Buying and Selling FAQ

Buying a child care centre can be a daunting experience; after all, it’s a big commitment and involves a lot of money. To help you on your journey, we answer some of the most common questions

Frequently Asked Questions2018-02-26T14:47:50+00:00

Frequently Asked Questions

Registered valuers take into account a number of factors to determine an appropriate value for the Freehold/Business. These include but not limited to:

  • Location/position
  • Site exposure
  • Site size
  • Surrounding service facilities; schools, shopping centres, transport etc.
  • Age of the building
  • Licence capacity
  • Fees
  • Occupancy levels
  • Productivity
  • Competition, demographics, socio-economic factors
  • Current market value of recent sales

Various childcare management companies offer their services to manage the entire operations including payment of wages, creditors and banking. Fees for this service depend on the licence capacity of the centres and number of services performed.

Purchasers confirmation of business data is required in terms of the contract. Contracts include special conditions one of which is the undertaking of Due Diligence on the business operations and legal verification of various aspects. Once due diligence is satisfactorily completed the condition is said to be completed.

Upon a contract being signed and dated it is usual to allow 30 days for due diligence and to a further 10 days for the banks’ final approval and after receiving the registered valuations.

Bank policies change from time to time but up to 50% of the valuation of a leasehold childcare centre and up to 60% for a freehold childcare centre may be lent. The amount lent by banks may vary if other security properties are available. Buyers should discuss their requirements with their Bank prior to making an offer.

The deposit payable usually involves a deposit of around 5% to 10% of the purchase price as a sign of commitment. The deposit amount is retained in a trust account by the agent until the property is settled. Nevertheless, the final amount of deposit paid is a matter of negotiation by both parties.

The seller sets the sale price usually in discussion with the agent, however, the buyer invariably offer a lower amount. Thus, the sale price can be the subject of many offers. Buyers should assume their first offer may be the only opportunity they get to obtain the property. A willing seller may accept a reasonable offer from another buyer. A seller makes the decision sell their property when they like and the agent does not make the decision to sell.

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Childcare Property Sales, Specialising in Childcare Centres for Sale – 0421 289 818 | 0425 219 355

Over 25 years experience in childcare sales, industry knowledge and marketing

QUESTIONS ABOUT A BUYING OR SELLING A CHILDCARE CENTRE? ASK OUR EXPERTS.