The Australian Real Estate Review Spring 2011 by APRS Media

How to make

more money

from your rent roll

Styling tips to get the most from your open inspections How to nail that dream job!

Spring 2011

“Sourced exclusively from a Single Vineyard of Circa 1900 year old Estate Grown Shiraz Vines!”

James Halliday Wine Companion 2011 2007 Woodstock ‘The Stocks’ Shiraz This is a selection of the best barrels of shiraz from the century-old vines near the winery; the colour is good, the wine with a great array of spice, dark chocolate, black cherry and blackberry fruit; while only medium-bodied, it has outstanding length bolstered by ﬁne, savoury tannins. Screwcap. 14.5% alc. Rating 96

Woodstock Wine Estate | Douglas Gully Road, McLaren Flat, South Australia | +618 8383 0156 | www.woodstockwine.com.au

Spring 2011

contents

2 Editorâ&#x20AC;&#x2122;s Letter 4 Foreword: Bailey Compton, Managing Director at Leverage Australia and the Australian College of Professionals. 10

Agent Profile: Eddy Piddington, agent at Cunninghams Property, Sydney.

14 Industry Q&A: Alan Kohler, host of Inside Business and finance presenter on ABC News.

From the experts 60 Advertising: Ian Grace, one of the worldâ&#x20AC;&#x2122;s leading authorities on real estate advertising, shares two of his top 10 tips for writing great real estate ads. 64 Marketing Issues: Marketing specialist Dee Houlihan discusses the right approach for a marketing strategy for your business. 80 Conveyancing Issues: Pauline Barrow, National President of the Australian Institute of Conveyancers, discusses things you need to know when acquiring a commercial enterprise. 94 Legal Issues: Sharon Lakic, solicitor at Leverage Australia, discusses your entitlements when you leave a place of employment to pursue the next stage of your real estate career. 98 Auctions: Auctioneer Will Hampson discusses why the top 20 per cent of agents in Australia auction.

The state of play 74 Commercial: Tony Crabb, researcher at Savills, looks at the Australian commercial property market. 96 South Australia: Phil Harris from Harris Real Estate weighs in on how the South Australian real estate market will fare amidst the global economic downturn. 100 Melbourne: Peter Sarmas discusses property trends on the Melbourne market.

Special thanks to Jason Attard Photography for the photographic contributions throughout The Australian Real Estate Review.

The Australian Real Estate Review

Special Features

The Australian Real Estate Review

How to nail that dream job! In the world of job applications and interviews there are certain dos and don’ts. Margaret Ambrose reports on how to stand out correctly when going for that dream job.

Doing well by doing good If money’s an issue, your agency can be creative about potential community involvement initiatives. They need not cost the earth and they bring with them a wealth of benefits. Denis Moriarty reports.

Styling tips to get the most from your open inspections Home styling expert Jo Lemmer shares her secrets on how to realise a home’s full potential by following some simple styling tips.

How to make more money from your rent roll RIGHT NOw In these challenging economic times you can not only survive but turn your rental department into a profit-generating powerhouse, writes Darren Hunter.

Lessons from the siege of real estate franchising The changing economic environment has given rise to a quiet revolution in new real estate agency models that challenge the status quo. Jason Gehrke reports.

To successfully innovate, do so with purpose There is no doubt that when pursued in a cost-effective manner technologies have the potential to add significant value to real estate businesses of all structures and sizes, writes Charles Tarbey, Chairman and Owner of Century 21 Australia.

Eat to beat stress Long hours, random breaks and a stressful workload means that most real estate agents eat on the run, or not at all. Follow our daily menu guide to find out what to eat, and when, and why it’ll do you good in the long run. Charmaine Yabsley reports.

Top 10 smart phone applications every real estate agent needs to have Smart phones have changed our lives, and for better or worse they are here to stay. As a busy real estate professional, it is critical that you get the best use out of the technology in your possession. Jon Paior reports.

Going anywhere nice for your holidays? Planning a holiday can be almost as stressful as working. We’ve found the best retreats around which will help you forget all about work. Some will also help recharge your batteries, teach you to cook, snorkel and most importantly, how to truly relax. Charmaine Yabsley reports.

Rieslings and pork buns Graham Wright reviews three rieslings to add to your wine collection.

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Editor’s Letter

eveloping an effective advertising and marketing strategy for your business is crucial in the world of real estate and as such these two topics feature very heavily inside this edition. Firstly, we welcome our newest contributor, Ian Grace, one of the world’s leading authorities on real estate advertising who in an Australian exclusive will share his top 10 tips for writing great real estate ads. In taking the mystique out of effective advertising, Ian explains two basic advertising concepts: establishing who will see the most value in what you are advertising, i.e. who it is aimed at, and then what they will be able to do as a direct result of the purchase. You can read tips one and two inside from page 60.

Kathryn Edwards

Editorial Assistant

On a more personal front, do you want to get on board the smart phone app revolution? Resident geek Jon Paior reports on the top 10 smart phone apps every real estate agent needs to have.

Peter Sarmas discusses current trends in the Melbourne property market, while Phil Harris weighs in on how the South Australian real estate market will fare and Savills researcher Tony Crabb looks at the national commercial property market.

Also inside, auctioneer Will Hampson discusses why the top 20 per cent of agents in Australia auction. Reporter Margaret Ambrose talks you through the world of job applications and interviews and explains how to nail your dream job. Franchise advisor Jason Gehrke discusses the revolution that the franchising of residential real estate agencies is undergoing.

Coupled with the effective use of technology, your advertising and marketing opportunities are limitless. As such, we’ve devoted much of this edition to the topic. Charles Tarbey, Chairman and Owner of Century 21 Australia, says on page 48 that when pursued in a cost-effective manner

editor@aprs.com.au

the property management front, Darren Hunter reports on how to turn your rental department into a profit-generating powerhouse.

With Christmas, the perfect time for giving, just around the corner, we put the issue of corporate social responsibility under the microscope. Denis Moriarty discusses ways your agency can be creative about potential community involvement initiatives.

When it comes to marketing, expert Dee Houlihan argues that to effectively market, a strategy has to be built on understanding the entire functionality and methodology of your business. She discusses the right approach for a marketing strategy for your business inside.

Editor

technology has the potential to add significant value to real estate businesses of all structures and sizes.

Looking at the state of your health, Charmaine Yabsley reports on what to eat, and when, and why it’ll do you good in the long run. Home styling expert Jo Lemmer shares her secrets on how to realise a home’s full potential by following some simple styling tips, and on

Co-ordinator Renee Lambert Phone: 08 8113 9223 rlambert@aprs.com.au

General Manager

Bianca Fidge

Darren Hunter

Graphic Designers

Charles Tarbey

Michael Griffiths

Ian Grace

Adelaide SA 5001

Kimberley Smith Kasha Abbott

Margaret Ambrose

Phone: 08 8113 9200 Fax: 08 8113 9201

prepress@aprs.com.au

Marketing Danielle Tessari

The Australian Real Estate Review

Denis Moriarty

Jon Paior Jo Lemmer

Kathryn Edwards Editor

CEO

Will Hampson

Charmaine Yabsley

I would be very interested to hear your thoughts on our magazine or any of the issues addressed inside. Please drop me a line at editor@aprs.com. au or follow me on Twitter: @KathrynEdwards

Gary Peach

Lead Designer

Phone: 08 8113 9206

Also remember to look out for our regular columnists Bailey Compton, Shannon Lakic and Pauline Barrow.

Publisher

Feature Contributors

Louie Smale

Finally, if you’re planning a well-deserved holiday, we’ve found the best retreats to help you forget all about work, see page 84.

Garth Wright

Jarrod Fitch

Jason Gehrke

Inside we also speak with one of Australia’s young real estate stars, Eddy Piddington, who discusses his success to date and the challenges faced by young agents in the industry.

Graham Miles

APRS Head Office GPO Box 1746

Printer Newstyle Printing 41 Manchester Street Mile End SA 5031

Disclaimer APRS is not committed to nor takes responsibility for the views expressed in articles or advertisements herein. The publishers could not possibly ensure that each advertisement published in this magazine complies with the Trade Practices Act and responsibility must therefore rest with the person, company or agency submitting the advertisement for publication.

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Foreword

Blocked out

n eight days, Channel Nine drove a stake into the heart of the real estate industry in Australia. It isn’t new that media outlets brutally attack the real estate industry, but it was not their intention this time, to inflict harm. Between the 14th of August and 21st August 2011, through the avenue of 60 Minutes and the finale of The Block, Channel 9 launched a decisive attack on the real estate industry. We all know about the finale of The Block, but what seems to have gone unnoticed is the 60 Minutes program that occurred seven days before. 60 Minutes ran a segment which examined two families’ lives that had chosen not to invest in the property industry. These two couples advocated renting over buying. The two couples had said that while they were buying their own properties, they were unable to live a lifestyle, deliver experiences to their children and enjoy the basics of life and, most importantly, it had adversely affected their relationship. These two couples had chosen to sell out of the property industry and to rent whilst their children were young. Obviously the flip side was that, now they were mortgage free, they had more disposable income to enjoy their life. Their children were enjoying experiences that they hadn’t experienced before and their relationship had reached to a new high. This was a great advertisement for property management, but a demotion in terms of current investment in the property industry. What was lacking from this 60 Minutes article was any enquiry from the interviewer. They would not ask questions about making a house a home, what was it like not to be able to do what they wanted to the property, what it was like not to make a home or what traditions a family would have without a home. Considerations like capital gains, retirement and leveraging off the family home to create a better investment platform seemed to have been completely forgotten by the interviewer. The program was a straight criticism of owning your own piece of dirt in Australia, thus dispensing with the ‘Great Australian Dream’. Seven days later, the finale of The Block occurred. We saw Scott coming into the room and revealing the reserves set for each couple. It

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was clear from the outset that the prices were high and were designed not to give away a lot of money. This was the most watched Channel Nine program for 2011. It was an opportunity for those who wanted to enter the property market either as a seller or a buyer to experience the excitement of the property industry. All properties were offered for sale by way of auction and three of the four were passed in. Was it the reserve prices? Well the producers of The Block didn’t admit to that. What the public saw was a lame property market!! Consumers who did not want to place their hard earned dollars on the line to buy a property.

professions. In 2009, the New South Wales acting Minister for Fair Trading, the Honorable Gary West, published the top 10 most complained about industries in Australia. Real estate did not make the top 10. Yes, builders, used car salesmen and travel agents did make the top 10. Number 1, was the white goods industry. We have heard nothing about this in the mainstream press. Now I have watched Buﬀy and Silence of the Lambs, it is time for some super hero to emerge from the peak industry groups to promote this highly important but maligned industry. Channel Nine didn’t mean it, but gee it hurt.

In eight days, the Australian public had seen couples promoting ‘not to buy’ and the next week demonstrated that the public didn’t want to. I felt like I was watching two television classics. Channel Nine was Buﬀy, killing off the vampires of the real estate industry. What was more frightening was that, I was certain I was watching Silence of the Lambs. More than a week has passed since The Block and writing this article and I haven’t heard anything from those advocates of the real estate industry. The Real Estate Institute of Australia, its various real estate institutes around the country, the Property Council of Australia, the National Real Estate Franchising Association, and other peak industry groups have been silenced. As was Clarissa in Silence of the Lambs. I can hear all the real estate agents bleating in the expectation of slaughter. What do I hear from the industry protectors? Silence. Did they not see the eight days of terror? Or is it that they believe the bad press about our industry. One of the prime indicators of this economy is new buildings and property transfers. It is important for the health of this country that the property industry is promoted and most of all protected. Many have proven they will not protect the real estate industry. Politicians have demonstrated that they believe the real estate industry is a deserving whipping boy when requiring publicity. Hence, the industry needs advocates who stand up and protect the core of this country. Real estate agents are always considered with solicitors and motor dealers as three of the lowest

Bailey Compton Managing Director Leverage Australia and the Australian College of Professionals Bailey is a leading property solicitor and a licensed Real Estate Agent. Bailey has been described as one of the best legal minds in the real estate and property industry. The thousands of people who have heard Bailey speak have stated that his power is in the making of legal concepts simple for everyone to understand. The unique mix of legal and real estate talents allows Bailey to speak about property in a profitable and safe manner.

