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Paper 2 · Lesson 3 — Marketing, Listings, Methods of Sale, Data Protection, Advertising and CPFTA

Methods of sale

Auction (gavel / 10% / reserve / no cooling-off), tender (sealed / deposit), private treaty.

2 questionsAnswers & explanations includedFree — no sign-up

Question 1

At a property auction, bidding on a unit reaches its highest point and the auctioneer brings down the gavel. A separate unit fails to reach the figure the seller had privately set as his minimum, and the room is unsure what becomes of it — whether it is simply lost, or can still find a buyer another way after the auction has closed.

Consider the following statements.

  1. (i) The auction sale of the first unit is complete on the fall of the gavel.
  2. (ii) On the fall of the gavel, the sale contract is signed with a 10% deposit.
  3. (iii) For the second unit, the auctioneer may withdraw it on the seller's behalf, the reserve price not having been reached.
  4. (iv) A withdrawn unit that did not reach its reserve can never be sold by private negotiation afterwards.
  1. A. (i), (ii), (iii) and (iv)
  2. B. (i) and (iii) only
  3. C. (ii) and (iii) only
  4. D. (i), (ii) and (iii) only
Show the answer and full explanation

Answer: D

The rule. An auction sale completes on the fall of the gavel, with the contract signed and a 10% deposit paid. If the reserve is not met, the auctioneer may withdraw the property for the seller. A passed-in property can still be sold afterwards by private negotiation.

Why D is correct. (i) completion on the gavel, (ii) the signed contract and 10% deposit, and (iii) withdrawal for an unmet reserve are correct. (iv) is false — a passed-in unit can still sell by post-auction negotiation.

The other options.

  • A adds the false (iv), the "never sold afterwards" claim.
  • B drops (ii), the contract-and-deposit point.
  • C drops (i), completion on the gavel.

Exam note. Gavel + signed contract + 10% deposit. A passed-in lot can still sell by private treaty afterwards.

An auction sale completes on the fall of the gavel, with the contract signed and a 10% deposit paid →

Question 2

Madam Kwek wants to dispose of her unit quickly and transparently through open competitive bidding on a fixed day. Which method should Rachel recommend?

  1. A. Closed tender
  2. B. Auction
  3. C. Private treaty
  4. D. An exclusive listing appointment
Show the answer and full explanation

Answer: B

The rule. For a quick, transparent disposal by open competitive bidding on a fixed day, auction is the method.

Why B is correct. Auction gives Madam Kwek the open, same-day competitive price she wants.

The other options.

  • A closed tender is confidential sealed bidding, not open public bidding.
  • D an exclusive listing is an appointment, not a method of sale.
  • C private treaty is slower, direct negotiation without open bidding.

Exam note. Quick, transparent, open bidding on a day → auction.

For a quick, transparent disposal by open competitive bidding on a fixed day, auction is the method →

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