence, which is much more complicated, intricate and extensive when buying a farm or an estate than a house.

We initially research anything that may affect future enjoyment or value of the estate, including:

  • The obvious such as road noise, plane noise and rowdy neighbours.
  • The less obvious, such as future neighbouring developments, wind farms, etc.
  • Unusual matters such as Radon, smells and light pollution.

This guides our client and puts us in as stronger position because at the point of making an offer, the seller will know we have carried out extensive due diligence, so are more stable buyers than others who might unearth matters that concern them later in the process.

Advice on particular matters to watch out for when buying farms and estates include:

  • Soil types / woodland management regimes / farming practises.
  • We try to review farm / estate accounts.
  • Research of any commercial history / accounts and business dealings.
  • Any environmental schemes or statutory designations that affect the land and can be particularly onerous (some ELS / HLS schemes allow public access, for example)
  • Employment, TUPE (transfer of undertakings (protection of employment)) can be a minefield.
  • Water – is the supply private, who / how many people are supplied and what are the obligations?
  • Planning, in particular Listed Building consents – are there works that have been done without the appropriate permissions?
  • Farming Entitlements and farming practise – have the operations been undertaken appropriately?
  • Occupancies – cottages / land tenancies / shooting / stalking / fishing – have these tenancies / agreements been formalised correctly? Implications can be significant to enjoyment and value.

Negotiation for an estate purchase

Estate / farm negotiations are very different to standard property negotiations given the numerous different elements to be considered.

With over 20 years’ experience in the farms and estates field, I know that negotiation takes great skill, dexterity and particularly emotional intelligence to construct and achieve the best possible deal for our client, whilst keeping the seller on-side and happy. Property deals are rarely just about the most amount of money; there are many other considerations.

Things to look out for / possible pitfalls / complications when purchasing an estate:

  • Estate sales are often very emotional affairs for the vendor (the family may have been living there for generations) and these sales are usually taking place for unhappy reasons.
  • Timing – there may be a daughter’s wedding to consider, children’s schooling, having the last family Christmas at home etc.
  • Considering the farming year and timing (does the purchaser take over midway through the year, complete at the end of harvest, or complete earlier allowing the vendor hold over on part or all?)
  • If there is a shoot how does the timing work (they may have days booked until the end of the season. Do you delay completion or have hold over on the shoot and associated property e.g. gamekeeper staying in the cottage until end of the season, access for guns etc.)
  • Do you retain old employees (this may be critical as the vendor may want to look after old estate retainers. They may occupy a cottage on a low rent, TUPE implications will apply, and there will be a cost at point of redundancy or retirement).
  • Access for the vendor’s family in the future (they may want to visit a special spot or family grave on the estate). How do you deal with this diplomatically?
  • Fixtures and fittings (always a delicate discussion in the house but don’t forget the cottages and do you want to buy the farm equipment and machinery). What’s it worth, is it fit for purpose?

Post Agreement of Terms

Once the transaction is agreed, then the real work begins.

  • We introduce and co-ordinate all the best relevant advisers, including lawyers, surveyors, planning advisers, agronomists, soil experts, water experts, environmental surveyors, landscape or interior designers, specialists in all or any required field.
  • We produce a very thorough purchase report covering all aspects of our research and anything that would have a bearing on our clients’ enjoyment of the property, or its future value and the way all elements of it should be managed. This is delivered pre-exchange of contracts and run through at the same time as the legal report.
  • We nurse the transaction through to exchange, assisting any matter that may arise during the process, including re-negotiation on price or terms if required.

Post Exchange of Contracts

We manage the handover between exchange and completion, including:

  • The transfer of all services.
  • The transfer of Entitlements, Environmental Schemes, tenancies and all other relevant matters.
  • We provide a ‘New Owners’ manual that explains in detail how the house and services work, together with information on the best local suppliers, neighbours names and numbers and where possible, profiles. We also detail how the farm / estate enterprises work and the individuals involved.

Conclusion

Having someone onside to help navigate the complications of a farm or estate purchase has saved our clients time and money and made a complex transaction as straightforward as possible – it can be easy to acquire a property but much more difficult to unwind a poorly bought asset.

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