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unique access to special discounted rates, and are constantly searching the market for the best home loan product available. Some of our special interest rates are better than the bank’s own staff rate! Best of all, for the agents, it’s a “white label” solution that adds a level of sophistication to their website whilst delivering a tangible finance benefit as well.” Key features of Rates Direct • A powerful financial tool for your customers, providing an impressive addition to your existing online capability. • Provides full transparency on the current status of the home loan application and anticipated settlement timeframes. • For real estate agents, Rates Direct provides potential revenue for property not necessarily sold through your business. • Strengthens credibility by having your brand next to the major bank logos. • Enables the prospective buyer to compare features such as loan interest rates, bank fees and terms and conditions. • A powerful Customer Relationship Management system, enabling partners to easily log on to check the status of their loan referral and settlement commissions.

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Agent Profile

Eddy Piddington

What is your point of difference, what sets you apart from your competing agents?

conservative. Our brand and reputation is built on ethics and results”.

I think one of my key points of difference is my energy level – especially at the moment! Right now I am on a massive detox and I haven’t had any alcohol in two months or any coffee in six weeks. I am currently carrying so much positive energy it’s insane. I think energy is something that is contagious and I see my clients getting as excited as I do when talking about their property.

Then I tell them why. I say, “Mr and Mrs vendor, as you are aware we are currently in an OK market. In these markets agents get desperate for work and will do absolutely anything to win your business. Right now in the marketplace only one in every two properties are selling in the first two months. This is mostly because agents are going in and over pricing them from day one and hoping to get a result. Buyers aren’t stupid and see straight through this.”

Also, I use a lot of statistics. Mostly because as a younger agent I need to know more about my client’s area and the property than most other agents. I will also drop lines like, “My current average days on the market is 20.3. Make sure you ask each agent what theirs is.” I do this because I know most of the other agents won’t even know their DOM.

How do you handle the issue of other agents placing higher figures on properties to obtain listings? This is SUCH a good question right now in the current market, and a frustrating one too! I think the biggest thing I do in this current market is preframe. From the very first meeting with my clients I say to them, “Just so you know if you are seeing four to five agents we will usually come in the most

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I then give a case study, such as, “I just sold a property in xYZ. This property had been on the market since December last year. It was on with one agent for three months and another agent for four months. These agents will remain nameless. I took the property on, told the owners the truth, put in place my sales system and strategy and had it sold in 16 days.” (True story!) The reason the other agents couldn’t sell it was firstly pricing and also laziness.

Does everything have to be online these days, or does print advertising still hold a significant place in the industry? Great question! Being 25 years old and a lover of technology I am all about the social media and

Agent Profile

online marketplace. But, in saying that, I still get 30 per cent of buyers from our local print source. Why? Good question. I wonder why would people bother going out in the cold to get the paper and then take time to look through everything to find their one property verses sitting in their bed in their pyjamas reading an iPad, looking at photos, videos and agent details. Why? It is because people get lost in the online marketplace! With the newspaper I find people will see a great ad, cut it out and then bring it with them to an open. When they’re browsing online there is so much to look at, they get lost and forget half of what they have just seen. It is still a super important strategy to marketing but it is important to combine internet marketing and media. I have approximately 500 followers on my business Facebook page and 250 followers on Twitter which is great but I haven’t listed or sold anything from it yet. It’s simply just good brand awareness. Check it out at: www.FacebookEddy.com

How important are Customer Management Systems (CMS) in your day to day activities? This is an interesting one as more and more advanced systems are coming out. We are about to move to a new system in our office which I am excited about. I think with these systems people get caught up in the sales pitch and costs. They think if I spend $5,000 on a good database it will make the calls and get me listings! Unfortunately the work load doesn’t get easier. I use Microsoft Outlook as my main database at no cost to myself. It may seem funny but I have all my clients in Outlook but when I call through past appraisals I get my folder down and go through each property from front to back, old-school style. I know some of the highest earning agents in Australia and they don’t even have an electronic database. They have a manual one. It’s not the database that matters, it’s what you do with the data inside there that counts.

How do you pass on feedback to your vendors if it is unflattering? I remember when I first started in sales, I was scared about doing this and was trying to be the owners’ best friend and not offend them in any way. Again, this is another time it is important to pre-frame. In my ‘set-to-sell meeting’ I am upfront with them and say, “Mr and Mrs vendor I just want you to know I will not sugar coat any of the feedback from the

buyers. At the end of the day I don’t want to be your best friend. I want to be your best real estate advisor and if I don’t pass on all the feedback – good and bad – we will be sitting here in six months still not sold. Are you ok with this?” Nobody has ever said no. They really appreciate and respect my advice. I will also pass on each buyer that has inspected the home and all of their feedback so it’s putting it back on the buyers rather than me.

It is funny as dad started off in entertainment all over the world. When I left school I became a DJ – DJ ESP and had residencies at most of Sydney’s best nightclubs, including Chinese Laundry, Home, World Bar and many more.

How do you get repeat business from your past clients?

What has been the biggest highlight so far in your real estate career?

By doing a damn good job! I can’t give away all my secrets and strategies, but I just keep in my mind, “What can I do today to keep this client for life?”

Wow, this is a hard one! So many great things have happened. One I will always remember is the day I went for a listing in Northbridge – nowhere near my area. It was my first year in sales and I was 23 years old.

What are the challenges for real estate agents in your area of Sydney? There are approximately 90 different agents servicing my area so there is a lot of competition. I am 25 years old and this is my third year in sales on my own. I think time in the business is a big issue. We are currently coming up against agents dropping their fee to 1.5% (my average is 2.2%) and paying for marketing which is very frustrating and hard to win. This, combined with over pricing the property, can make things almost impossible sometimes.

Then later in life dad went into sales as I have done in real estate. I am following the footsteps of the big dog. Still big shoes to fill!

I was up against a local agent. He was the principal of the office and went in at 1.75%. I won the listing, signed the client up at 2.75% and sold the property in six days. She is a client for life. I then sold her a property in Fairlight. The best part was I was only 23 years old but the agent I went up against has been in real estate for 23 years.

My father was the famous Australian Sydney Piddington who died the day before I started school when I was five years old.

Another highlight has been the awards I have been up for: I was the youngest person ever to win the 2008 REINSW Awards of Excellence in Residential Sales Achievement, and also the youngest person to ever win the 2010 REINSW Awards of Excellence in Auction Marketing. I am also a finalist in this year’s REINSW Awards of Excellence for Auction Marketing, but the winner is announced later this year. Fingers crossed.

Upon reflection, I was greatly influenced and encouraged by my mother Robyn and enjoyed being involved with her in the restoration of many of Leura’s historical properties.

I like the REI Awards because they combine all agencies in New South Wales. Not just one franchise. They are amazing and it is nice to be recognised – especially at such a young age.

I heard a lot about my father and grew up with an inbuilt determination to ‘follow in his footsteps’ – showbusiness and sales. He was the greatest exponent of Extra Sensory Perception in the world – hence my initials ESP.

What would be the number one reason behind your success to date?

How did being the son of the famous Sydney Piddington influence your foray into the real estate world?

My father had a listening audience of 22 million on London’s BBC radio. He retired from showbusines, went into sales and was recognised as one of the greatest salesmen Australia ever saw, as sales director of Channel 7 and advertising director of the John Fairfax Media Group. Later in life he lectured throughout the world on ESP, presented his Piddington Plan and its application today to success in every business – particularly sales.

Focus, commitment, working damn hard and keeping positive. I am also part of an amazing office – Cunninghams Property. I have worked in three different franchises prior to Cunninghams and none of them come even close to comparison. John Cunningham is an amazing friend, mentor and lastly boss. Our friendship and having him help me grow is our priority which is unusual in this business. We even surf together. He is an amazing man and without the support of John and our office I wouldn’t be where I am today.

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Agent Profi le feature name

Eddy and the team at Cunninghams Property.

You helped form ‘The Young Agents’ – why is this group important and what challenges do young agents in particular face?

to start in real estate and three months later be driving a $150,000 BMW and wearing a $10,000 Rolex! This doesn’t happen... Not in a year anyway!

Yes, we have two groups:

Last year the statistics showed that 82% of agents quit in the first 12 months. Pretty scary stuff. It doesn’t worry me though, the less competition the better! But it does show this isn’t an easy business. It is for the toughest of people and if you stick at it and stay focussed you will probably make it and love it.

• The REINSW Young Agents Chapter • Young Agent Super Club Both of these groups are an amazing help to young agents and they both run quite similarly. The Young Agent Super Club started with just two of us, my good friend Jason Featon and me. When I was at a past company we were hooked up to be accountability partners and met once a week to practice scripts and dialogues, and help each other out with various support. A few years down the track we now have about 50 members from all over NSW. One guy even drives up from Canberra each month to meet with us. We also have other help on board now which is great too. As I have got busier I cant dedicate as much time and another good friend of mine Adrian Bridges is putting a lot of work into the group which is great. We are actually meeting tonight and listening to Tom Panos – the News Limited Sales Director. He has a great story and is a great man. The REINSW Young Agents Chapter has grown insanely over the past two years when we started it. We have around 1,000 members from all over Sydney which is great and meet quarterly to listen to great speakers. I am currently the deputy chair person and about to step into the chairman position. Braden Walters and myself have put a lot of work into getting the group to a reasonable level. We are currently organising our end of year party which looks like it will be at Pool Club at the Ivy and have a very good speaker lined up for it. Between these groups we have had speakers like: John Cunningham, John McGrath, Jason Boon, Mat Steinwede, Ivan Bresic and many more. Interested in joining these groups? Just give me a call – 0414 333 907.

What advice would you give to those just starting in real estate? I believe one of the biggest parts of making it in real estate is giving it time. You won’t make any real money for the first three to five years. You need to look at real estate like university and say for around four years I won’t make much but after that look out, because that’s when the fun begins. I think a lot of people look at agents from the outside and see the flash cars and watches and nice suits and say, “Hell yeah this looks like me!” They expect

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Eddy Piddington Cunninghams Property Winner at the 2008 and 2010 REINSW Awards for Excellence, Eddy Piddington is a highly recognised and respected real estate agent, auctioneer and one of the select few accredited property specialists. With a business philosophy aimed squarely at combining a huge level of communication, innovative marketing, a proven sales system and superior results, Eddy Piddington proudly represents the new age of real estate changing the face of the industry. His proven ‘track record’ in achieving award winning results, gives his clients a vastly superior experience. Eddy’s testimonials confirm his exceptional commitment to keeping the best interests of his clients at heart and his recognised ability to connect the right clients with the right properties, combined with his powerful approach and determination to go ‘that extra mile’ leads to constantly outstanding results, creating ‘clients for life’.

As I mentioned earlier, it’s also REALLY important to be part of a great office and working environment. It is a cut-throat industry and some people prefer to watch you fail than do well. I learnt this the hard way. Also join our young agents groups. They are a great source of support and help and of course fun.

Why are first impressions so important? I have read a lot of books on selling and done hundreds of hours of training and first impressions are always super important. Even the Lynx [deodorant] ad on television has the call of ‘first impressions last’. When people meet you they make a judgement within the first 30 seconds of meeting you. That’s why this is the most important time to win them over. If you don’t impress them in that time frame then it’s too late to catch up.

With his initials ESP, Eddy is known for his outstanding business pedigree. His late father Sydney Piddington was the famous Australian entrepreneur and sales executive who, as sales director of Channel 7 and the John Fairfax Media Group, was recognised as one of the greatest salesmen Australia ever saw – Eddy is proud to be following in his footsteps. 2011 is another amazing year for Eddy, he has been nominated for 2011 REINSW Awards of Excellence, his average days on market is just 22 and many of his properties have sold in excess of his clients’ expectations. Eddy is well known and respected in the local community. Living in Sydney on Manly’s beachfront, he enjoys surfing, racing mountain bikes and motor bikes. Much of his spare time is given to supporting many charities and performing fundraising auctions. Robyn Piddington supports Eddy at open homes and auctions and brings her long-standing experience in property, public relations and marketing to the Piddington Team.

» Professional PhotograPhy & twilight PhotograPhy Jason attard Photography is the leading real estate Photography specialist, and has been for the past 7 years. if you are after Professional Photography, floor Plan or maybe a high resolution 360 Degree virtual tour for your property, we can adapt to all requirements. we pride ourselves on quality and friendly service with fast turn around, we understand that everyone is busy and requires urgent attention. we can customise for your business with company colours and logo’s to add that extra personalised service. for further information or to organise your photography requirements, please contact Jason.

w www.jasonattardphotography.com.au e jasonattardphotography@msn.com p 0411 406 608

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Industry Q&A

Q A

Industry

ALAN KOHLER, EEDITOR-IN-CHIEF DITOR-IN-CHIEF OF BuSINESS SPECTATOR AND EuREKA REPORT,, AS WELL AS HOST OF INSIDE BuSINESS AND FINANCE PRESENTER ON ABC NEWS, SPEAKS TO THE AuSTRALIAN REAL ESTATE REVIEW.

Given the current economic climate, how does residential property investment compare to other forms of investing? Over the long term, residential housing investment is a good investment. The statistics suggests that it performs slightly worse than shares over the long term, but not much worse. An advantage of residential property is that you can borrow more against each investment and potentially more safely. Residential property also is less volatile, which is part of the reason that you can borrow more. As we’ve seen lately, the share market is extremely volatile, so residential property is not a bad investment for people who don’t like volatility.

What mistakes do property investors make, and what makes a good investment? The most common mistake people make in investing in property is to not treat it like an investment but to buy a house that they’d like and hope that it works out. In other words, you have think what’s a good place to invest, what’s the most likely to get a good rent, and so on. People often spend too much, renovate too expensively, and also tend not to do the kind of

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research that you would otherwise do; you have to do a lot of research.

Can you speculate on house prices over the short-medium term?

How does residential property investment compare to commercial property investment?

If there’s no new big crises caused by what’s going on in Europe and America, then all else being equal, residential property values will probably continue to keep declining because Australians are looking to reduce their borrowings. There’s certainly less appetite for borrowing money to buy expensive houses, and people are saving more. Looking at that picture there’s likely to be a gradual decline for a few more years – flat at best prices. If there’s a major crisis, like there was in 2008, or worse, then you’d see a much more significant fall in property.

Commercial property is much more aligned to the economy than residential property. Residential property tends to have to do with demand for houses; obviously it’s impacted to some extent to the economy, but commercial property is all about retailing or manufacturing or offices, and that’s mainly about finance.

Many argue that the Australian dream of home ownership is under threat. How accurate is this claim, and what are the causes? Home prices have become relatively unaffordable compared to both the past and compared to other countries. It’s much more difficult for young people to get a house these days; there’s nothing unique about that statement, everyone knows that. The causes are, firstly, a shortage of houses caused by high levels of immigration; and, secondly, a big increase in household debt.

Commercial construction and new home building seem to have taken a relative dive in recent times. Do you see any light at the end of the tunnel? I think retailing and manufacturing in particular are weak – there’s no need for more shops and there’s no need for more factories – I don’t think there is much demand. Also, developers have had a lot of difficulty getting money from banks. There’s been a decline in supply of development because of funding shortfalls, and demand is

Industry Q&A

Alan Kohler’s EUREKA REPORT: GUIDE TO PERSONAL INvESTING By Alan Kohler with Barbara Drury Tap into the resources of Australia’s No. 1 Investment Report to learn the fundamentals of: • Goal setting • Borrowing to invest • Investment structures • The property market • Tax planning • Superannuation Alan Kohler’s Eureka Report Guide to Personal Investing provides the tools you need to understand all aspects of your personal finances. Written in plain language for the self-directed investor, it will help you seize control of the money accumulating in your superannuation, your home and, most importantly, in your investment accounts.

Alan Kohler has been a financial journalist for 41 years. He wrote the Chanticleer column on the back page of the Australian Financial Review for four years. Appointed deputy editor, then editor of the Financial Review in 1983, he returned to the Chanticleer column in 1988.

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in decline because retailing and manufacturing are going through difficult times. The banks of late have been more interested in lending for residential than commercial.

It’s widely held that Australia is experiencing a rental crisis, particularly in capital cities. What do you see as the causes, and what are some viable solutions to this issue? There needs to be more apartments built. Again, there’s been a problem for developers to get funding. There’s some sort of market failure there, but government doesn’t seem to have a lot of stomach to get involved. The government is also short of money too, so there are problems.

Given the global demand for Australian minerals and resources, is Australia’s economy insulated from financial crises in US and Europe? Australia’s economy is more aligned to China than it is to Europe and America. As long as China keeps growing in the way that it is, at between eight to 10 per cent per annum, then Australia will do relatively better than Europe and America and Japan.

Do you think Australia’s plan to introduce a carbon tax and the Minerals Resources Rent Tax (MRRT) will make a significant impact to Australia’s international competitiveness in this sector? The Australian economy is getting weaker; there’s now talk about interest rates being cut rather than increased, which shows that that’s the case. There are people calling for the carbon tax to be put off given the weakness in the economy. If it’s true that the economy is weak this time next year when the carbon tax is due to be imposed then there is a good case to put it off. In terms of competitiveness, it is a cost, it’s meant to increase the costs – that’s the idea of it. Our trading partners are not proposing to increase their costs in the same way. By its nature it will decrease our competitiveness; it’s not necessarily meant to decrease our competitiveness, but that’s clearly the impact of it. The only questions are: whether that’s warranted; and secondly, whether that’s a good idea under the circumstances.

Between 1992 and 1995, Alan was Editor of The Age newspaper in Melbourne. Since 1995 he has worked for the Australian Broadcasting Corporation first as a business and economic reporter on the 7.30 Report and then as a finance presenter on the nightly news and presenter of Inside Business. Up to July 2007 he also wrote columns for John Fairfax publications, The Age, the Sydney Morning Herald and the Australian Financial Review. Alan is currently Editor-in-Chief of Eureka Report, an online independent publication for investors, plus Business Spectator, a new 24-hour-a day business news and commentary website. He is also chairman of Melbourne University Publishing.

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Finally... protection for agents, vendors, landlords and tenants at open Inspections

A new concept of insurance and security specifically designed for open home inspections, was recently launched by well-known real estate industry figure Peter Kelaher. Kelaher approached Channel Nine about using his new service during The Block 2011 and the producers were quick to engage him, believing that it added real value for visitors during it’s open inspections.

The Founder and Managing Director of Open Home Insurance & Security, Peter Kelaher, has teamed up with major players QBE Insurance, MSS Security and the real estate industry’s Campaign Track to offer what they believe to be the ultimate package in regards to protecting homes from theft and damage during open inspections. He sees his new venture as an Australian first and “the next big thing” in real estate. In essence, Open Home Insurance & Security is designed specifically to protect vendors, landlords and tenants during open home inspections by closing a loophole in the vast majority of standard Home and Contents Insurance Policies. It’s a little known fact that when people are selling or renting their homes, they’re unlikely to be covered for any accidental, malicious damage or theft that may occur when their homes are open for inspection. As Kelaher says: “Once you’ve invited people into your home for an open inspection, most insurance policies don’t allow for a claim against theft or damage ... and in the eyes of insurance companies, that’s exactly what you’re deemed to have done when you open your home for inspection.” Tailored specifically for these occasions, Open Home Insurance & Security offers two simple, affordable, comprehensive and essential protection measures to deter thieves and protect against damage and theft. • Firstly, an insurance policy from $295 that provides cover for accidental and malicious damage, inclusive of theft, for up to $5,000 when selling or leasing your property. Nil excess applies to policy. (Higher sum insured’s available). • Secondly, licensed on-site security personnel at your open inspection who complete photo identification checks on every visitor entering a home, leaving the real estate agents to concentrate on prospects, not suspects. Kelaher says that when customers engage Open Home Insurance & Security, they benefit from a number of deterrents that stop thieves from even contemplating coming to their open inspections. The first is visible signage on Internet advertisements advising people they may be asked for photo ID or be under video surveillance at the open inspection. The second is an A-frame Open Home Security sign displayed at the front of the property during an inspection, advising people that security personnel are presently on-site.

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Kelaher says he has spoken to many solicitors and conveyancers who now feel it is their responsibility to advise their clients during the preparation of their contract for sale, that they might not be insured during open for inspections. He also says that these solicitors have told him that agents should advise their clients that they might not be insured and that while they will show extreme duty of care at an inspection, they can’t be held responsible for theft or damage. Some agents who have had the unfortunate experience of attending the CTTT (Consumer Tenancy & Traders Tribunal) in NSW receive a shock to learn that Clause 61, Sub-Section 2 of the new act, says that the agent or the landlord can now be held responsible by the tenant or vendor should something be stolen or damaged at an open or private inspection. Kelaher says that theft and damage is not rampant at open inspections, but when it happens, it can be a very drawn out, embarrassing and expensive process for the agency. “Now… if a vendor or landlord takes out this new insurance policy and theft or damage does occur at an open home inspection, the gap has been removed,” says Kelaher. “It’s made very clear that agents are there to concentrate on ‘prospects not suspects’ and that, should anything happen, any claim will come straight to Open Home Insurance & Security, not the agent.” For more information on Open Home Insurance & Security go to: www.ohis.com.au or call 1300- 366 738 Australia wide. OHIS is a Corporate Authorised Representative (CAR 408369) of Underwriting Australia Pty Ltd (AFSL 322536)

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Recruitment

How to nail that

JOB!

IN THE WORLD OF JOB APPLICATIONS AND INTERvIEWS THERE ARE CERTAIN DOS AND DON’TS. MARGARET AMBROSE REPORTS ON HOW TO STAND OUT CORRECTLY WHEN GOING FOR THAT DREAM JOB.

“In any industry, getting your CV and job interview right is important, but in real estate, there are certain factors that can mean the difference between booking a second interview and don’t-call-us-we’ll-call-you.”

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Recruitment

he real estate agent who had advertised a position for a property manager was slightly amused when a candidate phoned to say he was going to be a little late for the interview because he had gone to the wrong address. Poor guy was probably nervous. They became irritated (and a little bemused) when the candidate, who was only 30 minutes away, took an hour and a half to get to the correct address. And they were resolved that he would not get the job, when he finally did arrive – stinking of alcohol. “Perhaps this tendency to drink early in the morning explained his choice of attire – a purple suit, black shirt and white tie and shoes,” laughs Jeanette Hockney, a Director of Buckmaster Hawkey, a Melbourne firm specialising in recruitment for the real estate industry. “Suffice to say it was a fairly short interview – but when we first met this agent, they delighted in telling us the story and the candidate is still fondly remembered!” In the world of job applications and interviews there are certain dos (smile, know the company’s core work) and don’ts (lie, answer your mobile), and in the world of real estate job applications and interviews, Darren Gorrel, New South Wales state manager for Gough Recruitment, has seen his fair share of don’ts. There are the dumb blunders: “One real estate agent lied on their Cv and when a reference was conducted it was discovered that they had not worked at the agency,” he recalls. Then there are the loose lips: “Another real estate agent was being negative about someone in their current office during an interview. Turns out that the person was the potential employer’s brother-inlaw.” And then there are the ‘sprung bads’: “A real estate agent cancelled an interview because he was sick. His Facebook page showed photos of him at the pub drinking with mates.” In any industry, getting your Cv and job interview right is important, but in real estate, there are certain factors that can mean the difference between booking a second interview and don’tcall-us-we’ll-call-you. Top of the list is strong communication skills. Real estate is an industry that depends entirely on perception, communication and the ability to build a rapport with someone you have just met, so it’s vital that these skills are displayed in the interview. “You only get one chance to make a positive impression,” says Gorrel. “If you don’t display strong communication skills a candidate will almost certainly be unsuccessful.”

Stand out from the crowd “Many real estate agents underestimate the attractiveness of skills they have, which are not

directly related to the job they are applying for,” says Hockney. “First and foremost amongst these is the ability to speak another language – this is an attribute which is highly desirable in many real estate offices.” Agents, she says, should think about all the skills they have and consider whether they might make them stand out from the crowd. “Training in areas relevant to the working of a real estate office is another area to highlight. Qualifications in accounting, marketing or law are particularly prized.”

Creating a stand-out CV Deciding on the content and presentation of a Cv is a balancing act. On one hand, you know that your Cv could be just one in a pile of hundreds of Cvs facing the employer and you want to stand out. On the other hand, you want to present a professional image, not look as though you are relying on window dressing. In his experience, Gorrel says the most successful real estate candidates offer clear, succinct and un-fanicful Cvs. “Present the Cv in a readable font with no fancy formatting or background pictures,” he says. “Keep the Cv as short as possible – no more than two or three pages.” Hockney agrees. “When an agent, representative or property manager is dealing with a client’s property, they are working with an asset that is worth a lot of money,” she says. “Employers will want to know that their new staff member brings a serious attitude to their work. “If you worked in different jobs with the same employer, include each position and the length of time in each role,” continues Hockney. “This will highlight your career development. “If you have breaks in your employment history for family reasons, travel or education, identify them. “If there is one common theme in what goes wrong in job applications, it’s lack of attention to details,” Hockney says. “The most common mistakes candidates for real estate jobs make are firing off a template cover letter to an online job advertisement with irrelevant details, and mistakes in cover letters and resumés. “Spell-check and proof read your resume before sending it to anyone,” she stresses. “You should also consider having your partner or a friend read through your resume before sending it.”

Blitzing the interview Gorrel’s number one tip for acing a job interview is to research the company doing the hiring. “In most cases a potential employer will ask ‘what do you know about the company?’ or something

similar,” he explains. “Even if a potential employer doesn’t ask the question, the candidate should express in their answers what they know about the company. This tells the employer that the candidate is interested enough to have taken the time to research the company.” According to Gorrel, other things to remember are to always be five or 10 minutes early for the interview, make eye contact and offer a firm handshake when meeting the interviewer, answer the questions clearly, and have questions ready for the employer at the end of the interview. As for interview deadly sins, Gorrel says: “Don’t be late, don’t turn up to an interview smelling of cigarette smoke, and don’t be negative about your past or present employer. Cover any distinctive tattoos. Make sure your mobile is turned off before you start the interview – don’t even leave it on silent!” Hockney advises candidates to be as natural as possible. “When you act as you ordinarily would, you will feel confident and the interviewer is more likely to gain a favourable impression of you,” she explains. Instead, use the interview to highlight your communication skills. “Never answer questions with just a ‘yes’ or ‘no’,” she continues. “Whenever possible, explain what you mean succinctly, emphasising the skills and experience you have which are relevant to the position. Also, avoid self promotion – instead you should talk about yourself and your abilities in a factual, sincere manner.”

Find the perfect job match Getting a job is not such an achievement if you end up hating the job, so it’s important that a job hunter not just find a job, but find a job that is right for them. Remember, the interview process is as much a chance for you to find out about the company as it is for them to find out about you. “One thing a candidate should undertake to avoid ending up in the wrong job is to ask the right questions in the interview,” says Hockney. “Some questions you should ask include: how has this position become available? How would you describe the culture of your company? Is it highly structured or does the firm allow employees to take the initiative? What are the company’s plans for the future?” And if you are still not sure whether this job is for you, Hockney says trust your gut. “When there is an offer you should feel a ‘wow factor’ – a level of excitement about accepting the position. If you don’t feel this way, you need to ask yourself why.”

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The good, the bad and the ugly THE TRUTH BEHIND CURRENT STAFF RECRUITING

There are GOOD people out there to fill vacant positions. The BAD part is that they are not currently looking at job boards or adverts as they are preferring to stay with ‘the devil they know’ rather than moving on to new positions. And this is the UGLY position employers seeking new staff find themselves in now! Usually there are about 50% of people looking for jobs. This is made up of approximately 17%, who are not currently employed and the large balance of 33%, who are employed however may not be happy where they are or looking for better opportunities. With the apparent insecurity of people with the economy at present, this percentage has been drastically reduced.

Real Positions is receiving numerous calls from employers who simply cannot find people to fill their positions. How they can assist is they have built up a sizeable database of people across various positions and at all levels of experience. The database not only has their contact details, it also has information from conversations and meetings as well as relevant emails, which together tell the consultants the candidate’s skills, experience, their career objectives, etc. The consultants at Real Positions are able to conduct a search on their database for candidates who have the skills and experience required for the particular position. With the shortlist produced, people are then contacted via phone calls, emails and text messages. And so the chain of communication commences and from this one, two or a few people express an interest to know more.

A number of people advise that they want to be kept advised of new positions as they come up. This is often just to be kept in the loop so they can see what is happening out there in the marketplace. Sometimes they know people who may be looking for just the position that is available. Real Positions’ consultants have combined their real estate industry experience with their recruiting and people skills, to provide expert and invaluable service to real estate offices in need of good people to fill their vacant positions.

Success breeds success GET RESULTS FORM USING A RECRUITMENT SPECIALIST

Nikki Taylor

Success stories are what this industry is all about at Real Estate Jobs Search, and we have plenty of these, however the most recent one that comes to mind includes this magazine so we thought we would share this with you.

As soon as the previous issue of Real Estate Review was released we had a call from a principal from an office in the Bayside area of Queensland. He had been searching for a recruitment agency that ICG2694 Aust RE Rev Hpg 03-PRINT.pdf

just worked in his industry for sometime as he had previous experience with recruiters that just didn’t get it! After an initial discussion with Nikki Taylor from REJS he quickly decided to engage the Services of REJS as he needed to find that “special” person to take on a role as a Property Manager however they also had to have the vision and ability to be able to grow with his company and take on a leadership role when that occasion arose.

This part of the recruitment process from a recruitment agency perspective is one that is sometimes a little scary from the candidates perspective as they are often unsure how to ask for the right remuneration without offending the principal or getting all caught up emotionally in the process. Quite often this is where the deal is lost and by using an independent party this hassle can often be avoided.

Nikki was able to quickly identify a “star” candidate from the REJS database and then set up a meeting between the principal and the candidate within 24 hours of having the initial discussions with the principal. The meeting was held and both the principal and the candidate felt that we had made the “right fit” and we then presented the candidate with an offer that was attractive enough to have this accepted without the unnecessary need for a long drawn out negotiation as sometimes is the case.

Since the initial meeting with the principal we have held a further meeting and he has now engaged REJS to exclusively recruit new salespeople for him on an ongoing basis as in his own words, “I have finally found someone who understands the industry and knows what we want!”

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10:24 AM

If you want this experience as well contact the Team at REJS on 1300 219 522, looking forward to assisting you with your recruitment needs!

Corporate Social Responsibility

Doing well by

IF MONEY’S AN ISSUE, YOUR AGENCY CAN BE CREATIvE ABOUT POTENTIAL COMMUNITY INvOLvEMENT INITIATIvES. THEY NEED NOT COST THE EARTH AND THEY BRING WITH THEM A WEALTH OF BENEFITS. DENIS MORIARTY REPORTS.

ach year real estate agents, as individuals, give away around $370 a year to charities of various kinds.

Quite aside from the matter of individual giving, though, is the question of giving through your company. Overwhelmingly, business giving is about being a good corporate citizen. While you’re still likely to get the warm and fuzzies that come from pure charity, there’s so much more you stand to gain when your business undertakes to give.

The marketing effect Marketing is a hard-headed commercial calculation, tax-deductible not because of its charitable status but because it’s supposed to feed directly into the bottom line. You’re not donating, you’re investing. Big words, but how is giving money away going to make you richer? Well, when you’re marketing yourself, it never hurts to have people love you. Real estate agents, it has to be said, are starting from a fair way behind the gun. In a recent Readers Digest survey of the professions that Australians trust most, real estate agents came in at 42 out of a possible 45, ahead only of car salespeople, politicians, and telemarketers. The good news, though, is that while Australians think the profession as a whole is a bit sus, they’re

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generally satisfied with their own agents, which suggests that the ill feeling may be based to a large extent on prejudice and stereotyping rather than the facts. And while this doesn’t mean you can just dismiss these perceptions, it should be possible to shift them back closer towards the reality if you use the right strategies. If the distorting veil of prejudice means that at first glance you’re not actually out-and-out loveable, the next best thing is to be standing next to someone who is, with them staring at you with an expression of adoration, or some close approximation.

Improving your image A good starting point for this discussion is the everpopular school fete sign advertising the bands, booths, games, stalls, and sideshows at your local primary school with, at the bottom, the name of your real estate agency. You’re being seen socialising with the popular kids – in the Readers Digest list, teachers come in at number 14 – a useful step up. All people want to reward good deeds – well, nearly all; American studies suggest that some 89 per cent of us “would switch from one brand to another brand of a comparable product (and price) if the latter brand was associated with a good cause.”

Corporate Social Responsibility

GOOD Partnership First you have to pick a partner (it’s best to start with just one). The most important consideration in any deal is the choice of partner. Real estate being fundamentally a local business, you’ll probably want to pick a local cause – and being a local enterprise, you’ve got a head start in finding out which local institutions people admire and respect and value. Don’t just commit to the first community group that asks you. Take the time to plan. Determine at the start of each year what your business’s priorities are, and target your involvement accordingly (though it’s probably wise to allow a little slack so you have a reserve that allows you to respond to unexpected fires and floods). Issues that need to be considered in developing a giving plan include: • What does your business want to pass on? Money? Time? Goods? Jobs? All of the above? • How much of any of those resources are you willing to allocate? Responsibilities to the community and the benefits of community support need to be weighed against business needs and responsibilities to other stakeholders, particularly shareholders. • Where do you want to contribute? Does your business operate in an underprivileged area where people are in need of resources, jobs, mentoring, and community services? Would the business benefit from a strong and stable local community? Would it benefit from the goodwill and customs of local people? • Which particular causes does it make sense for your agency to support? Are there any causes that are a particularly good fit for your business? You sell homes; can you create a link with homelessness, or children’s homes, or respite houses?

• Which causes are staﬀ members interested in supporting? A quick survey of your staff will soon find out. • Does the business want to show its individuality? If so, think of supporting one of the worthy groups that struggle to attract funding because they’re overshadowed by other groups with more sophisticated marketing strategies. • Does your business want to stand out by supporting causes that others shy away from? Preventing child abuse isn’t a very glamorous cause to support. Nor is domestic violence or prisoner support. But supporting the toughest causes can have the greatest community impact. Once a business has identified a community group with which it would like to work – or even a few potential partners – time needs to be spent discussing just what the community group’s needs are and how best the company can help.

A word OF WARNING … Being associated with a good cause isn’t as simple as just writing a community group a cheque (though that certainly helps). The public likes and trusts community groups, yes, but that means that they don’t like seeing them taken advantage of, which in turn means that tokenism is worse than useless. You have to take the matter seriously, and you have to ensure that both sides of the deal are genuinely benefiting from it. You have to take the business of partnership seriously.

The answer may be that the community group needs cash, in which case the company might provide a donation or a sponsorship or allow its staff to set about fundraising. If it’s volunteers that are needed, on the other hand, more organisation is called for.

Workplace giving Workplace giving allows employees to have taxdeductible donations automatically transferred from their pay. To find out more, go to www.ato. gov.au and search for ‘workplace giving’. Having a formal mechanism does encourage people to give (and that the effect is greater when the funded group has been chosen with input from staff ). Beware, though, of the dangers of asking employees to contribute without a clear and significant contribution from the business itself – it can easily breed resentment. Matched schemes often work best.

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Corporate Social Responsibility

WORKING WITH THE COMMUNITY: Some ideas! • Donate money to a community group • Offer your premises as a collection point for donations of money, food, Christmas gifts or raffle/auction items • Sponsor a community group’s event • Encourage employees to volunteer (and consider giving them time off to do so) • Encourage employees to volunteer to serve on community committees and boards • Offer any good-quality oﬃce equipment you are disposing of/replacing to a community group that might need it • Enable staff to donate money through payroll deductions • Offer to match staff donations • Offer training and work experience to people from disadvantaged groups • Offer your services pro bono or at discounted rates for community groups and/or disadvantaged residents • Loan facilities (e.g. meeting rooms) or equipment (e.g. photocopier) to a community group • Establish a grants program for local community groups • Offer a staff member for a long-term secondment to a community group • Ensure your products and services are accessible to all, including people with disabilities, those who are illiterate or financially illiterate, those who speak English as a second language, and the elderly

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One downside to official workplace giving programs is that only not-for-profits with Deductible Gift Recipient (DGR) status can take part. Getting DGR status is complicated and time-consuming, and most small (and local) notfor-profits never manage it – a recent Productivity Commission report found that there were 600,000 community groups in Australia; of those groups, well under a third are able to accept taxdeductible donations. Lack of DGR status does not, however, equate to a less worthwhile organisation. It’s often the very small groups that carry out the most important grassroots work in communities – homework clubs for underprivileged children at local libraries, animal rescue shelters that care for wildlife hit by cars or injured in bushfires, organisations raising funds for mental health research. If your business can do without the tax deduction for its own donation (or if it’s willing to reduce its donation to an amount that is affordable without a deduction) there are many, many smaller groups in Australia that could use the help and which could reward the giver. Go to www.ourcommunity.com.au/directories to have a look at some of the great organisations operating in your area.

Volunteering Money isn’t everything. Your agency can also encourage employees to volunteer for smaller organisations by giving them time off work to help out at their children’s primary school, for example, or to serve on the board of the local legal aid office, or to coach a sports team. Business Council of Australia research has found that more than 60 per cent of companies provide staff with between one and three days of paid work time for volunteering each year. The Council notes, however, that problems can arise from insufficient preparation and planning with the recipient organisations.

More structured volunteering programs, where employees are given a few days off each year to go and volunteer en masse, might be good for morale but they can easily miss the mark as far as community needs go. The story of 12 people from one department showing up with rollers and buckets to paint the walls at a homeless shelter that’s already been painted twice in the past two years may be considered an urban myth, but it’s based in truth. A corporate volunteering day can sometimes cost a community group more in time and resources than the value of the work that’s been done. It’s worth keeping in mind, too, that community groups are often run by volunteers who work in other jobs from nine to five, so there may not be anyone available to receive or coordinate volunteers during business hours. Having someone put one or two hours in once a week or once a month may well be considerably more value to community groups. Businesses can show their support by providing time off during work hours, or by giving time off in lieu (if the staff members does their volunteering outside work hours) or by matching time – for every five hours volunteered in personal time, a person might be given another five hours off work to volunteer for the same organisation. Some businesses encourage staff to volunteer by inviting them to apply for corporate donations to the groups for which they volunteer. If you do want to put in place a more structured volunteering program, make sure the work that is undertaken is of true value to the community organisation you are partnering with. volunteers might be needed for a boring job like stuffing letters in envelopes, or a more interesting task like landscaping a garden or painting a building. The key to ensuring work is of value – and therefore not just wasted time – is a careful approach and good communication.

Corporate Social Responsibility

FINDING YOUR perfect match In assessing a poten

tial sponsorship, ide ally you’re looking for: Prestige: Is this ev ent and is this org an isa tio n Do they have a hig held in high estee m in their/our loc h-profile patron tha al community? t your people can real celebrities (or be photographed at least local celeb next to? Do they riti es) for their celeb provide the aucti have rity auction (and gu oneer)? ess who’s going to Access: Is their Bo ard or are their su ppor ters influent people at the top ial at any level? Do of the world of co their events attrac mm erce or politics, na Does their Board t tional or local (th contain any leadin e Mayor? Local MP g names in special s?) ist areas? Reliability: Can yo u be sure that yo u’re not going to scandal – or vice embarrass them versa? Can you be by collapsing in a sure that their me cloud of from your clients? ssage is not going Does your capacit to provok e a back y for longevit y in lash this relationship ma Reach: Are they po tch their expecta pular? Do they ha tions? ve a lot of memb their suppor ters be ers? Do they have influenced by wh a lot of suppor ter at you do in this who get the news s? Will area? Ask for numb letter, people wh ers – members, pe o att en d th and families of cli eir ople ev en ts, pe op le who view their ents, people who events, clients read their adverti slot in their publi sements. Conside cation, or guarant r ask ing for a guara eed mail-outs to nteed agency and how their mailing list you’re helping th telling them abou e group. t your Focus: Do they se rve a tight sector of the population an area? Are they ? Are they identifie a household name d with an age gro , even in a limited up or group of househ Free advertising: olds? Are they media-fr ien dly ? Do they feature again) got any gu in the media often aranteed celebrit ? Have they (once ies or even near- ce lebrities to pull me An organisation/ dia to their events? event doesn’t have to score on all of You’ll find, though these headings to , that if you look aro be a good prospe und with care an ct. up prospective pa d attention to de rtnerships that wi tai l you’ll be able to ll fit most of them turn .

Get ON BOARD Our Community operates an onlin e Board Matching committee vacanc Service, which list ies for dozens of s current board/ community group s right around Au The service is desig stralia. ned to help indivi duals make a deep community, and er, longer lasting community group connec tion with s to access a new their pool of skilled an Find out more at: d willing helpers. ww w.ourcommun ity.com.au/board match

The Australian Real Estate Review

Corporate Social Responsibility

Skilled volunteering

QUICK Links • Find out how much is given in your postcode or by your profession: http:// www.bus.qut.edu.au/research/cpns/ publications/postcode.php?occ_ yr=2008-2009 • Australian Institute for Corporate Responsibility – practical information about business giving, partnerships and volunteering: www.aicr.com.au • Board Matching Service: www. ourcommunity.com.au/boardmatch • Australian Tax Oﬃce information on Workplace Giving: http://www.ato.gov. au/content/36719.htm • Listing of Australian community groups (search by postcode and/or interest area): www.ourcommunity.com.au/ directories • Online donations service and information on how to be a better giver: www.givenow.com.au

Rather than single a team-building volunteer day, the community group may have a greater need for the skills of one individual who can provide specialist marketing or governance advice, or to audit the books, or to sit on the community group’s board. This is skilled volunteering, and it is far more valuable. volunteering isn’t a one-way street. volunteers invariably report having gained much themselves from the experience, and sometimes say they feel they gained more than they gave. This, too, is a win-win for your business – one of the primary gains your agency can expect from its community involvement programs is a lift to staff morale. volunteer programs could also be good for your recruitment prospects. volunteering Australia research has found that 68 per cent of jobseekers believe an employee-volunteering program is moderately important (50 per cent) or very important (18 per cent) when deciding between two similar roles. In a tight employment situation, young people expect more than a pay cheque.

Sponsorship Sponsorship dollars and donation dollars usually come from different parts of a business’ budget. While charitable donations can often be at the discretion of the CEO, sponsorship proposals will usually be handled by the marketing department. These are advertising people, brand protection and positioning specialists and others who use creative ways to sell product. They must make sure that the company’s sponsorship activities are fully integrated with other areas of their marketing to provide real dollar return. When assessing a sponsorship opportunity, a good marketer will ask questions like the following: “Would the money we give to the school/club/association be better spent in placing a paid advertisement in the regional newspaper, where I can have control over the message my corporation needs to send out?” Good sponsorships might link a company to a prestigious local event, or a popular venue or popular cause. Sponsors want to show the general public what good people they are, and they want to attract

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new clients from the people who actually come to the event (or to reward existing clients). A community group’s contribution to a sponsorship proposal needs to be very different from a simple request for a donation. The group should be able to make a strong case that clearly demonstrates the potential to improve business. More particularly, sponsorship needs to be able to provide increased market share through developing positive awareness among customers and potential customers. Except in the case of very small sponsorships, a banner at the event or an acknowledgement in the program may no longer be sufficient. Depending on the size of the sponsorship, you may ask your community partner to provide any of the following: • The opportunity to network with other companies’ top level executives and other vIPs • Your endorsement on their product or activity • A strong and proven media strategy • Naming rights • A seat on the organising committee • Regular acknowledgement and features in all their publications for a nominated period • A longer-term relationship which develops and increases in value to both sponsorship partners over a number of years. To decide if a sponsorship opportunity is right for you, ask yourself the following questions: • Are we confident that we can provide a strong business case for the sponsorship? • Do we have the capacity to deliver on our promises? • Are we confident that the community organisation can deliver on its promises? • Are we compatible? Do the organisation’s activities fit with our company’s products and target markets? • Is our brand a good fit with the organisation’s activities?

The upshot There’s a lot of good out there to be done, and it’s really not that hard to find something that works for your agency.

Corporate Social Responsibility

By and large community partnerships are trouble free. They ensure the community (the general public) is behind a business; they can add a sense of meaning to the daily grind for staff ; and they provide plenty of material to refer to when a prospective employee asks about corporate responsibility initiatives in a job interview. If moneyâ&#x20AC;&#x2122;s an issue, your agency can be creative about potential community involvement initiatives. They need not cost the earth and they bring with them a wealth of benefits. For more information about business giving, go to www.givenow.com.au â&#x20AC;&#x201C; a giving service operated by Our Community.

Denis Moriarty is Group Managing Director of Our Community, which co-founded the Australian Institute for Corporate Responsibility (AICR) to facilitate better connections between business and community in Australia, as well as GiveNow.com.au, which provides the information and the tools to help individuals and businesses to give better. Our Community provides advice and tools for Australiaâ&#x20AC;&#x2122;s 600,000 community groups and schools: www.ourcommunity.com.au

The Australian Real Estate Review

Corporate social responsibility Real Estate Agents Giving Back to the Community

The Australian Real Estate Review

CSR and the real estate industry Corporate social responsibility can take many forms within the corporate world. For some, it is open and transparent business practices, using ethical business decision making processes, or voluntary contributions to the community. As a collective of many corporate entities, the real estate industry also needs to step up to the corporate social responsibility plate. So, what does this look like for real estate agencies? A core value of Victorian real estate network hockingstuart is a long standing commitment to give back to the community, a commitment which the organisation prides itself on. According to CEO, Nigel O’Neil, hockingstuart “is an organisation that helps build, develop and sustain the communities of which we are a part of.” As a franchise network, many of hockingstuart’s offices are already involved in their local community through giving back to schools, charities and other local groups. However three years ago, hockingstuart head office decided it was time to bring the network together to support a common CSR cause. Supporting Kids Under Cover In 2009, hockingstuart proactively engaged with CSR initiatives by partnering with not for profit organisation Kids Under Cover. Every night in Australia 105,000 people are homeless and almost half are under the age of 25. Kids Under Cover is a not for profit organisation that is dedicated to providing housing solutions to young people on the verge of homelessness. “The charity started back in 1989 with our founder Ken Morgan,” explained Kids Under Cover CEO Jo Swift. “He had been homeless as a young man and when he started to recognise we had a significant homeless issue in Melbourne he took it upon himself to do something about it. “For us it’s all about keeping a family together, where that’s practical. What we’ve found is that once a young person becomes homeless that’s quite often when issues come to pass like drug addiction and mental health issues that weren’t prevalent when they weren’t homeless.” Kids Under Cover‘s vision is to see every young person have access to a safe, secure home and

where possible keep families together. This happens by raising funds to construct purpose built houses and demountable studios. Their ultimate aim is for young people to stay connected with family, school and community. The organisation works in partnership with community organisations so young people receive on-going support. Considering hockingstuart’s long standing commitment to community, the real estate network saw the natural fit with Kids Under Cover which it recognised as having a mission not dissimilar to its own. “It was about three years ago that we started to look for a cause that would be aligned to our commitment to help our local communities build, develop and sustain their areas,” said O’Neil. “Kids Under Cover was a natural fit right away. To help people stay in homes was really something that resonated with us and since then we haven’t looked back.” The results Swift agreed that the partnership with hockingstuart has been extremely beneficial to both Kids Under Cover and the young people it helps. “It’s been a terrific thing and it has definitely been a rewarding journey for Kids Under Cover. When we started discussions with hockingstuart we felt that we had an incredible values match, and this is what has kept our successful relationship going. Both organisations are focused on family and home,” said Swift. Over the past two years, hockingstuart has increased awareness of Kids Under Cover in the community through consistent promotion in marketing materials including hockingstuart’s Red Magazine, early alert emails, website, property brochures and boards, and inclusion in staff email signatures. In addition, hockingstuart supports three of Kids Under Cover’s major campaigns annually including the Umbrella Ball, Cubby House Challenge and Donate a Car program. “Not many people know this but a part of every hockingstuart sale is donated to Kids Under Cover. The whole network supports the charity and this will continue long in to the future,” said O’Neil. >>>

The Australian Real Estate Review

auction a number of items on the night, which raised $180,000 for Kids Under Cover. It was a fantastic evening.” The work and results that are achieved by Kids Under Cover speak for themselves, and both Swift and O’Neil are overjoyed with what has been achieved.

>>> “On top of this however, our primary support of Kids Under Cover takes place by getting our staff involved in both the advertising of the Umbrella Ball and then attending the Ball itself. This year the Ball was circus-themed and we had about 200 staff, family and friends go along. Two of our hockingstuart auctioneers helped

The Australian Real Estate Review

“We know for a fact that in the last 12 months we’ve helped 448 young people. We’ve kept them safe and secure in a studio in the backyard of the family home. We also know that 85 per cent of those young people would have ended up homeless had they not had that studio provided for them. If Kids Under Cover closed down tomorrow, there would be about an eight per cent overnight increase in homeless figures in Victoria,” said Swift.

Getting on board According to O’Neil, participating in CSR activities is a must for any sustainable and profitable real estate business, and giving back to local communities is an activity that he says is exponentially rewarding. “Seeking out a CSR opportunity that aligns with your core business is much more meaningful for not only your company but the organisation you support. You can provide opportunities for staff to get involved and make a difference, as well as showing your clients that you care about more than just profits. “For hockingstuart it really is all about walking the walk, and reflecting what we do and represent by giving back to an issue that makes sense to us. In our case this is housing and homelessness and the security of our children.”

Discover the hidden gems of Melbourne’s entertainment, dining and shopping destinations with Little Red App for iPhone and iPad. Collected and updated from hockingstuart’s popular Red Magazine, this handpicked selection of thoughtful, considered reviews will keep you in touch with the city’s best. For more information visit hockingstuart.com.au

TTLE LI

d Red APP A PP

Professionals pour millions into community The Professionals Real Estate Group and its members are donating millions of dollars to community groups throughout Australia.

Professionals Real Estate Group chief executive officer, Glyn Morgan, said the membership group, which has more than 300 offices throughout Australia, New Zealand and a number of AsiaPacific countries, took its social responsibilities within the community very seriously. “We care for our members, our clients and the wider community as they are as much a part of our lives as we are a part of theirs,’’ said Morgan. “As a group we have committed ourselves to helping organisations such as the National Breast Cancer Foundation in Australia and the Child Cancer Foundation in New Zealand. “We have raised millions of dollars for these fantastic organisations and will continue our special relationship with them. “Our members are also very active in their own communities and many of our members are true champions of community spirit.” The Professionals Real Estate Group has long been a “Diamond Partner” of the National Breast Cancer Foundation in Australia and the group commits to raising money for the charity every year. Right across Australia members of the Professionals Real Estate Group help to raise money by running charity events and auctions at both a national and local office level. Morgan said each of the 300-plus offices in the Professionals network in Australia donated a portion of its commission from every property sale. “Our members often describe being a member of the group as being like a member of a large family, through its special culture, sharing and fun,’’ said Morgan.

One of those members who believes in giving back is Ian Wellstead, the principal of Professional Wellstead Team in the popular northern eastern Perth suburb of Bassendean.

Up in Queensland, Gold Coast property figure Andrew Henderson hit headlines recently by urging other business leaders to help support surf lifesaving clubs on the Coast.

Wellstead says he and his business donates about $25,000 to charities and community groups each year.

Henderson, who is the principle at John Henderson Professionals Mermaid Beach, said the surf clubs were vital to the Gold Coast.

About 20 per cent of that is donated to the beloved Swans District Football Club but the remainder is donated to a wide range of charities.

Henderson said his family had been long-time financial supporters of Mermaid Beach, Nobby Beach and Miami Beach surf life saving clubs for up to 15 years.

“We tend to spend a small amount on a lot of different charities,’’ he said. “For many of these charities and community groups, a donation of $1000 means a lot to them and it goes a long way.” Wellstead, who has been in real estate for nearly 20 years, says the donations are all about helping the community. “I don’t do it for marketing reasons and I am not interested in getting pats on the back. I do it because it makes us feel good,” he said. “The community has helped me to be successful and I enjoy being able to return that support a little bit by giving somebody a helping hand. That is an opinion shared by Felix Zevenboom, a director of Professionals Blackwood in the Adelaide Hills. Zevenboom says his firm contributes $15,000$20,000 to community groups and charities each year. “We don’t get a lot out of sponsorships directly but it does help lift our standing in the community,’’ he said. “Our office is in a community that is going through some changes.

“We are also part of the larger community and we need to give back to the community that helps us.

“While the region is quite well established and there are few new property developments in the region, we are seeing many of the older residents in the 50-70 years age bracket selling out while a new age bracket of 30-40 year olds are moving into the region.”

“That belief in giving back to the community and a strong sense of community spirit is found in our members throughout the Professionals Real Estate Group”.

Professionals Blackwood is the major sponsor for the Hills Choral Society and also sponsored one of the group’s events that had ties with the local Returned Services League.

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“Last month we made two more donations to the Nobby Beach and Miami Beach surf life saving clubs, which brings our family’s total contributions to close to $410,000,’’ he said. “This money was not collected as part of any fundraising activity … it’s just come from our pockets.

YOU TOO COULD

BELONG “There is a real sense of community amongst offices and employees. As a group we share knowledge and commraderie - all leading to bigger success! All the money we save in fees we invest back into the business, raising our profile and to provide a great supportive team culture ensuring retention and stability. The branding is really fresh, recognisable and our clients just love it!“ David Vertullo Queensland

CONTACT SOUTH AUSTRALIA Ted Piteo 0412 832 555

WESTERN AUSTRALIA/ NORTHERN TERRITORY David Hobbs 0417 707 768 NEW SOUTH WALES/QUEENSLAND Michelle Mulholland 0434 331 656 VICTORIA/TASMANIA John Abraham 0434 331 738 ASIA PACIFIC / NEW ZEALAND Glyn Morgan 0430 288 170

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Join Professionals Real Estate Group and experience a unique family, culture, true value for money and the opportunity to be part of one of Australasia’s most exciting brands!

Belong

Experience a true sense of belonging, with regular opportunities to work and network with your fellow members, opening up the doors to information sharing and referral opportunities.

Best Value

We endeavour to provide the best value for money of all groups.

Brand

Professionals are dedicated to maintaining a strong, fresh, vibrant and relevant brand that is easily recognisable and is considered to be one of the industry leaders throughout Australasia. The Australian Real Estate Review

Visit us online at www.professionals.com.au for more info.

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Home Styling

Styling

to get the most from your open inspections Home styling expert Jo Lemmer shares her secrets on how to realise a homeâ&#x20AC;&#x2122;s full potential by following some simple styling tips.

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feature name Home Styling

hen I began my career with LJ Hooker back in 1988 I intended to revolutionise the industry with my fresh ideas that included four-hour opens... I soon worked out that longer opens didn’t equal more buyers! I stood in many a vacant home and for the longest time I was convinced it was the best way to sell. “People can imagine their own things in the property,” I used to enthusiastically tell my vendors. It was something I really did believe. At that time of course there was no focus on home presentation. Things were so primitive we were still making liquid paper price changes on our window cards! Home styling is something that I am incredibly passionate about. When I realised 75 per cent of people are non-visual I knew this was something I had to address in the physical. It is my belief that a home should be representative of its age and architecture. It turns my stomach when I see apartment furniture put into Nana’s house! In my world it’s not about the furniture, it is about the placement. I am a strategic stylist with no formal training and this has proved to be an enormous advantage. As a Virgo I have a naturally keen eye. I like what I like and believe that the home should be stylishly made over, not masked. I don’t doubt that what I do is technically wrong but in my opinion that is what makes it right. When I initially started my department I employed a stylist. The reason this didn’t work is that she struggled to find a flow in the home.

The Australian Real Estate Review

The day she suggested dying cream carpets navy blue, was the day I took over! The eye should float across the room. It should have a seamless and peaceful feel. The eye should also be drawn to the furthest point to give the perception of space. Buyers love light and bright homes. Many that have feature brick and timber ceilings are dark. I use giant mirrors to act as windows and draw light as well as lots of lamps. Buyers love sparking windows bursting with greenery plus they photograph superbly! I personally prefer them free of curtains. Homes can look instantly refreshed and renovated when they are displayed the right way. It is also vital to remember that how they look is not necessarily how they will photograph. It’s not about what’s practical, it’s what looks great. In saying that, it needs to be believable and achievable. I am not a fan of high end style ups in mid range homes. All it does is highlight the older aspects of the property. To me it is far more impressive when you can make ordinary things look amazing. The buyer is then left feeling as though they could recreate the look when they move in, as opposed to having to hold back a lot of money to refurnish. There is an enormous swing in sentiment in many industries. Real estate is one of them. It is my belief that the public want to see a bit more skin. Realism and authenticity should be the aim of every agent.

Tricking buyers into inspecting homes via photoshopped pictures will blow up in your face. They don’t like distorted, wide angled shots and they don’t like viewing homes that have no resemblance to what is online. Sellers are also looking at agents on the WIFM basis. “What’s in it for me?” Do you value add, are you prepared to roll up your sleeves and get down and dirty with their home? You should be instructing the photographer on the shots to take, you should be attending to the barking dog next door, you should be wheeling the bins away and ensuring that the surrounding area is not detracting from your owner’s home. If there’s graffiti remove it. Alecia has a bucket of emergency items that are in her boot. What do you have? Your smile and good looks is simply not enough! Your owner is only as good as you. It is also important that the agent doesn’t look intimidating. Alecia is dressed stylishly yet casually in black jeans, jackets and boots. I appraise properties in jeans and a cap and we have a very relaxed vibe that our clients love. We even have Toby our FREE makeover hound. We prefer hugs over handshakes and we invite our owners to bring their dogs in to our office! If your clients are making excuses for their appearance when they see you, tone it down! The same can be said of your office. We have a trio of dogs in our entry, we have a red front door which is great feng shui and my office feels friendly and like the interior of a home. Lose those fluoro

Home Styling feature name

lights, add some colour and go sparingly with your awards. The public is very aware of the fakes and frauds. They are over the perfect façade that so many are presenting. It is clear that the businesses that display honesty and integrity will be those that will survive the changing times. There has been so much deception on so many levels from media to politics and as an industry we need to clean up our act. Deception and misrepresentation will destroy any business. It doesn’t matter how big or how much money, the internet can shred credibility in a second. I had such an experience only this week when it was discovered that a huge corporate agency in my town reproduced one of my blogs by simply cutting and pasting my words and attaching their logo. When this was discovered it became of enormous interest to my network. The feedback was that people are untrusting of agents and they are sick of the spin. It’s one thing to say you are passionate but actions speak much more than words. Putting in the effort on every level for your clients is the quickest way to build a loyal, supportive and trusting network. The reason I decided to go FREE with my makeovers is I didn’t want to have to sell the client on the service. By removing the payment aspect (we do charge for pick-up and delivery) I showed my clients just how much I believe in it. I put my money where my mouth is. They can’t believe that we are prepared to do all this work for no cost.

There is no doubt that every time I leave their home I have made an enormous difference to not only the appearance, but the value of the property. At the very least it will photograph beautifully and be a lot more saleable. Perfect presentation is also great for the agent. You feel confident and proud of the home. Who wants to give up their weekend to stand in a trashcan? My business is entirely web-based. I do not believe in newspapers and I believe less in the ethics behind such organisations. We spend our clients’ money promoting their homes, not ourselves. Whilst signboards are brilliant for the profile of a salesperson they are a stress to a homeowner and we only use them when absolutely necessary, say to identify the property on a busy road. I believe that a low impact approach is more beneficial to the client. Having had a number of clients that have been through the ringer with other agencies prior to me taking over, I believe we all have to exercise due diligence and that means complete transparency and honesty when pricing and giving advice. Property is so much more than bricks and mortar and the agents that are more than a slogan, who will put their clients first, will not just survive but thrive in the forthcoming market. I know I’ll be one of them, and if you make some wholesale changes to your business you will be too.

Jo Lemmer has been the top agent for Century 21 in South Australia for much of her career. In the last two years she has established ‘Who Adelaide’ a social media community that includes trading and networking sites on Facebook. It has over 150,000 members and it is growing by the day. Her Garage Sale page has around 52,000 members and exceeds 9.5 million views a month. She regularly blogs and has appeared in Home Beautiful, House & Garden and Burke’s Backyard. She personally home styles her clients’ homes and is the owner of the business.

The Australian Real Estate Review

Property Management

How to make

more from your rent roll

{RIGHT NOW} In these challenging economic times you can not only survive but turn your rental department into a profit-generating powerhouse, writes Darren Hunter.

The Australian Real Estate Review

Property Management

our property management department is a goldmine waiting to be explored and excavated. When most real estate business owners believe that they have found as much money as there is to be had in their rent roll, in this article we will show you there is a whole lot more if you will just open your mind and believe it! Even in these challenging economic times, not only can you find up to another 20 per cent more fee income (and perhaps even up to 30 per cent more) without more rent roll growth required, you may find that property management can also become the foundation of your company, paying all of your fixed overheads, allowing you to navigate safely through treacherous waters when real estate sales are down. I believe property management is one of the best businesses you can have, and in these times with a low level of real estate sales being transacted, real estate business owners are finally waking to the health that a property management department brings to the overall real estate company.

Why most departments are only getting 80-90 per cent of what they should get When working with a number of different departments we have found five key reasons why departments are earning much less than they should be, with a loss margin of around 10-20 per cent (more in some cases). Here are some key reasons: New business discounting – When the management agreement was first signed discounts were given that reduced the management fee, the letting fee and/or other ancillary fees, reducing the total amount of fee income generated per year for that property. When done enough times, this amounts to a significant drop in fee income that the department can generate. Not charging enough in fees – Unfortunately we only charge what our mindset allows (being also guided by the local property management fee marketplace). Basically, we get what we believe we are worth and if this ‘perceived worth’ can be improved and our mindset shifted, we can charge more fees as we can justify our charges, allowing us to successfully generate more profitable fees for the service we deliver. I have come across several agents who understand the power of mindset and have charged far higher fees and/or different fees than their surrounding competitors. Because they believed they were worth it and could justify these charges using solid reasoning and conviction, they received these higher fees without any real problem at all!

Rent increases – Having worked in so many departments conducting business performance health checks, we commonly see staff maximising rent when a property becomes vacant and at the lease renewal time. However we find tenancies that are not vacating or renewing to another fixed term (known as non-fixed agreements) are commonly missed for rent reviews and ‘fall through the cracks’. It is common for some rents in a portfolio to be 10-20 per cent under market value due to a lack of systematic review, or because the landlord or property manager has deliberately kept rent lower than market value to avoid destabilising the tenancy.

Big rent rolls are hard to sell – If you are fortunate enough to grow a really big rent roll, the extreme high value of it makes it difficult to sell as the cost places it out of the reach of most real estate companies to acquire. Instead it may have to be sold in smaller pieces, creating more possible problems.

Fee charging at end of month – We believe that many departments fail to charge fees they are already fully entitled to. These fees are the non-automated type like letting fees, lease renewal fees and inspection fees, ones that cannot be automatically charged each month like management fees or monthly administration fees. When these oversights are discovered, we hear common excuses from staff such as, “sorry I forgot to charge the lease renewal fee”, or “I was just too busy to put the charges through” and/or “I felt the landlord needed a freebie!”

Therefore growing big brings more problems to solve and unique challenges that need to be overcome.

We need to realise a management style of ‘set and forget’ or ‘out of mind out of sight’ can be quite financially damaging, with accountability bringing a far more profitable result on all fees charged.

Why focussing on profit is better than just rent roll growth As a national trainer I have seen many times that when we put on rent roll growth events, we seem to get very strong numbers but in contrast, profitability sessions are often poorly attended. Why is this? Simply because our traditional thinking states that rent roll growth is the most important! “Get properties, properties and more properties,” seems to be the mission statement of most real estate principals. There is no doubt that rent roll growth is vital for any property management department, however striving to have the biggest rent roll in town isn’t always the smartest objective. Here’s why: Increased workload – Every property that you bring on board gives you another landlord, another tenant, increased workload, another letting, added repairs, the possibility of more rent arrears and even an eviction and all the work that this entails. More overheads – When you grow your rent roll large enough, you are rewarded with the need to provide more resources to maintain them. These resources bring with them permanent overheads such as increased staff salaries, office equipment, car allowances and fuel costs.

Staffing issues – Finding good property managers is growing increasingly difficult and more property managers are leaving the industry faster than they are coming in. Growing the rent roll means more staffing issues, more resignations and more problems.

Again, our message is not that rent roll growth is bad, but that we should be more concerned about strategies that will increase our income per property rather than focussing on adding more properties first, before we then focus on increasing our workload and need for further resourcing.

Focussing on profitability impacts your profit margin five times faster than rent roll growth Around the country with our work in departments conducting business performance health checks, we have seen that the average profit margin is around 20 per cent. Therefore, for every property managed, 80 cents in the dollar is spent to generate 20 cents profit. However, for every dollar generated through increasing the income per property, we get to keep 100 cents in the dollar because our expense base and overheads are already in place. It costs us no more to attain it! It is pure profit pumped straight into the bottom line! Therefore focusing on profitability strategies is smarter because your profit margin will expand five times faster than through traditional rent roll growth! Working with a department recently this was magnificently illustrated. A year ago their property numbers were more than what they have today (through attrition from properties sold, landlords moving back in etc.), however after several months of implementing key strategies, their total department income per property had increased by approximately 30 per cent on what it was when we started. If their profit margin was an average of around 20 per cent of total revenue, then they have increased their total profit margin by 150 per cent! To get the same profit margin increase result by traditional rent roll growth alone, they would have

The Australian Real Estate Review

Property Management

had to increase their portfolio size by 150 per cent! To achieve this without increasing their property numbers and by not adding any extra workload or overheads is a fantastic result!

Five strategies that will make a big difference to your profit margin Here are the five key strategies that we use to make a huge difference to the fee income and profit margin of a department. It is important to know that we must measure our department each month by several key indicators, not just property numbers. These important indicators to know and monitor are: Property numbers – Your total portfolio numbers. Please note that a common mistake we see is relying on your property management software to tell you how many properties you have. Instead, print off a property list and ask your staff to cross out how many properties are no longer managed, (not counting new properties listed but not yet rented) and then count what’s left. Some may still be on there as bonds that have not yet been finalised, and though no longer managed, are still ‘active’. It is important to know accurately how many properties you have at any time. Average rent per week – A good property management system should be able to give you this figure with ease. Average management fee – Again, a good property management software platform will give you this average figure very easily. This should be monitored exclusive of GST. Average income per property per month – This is calculated by listing for the last six to 12 months your total fee income generated and also what the total property numbers were in each month. The total fees should exclude GST and recoverable income like advertising, title searches etc. Then divide the property numbers for each month into their relative total monthly fee income generated also in that month, to calculate an average income per month per property. Over the six to 12 months you can then work out your total average income per property per month. Average income per property per year – This is an easy one. Whatever your average income per month is, multiply it by 12! Our mission is now easy by implementing key strategies that can improve one of more of these important indicators. These key strategies will not only improve our income per property, but also our vital profit margin as we generate more income without added expenditure.

The Australian Real Estate Review

The five key strategies that will increase your income per property: 1. Rent maximisation strategies – As discussed earlier in this article, properties under management are commonly missed for rent review, unless reviewed systematically. By looking at each property under management every three to six months, we can identify properties that are due for a rent increase in accordance with market conditions, as long as the lease legally allows for this, as well as your state residential tenancies legislation. Most properties may well be maximised or cannot be increased due to legislative restrictions, however there will no doubt be a percentage that need to be increased, thus directly increasing your average weekly rent and your income generated per month for that property, impacting your profit margin. 2. Reversing fee discounts – Let’s face it, nearly all departments have discounted their fees at some time, and the good news is these discounts can be reversed after the client has been with you after 18 months or so. When the client is used to your service, is settled in and comfortable, it is much easier to ask for a fee increase. 3. Adding more fees – Do not be scared by this one! Whatever you can justify, whatever you believe you are worth you will get! Adding a couple of new fees can be very successful when done the right way, and adds another very pleasing result to the bottom line! By the way, we have never seen more than two per cent of clients leave a business when these strategies are implemented correctly and this strategy alone can increase your fee income by another 20 per cent or more, so it is really worth it! 4. Ensuring all fees charged – Organised and accountable departments usually do not have a problem here, but those lacking accountability with manually charged fees at ‘end of month’ like letting and lease renewal fees, routine and other fees have huge improvements to be made. We have seen, working with several offices that when systems are put into place to ensure that every fee is charged, dramatic improvements occur to the fee income by anywhere up to 10 per cent alone! That’s a HUGE improvement! 5. Ensure every property is profitable – Having criteria when taking on new properties that focus on quality and profitability is smart! However, not so smart is taking on ‘anything with a roof and front door’, this being very common. Have a policy in place that allows your staff to know what property is right for your department. These guidelines could be that you will not take any property that is below a minimum rent level and also below a minimum fee level that a property will generate in any yearly period.

Property Management

Other criteria might include: not taking on properties outside of a 20-30 minute drive radius from your office; blacklisting certain areas or suburbs where you know you will only get a lower quality tenant; and, not taking on certain types of properties that will only attract a lower quality tenant (for example – a multi-story block of flats). Consider not taking on furnished properties that might restrict your pool of quality tenants to choose from and will only bring you problems with missing and damaged furniture and further conflict with the landlord or tenant. Finally, avoid landlords who perhaps are unreasonable and over demanding, have unrealistic expectations and/or are not interested in keeping their property well maintained with respect to repairs and maintenance.

Increasing fees is a lot easier than you think! We find that reversing discounts and increasing and adding fees has the greatest impact of all the above mentioned profitability strategies, however this is also the most misunderstood. We commonly come across principals and property managers who loudly protest that their clients will not pay more in fees, and instead will leave their business. Having conducted fee maximisation strategies now over many departments in rural, regional and metropolitan rent rolls, (provided it is done correctly) we have never witnessed an exodus of clients from a business when their fees have been increased. There are several good reasons why: 1. A service industry – Property management is a service-driven industry. This means that most people want good service and see fees as a secondary issue. Only a small portion of clients are really fee driven, and will place their desire for cheap fees over the need for service. 2. ‘It is better what you know’ – For a client to change their business to another agent they must first confront their property manager whom they have come to know and trust. Secondly they have to withdraw their business including all the paperwork and then go into the ‘great unknown’ to find another property manager whom they don’t know or trust! It is far easier to wear a fee increase than go to the effort of changing. ‘It is better with what you know than what you don’t!’ is very true in this case! 3. The ‘Norm’ – What a person may grumble about now will become the norm in a couple of months’ time and is quickly forgotten. People get used to new fees very quickly!

What will stop your success? Having done this so many times, we have found there are only three things that stop you successfully increasing your department income by up to 10-20 per cent or more, and growing your profit margin by up to 100 per cent. After many years of testing our income maximisation strategies, here are the ‘drop dead’ absolute non-negotiable factors that you must have in place and nothing else, to get success. I used to teach there was just one, but I have learned that there are in fact three:

The income increase you get is permanent. Unlike rent roll growth it also doesn’t take as much effort to boost your income and profit.

Just believe and know you can do it. Go for it and achieve great things!

1. Client stability – Your landlords must be settled and generally happy (or better) with your service. Landlords who were new clients or newly acquired from a rent roll purchase in the last year, or those that might be upset at you for some reason, must be left alone for now. Otherwise, if they are happy and settled, this is the minimum requirement needed for any fee maximisation campaign. 2. Mindset – You must believe that you can achieve better fees! If you believe that somehow your portfolio is unique compared to every other rent roll in the country and these strategies will not work for you and your clients will never pay more, then your mindset tells you cannot do this, not your clients! You will achieve only what you know is possible! 3. Motivation – I have worked with several departments where I have estimated that the extra income they could generate was anywhere up to $500,000 per year, without extra rent roll growth needed. This represented their extra 20 per cent in fee income. However they got too busy with ‘other things’ and their motivation waned, resulting in nothing happening. Putting it off ‘for a few months’ is fatal every time, as your motivation wears down and the busyness of business gets in the way of success. My message to you today is that if you believe you can do it – you will! Greater income and profitability can be attained with the very rental portfolio you have right now. In these challenging economic times you can not only survive but turn your rental department into a profit-generating powerhouse that will be the foundation of your business success for many years to come, riding you through the high and lows of the real estate cycle. I always say that increasing your income per property is really 10 per cent work, 10 per cent strategy and 80 per cent mindset! The workload once done is in place forever! Unlike sales, you do not have to go out and generate the leads to get the listings and settlements again, to get paid.

Darren Hunter is a national and international property management speaker, trainer and consultant in association with the Bob Walters Team and a director with the Leading Property Managers of Australia (LPMA). Email Darren on darren@darrenhunter.com LPMA is an elite group of professionals made up of the very best property management practitioners and companies, joined together by a specialist industry association. When you join LPMA you can be assured you are connected with other professionals who represent the cream of Australian property management. You will also have access to an impressive amount of resources and value unsurpassed by any other property management industry organisation, and the ability to network and associate with the very best practitioners Australia has to offer. To be a part of the Leading Property Managers of Australia – visit lpma.com. au, or email dixie@lpma.com.au for further details.

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Franchise Issues

Lessons from

of real estate franchising THE CHANGING ECONOMIC ENvIRONMENT HAS GIvEN RISE TO A QUIET REvOLUTION IN NEW REAL ESTATE AGENCY MODELS THAT CHALLENGE THE STATUS QUO. JASON GEHRKE REPORTS.

The Australian Real Estate Review

Franchise Issues

he franchising of residential real estate agencies – one of the single largest parts of the franchise sector in terms of overall unit numbers – is undergoing a revolution.

is moving into a new phase, with many of the same conditions emerging that existed in the early 90s during the recession “we had to have”, and unemployment was nearly double its current amount.

This revolution went largely unnoticed during the booming property market which fuelled explosive price growth and pushed housing affordability to record lows. Until recently, the runaway success of the economy, easy finance and an oversupply of consumer confidence created an environment where virtually any property was in demand, and sellers would be fielding offers before the “For Sale” sign was erected.

On top of this – and this is where the real revolution is occurring – is that the traditional commission structure under which agents have operated since time began is now under siege. In a rising market, an agent’s commission may be acceptable to the seller if the agent can sell the property for a higher-than-expected figure. But in a stagnating market, buyers forced to sell at prices below their expectations will be very reluctant to hand over sizeable commission cheques.

The market boom resulted in ever-shortening intervals between listing a home for sale, and the signing of a deal. Selling real estate in such a market may have been something like shooting fish in a barrel – it was almost impossible to miss. The rapid turnaround from listing to sale, as well as the large sums to be made from commissions attracted an influx of Generation Y salespeople whose early careers have been defined by selling properties many of their friends couldn’t possibly afford to buy, and by the weekend advertisements which feature bigger photos of themselves than the actual house they are selling. But all that is changing. Real estate prices are stagnating, or in some cases going backwards. The tightening of credit markets has strangled the flow of easy-money loans. Combined with creeping doubts about job-security and a general decline in consumer confidence, buyers are no longer falling over themselves to buy real estate, shares, cars, bigscreen televisions or pretty much anything that isn’t absolutely necessary. Additionally, the current economic climate is forcing more properties onto the market as buyers and investors who overextended themselves now realise the difficulty of their position. The result is that agents no longer have to compete so heartily for listings, but instead, compete for buyers. Listings will continue to take longer to sell. Buyers will be fewer and further between, sales will be more conditional, vendors may be more reluctant to spend big dollars marketing their properties, and the costs of running an agency will start to bite. Rent rolls will assume a new importance in meeting the running costs of an agency, and the ranks of salespeople may gradually reduce as sales slow. This is not meant to sound unduly pessimistic. As a former real estate franchisor and network marketing manager myself, the property cycle

However even in the rising market, agents were coming under pressure to justify why such little effort (in securing the sale when buyers were apparently everywhere), should result in such high rewards. Under the traditional agency model, commission rates have remained unchanged for decades, while property prices have grown exponentially. When houses were under $50,000 (yes, it was once possible to buy a house for the same price as a new 4WD), a commission of 5% on the first $18,000 and 2.5% on the balance didn’t amount to much and for a $50,000 property, would come to just $1,700. Out of this the agent would have to pay for the For Sale sign, maybe also pay for the advertising in the weekend papers, driven as many buyers as possible to the property, and handled all the telephone inquiries.

business models as a threat to the viability of the real estate industry, but they do represent a career path for current salespeople who see themselves running their own agency. Such agency models are winning traction in tough times and perhaps signal the beginning of the end of traditional real estate agency models. This is a revolution other established industries within the franchise are observing. Mature business models, however profitable, are always at risk of an unexpected innovation that takes the market in an entirely new and unpredictable direction. In the current economic climate, other industries are likely to experience similar radical changes. Good franchisors will be monitoring both opportunities and threats to arise from such changes and look to capitalise on them quickly to ensure the long-term sustainability of their businesses. Those which don’t will cling to the outdated practices of yesterday as their competitors sweep past them. For regular news updates on current franchise trends and issues direct to your inbox, sign-up online at www.franchiseadvice.com.au or email subscribe@franchiseadvice.com.au

Today agents are selling properties for $500,000 on the same commission structure, resulting in a commission of $12,950, on top of which they also charge the vendor for the signage and advertising, and through the power of the internet, are no longer plagued with phone calls for details about the property which are available online for the world to see. The reward for effort is substantial, but vendors who don’t get at least an additional $13,000 in their price struggle with this value proposition. Especially now that money is tight. This changing economic environment has given rise to a quiet revolution in new real estate agency models that challenge the status quo. These models do unheard-of things like charge vendors flat-fee commissions or discounted percentages where total commission costs are just a fraction of those under traditional models. Agencies of this nature are springing-up around Australia, and some are already franchising to accelerate their growth. They are unlikely to win many converts from established agencies who view the newcomers as upstarts and their

Jason Gehrke is the director of the Franchise Advisory Centre. He is an MBAqualified franchise advisor, conference speaker, business mentor, university lecturer and member of the Franchise Council of Australia. The Franchise Advisory Centre provides advice, education and training to new and established franchisees and franchisors to help improve business outcomes. See www.franchiseadvice.com.au for details.

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Real Estate Matters

successfully

do so with purpose

THERE IS NO DOUBT THAT WHEN PURSUED IN A COST-EFFECTIvE MANNER TECHNOLOGIES HAvE THE POTENTIAL TO ADD SIGNIFICANT vALUE TO REAL ESTATE BUSINESSES OF ALL STRUCTURES AND SIZES, WRITES CHARLES TARBEY, CHAIRMAN AND OWNER OF CENTURY 21 AUSTRALIA.

y passion for innovation goes back a long way – it is certainly no secret that I have always been an advocate for technology and the development of advanced real estate business systems. My view has been that the more time you can save by minimising routine tasks, the more resources you can dedicate to the fun part – selling properties – which is why I have committed myself to developing tools that achieve this. While the technologies assisting with business management are exciting for companies themselves, they don’t necessarily generate much hype, especially amongst consumers. However, the advances made in recent years and the development of smartphones and tablets have culminated in an explosion of innovations in the real estate sector that appeal directly to the public, creating an extraordinary marketing opportunity for real estate organisations. From property specific apps and real estate games to the use of social media to generate leads and even sell properties, it is hard not to see that the real estate industry is definitely changing and with it, the communication channels we have with our clients – current, prospective and future. There is certainly no doubt that when pursued in a cost-effective manner, these various technologies have the potential to add significant value to real estate businesses of all structures and sizes – with the benefits extending to numerous stakeholders.

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From what I have seen globally I can proudly say that Australia is leading the charge when it comes to innovation. I have seen some excellent cases of consumer and business technology successfully incorporated by real estate organisations in the Australian market – both by large groups and franchise networks, as well as smaller independent operations. These businesses have taken a strategic approach – as opposed to creating expensive gimmicks, they have used innovation as a complement to strong selling skills, integrating the various tools developed into a cohesive overall business plan. Yet, as so often happens with technological reform, there remain those organisations that have not done so well, either resisting change, or rushing in with very little strategy, investing significant amounts of capital with minimal value being added to their business at the end of the day. But with innovation set to be an increasingly important aspect of the real estate industry, as in all industries, moving forward it is becoming more and more important for businesses to get it right and invest wisely.

Why is technology so important for the real estate industry? Technology is essential to the real estate industry for three main reasons – to ensure your organisation meets changing consumer expectations, to increase the efficiency and productivity of your operations, and to attract

both talented agents as well as new franchisees, where applicable, to your organisation. Today’s consumers are privy to mass amounts of information and are accessing it more quickly than ever before. And as technology advances, so too do the expectations of our customers about the services we provide. For the buyers and sellers of properties this is no different. To simply stay ahead of the curve, as real estate agents we need to be innovative in the way we deliver and present information, the speed and frequency at which we can provide it, and the ease with which our audience can access it. But realistically, agents are already pressed for time and such constant communication may not be practical, or even possible. Enter a development such as a property app which can do a lot of the work for you. Century 21’s app, for instance, sends alerts to users’ iPhones about their properties of interest whenever information changes (such as the adding of an open for inspection session), saving precious time for the agent and ensuring the client is constantly updated – satisfying both parties enormously. It is for this reason that the technology offerings of real estate companies are extremely powerful marketing tools. The provision of enhanced, more targeted services to clients and buyers in a cost effective way can help organisations generate and retain business, as well as attract media attention to a brand. Innovative tools are also allowing us to connect with customers

Real Estate Matters

in new ways and start relevant conversations even when a property sale or purchase is not imminent. Century 21 has seen this take place with Property Mogul, a fun, educational game about the fundamentals of real estate. In any business, appealing to potential employees is also fundamental. Securing the most talented staff members is in part reliant upon your offering, and the competitive advantages you can provide over other companies will go a long way to attract the best. In today’s market, the technologies you boast will hold considerable sway, especially if the tools in your arsenal are both attractive to consumers as well as effective at saving agents time. Which brings me to my next point – well developed technologies have the potential to substantially improve the efficient running of a business, allowing real estate organisations to dedicate more resources to revenue generating activities, that is, prospecting for clients and selling real estate. The best dollars you may ever spend could be on streamlining your internal processes, such as improving database management systems and controls.

Ensuring your investment in innovation is capital well spent It is no secret that various technological innovations can be expensive – both in terms of the funds required and the time spent developing and subsequently updating them. It is therefore incredibly important to make sure that this is money wisely spent and that any products developed add value to your real estate organisation and its stakeholders. It is at this point that many organisations can become sidetracked, perhaps dedicating considerable sums of capital to ‘gimmicky’, mediafriendly gadgets to simply be able to convey to the marketplace that they are up to date, with minimal thought as to how such tools can be incorporated into the overall organisation, or be of value to their customer base. A good yard-stick that I always try to refer back to when considering the development of new technologies at Century 21 is the following question – “Does this product make life easier for our stakeholders?” That is, does it give our buyers more accurate, up-to-date information and help them to arrive at a decision regarding a property more quickly and easily? Does it help our vendors run more specifically targeted marketing campaigns, leading to a pool of more interested buyers

“To simply stay ahead of the curve, as real estate agents we need to be innovative in the way we deliver and present information, the speed and frequency at which we can provide it, and the ease with which our audience can access it.” come auction day? Does it help our offices to run more efficiently, giving agents more time to qualify leads and generate business, ultimately selling more properties? Does it attract new attention to our brand?

in which they operate. While impressive and attractive sales presentations made digitally on iPads, and communication via social networking sites such as Facebook or Twitter may be attractive to many market categories, e.g. first and second home buyers, such techniques could see agents alienate other clients who are not as comfortable with these technologies. The danger with embracing innovation could be the dismissal of less fashionable marketing techniques considered by many to be outdated, such as letter box drops and personally addressed notes. In many areas they remain the most successful communication method for various market segments and should not be discounted. There is no doubt that technology has found a welcome home within the real estate industry, with the sector embracing the efficiencies that various innovations can offer, both from a marketing and business management perspective. However, it is important for organisations to ensure that they are making financial viable investments – technologies should ultimately deliver value to their clients and agents and allow real estate businesses to run more efficiently.

Depending on the development, if I cannot be satisfied that a proposed innovation will ultimately add tangible value to our organisation beyond the generation of an initial buzz, as well as assist buyers and sellers of real estate, then the investment may not be justifiable.

Effectively and appropriately incorporating technological developments into your organisation While advances in technology may look to be wholeheartedly embraced by society, there are certainly instances where its use is not suitable. The purchase of property remains one of the biggest decisions many people will make over the course of a lifetime, and I am a firm believer that the role of a real estate agent is to guide clients through what can be an emotional and/or stressful experience, assisting them to make the most suitable decision for their circumstances. While technological developments may assist along the way, they should complement the personal attributes and selling skills of the agent, not replace them. Real estate agents need also to carefully consider the demographics of the market

Charles Tarbey is the Chairman and Owner of Century 21 Australia, one of Australia’s largest and most recognised real estate franchise networks. Charles has over 35 years of experience and is the author of two industry-recognised real estate text books, Listing Rich and Profit Driven Real Estate.

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Century 21 Australia BRINGING THE WORLD’S BEST TO YOUR DOORSTEP

With thousands of real estate agents located across Australia, Century 21, the largest real estate company in the Asia Pacific region, connects a global network of dedicated property professionals under the banner of the world’s most recognised real estate organisation.

Since commencing operations in Australia under the leadership of Chairman and Owner Charles Tarbey, Century 21 has been particularly committed to developing innovative real estate tools and technologies to make the property buying and selling process less time consuming and more effective for busy Australians, while also streamlining the running of offices in order to give franchisees and principals more time to get on with the business of selling real estate. Put simply – partnering with Century 21 Australia gives you a competitive edge. Recently launched innovations that give Century 21 an edge in Australia include Century 21’s Property App for iPhone and iPad and the online real estate game Property Mogul. Both have provided Australian consumers with an opportunity to engage with the residential property market in a different and more interesting way, and have given Century 21 agents a unique competitive advantage. The free to use Century 21 Property App is changing the way people buy and sell real estate. Through the use of advanced GPS technology and a live feed to RPData, users of the App need simply to stand in front of a Century 21 listed property and they will instantly receive enough on the spot information to facilitate a quick decision about whether a property is worthy of further investigation. The App also allows users to save properties of interest and keeps them updated with any changes made to the properties, such as varying price expectations or a change in listing status. Meanwhile, for those consumers interested in real estate but not necessarily currently looking to buy or sell, Century 21’s online game Property Mogul offers a fun way to learn about the fundamentals of buying, selling and managing real estate in a fictional world. Fusing the online dimension with reality, the game prompts players to enter their postcode upon registration and via the use of advanced location-matching technology these players are then accompanied through the game by a Century 21 agent avatar which is a virtual representation of an existing real life agent from the player’s local office. For real estate franchisees and agents, joining the Century 21 organisation ensures you gain the tools and support to completely streamline

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and easily manage business operations, allowing office members to concentrate on what they enjoy and do best – prospecting leads and selling real estate. In joining Century 21, offices operate on our advanced e-Sales management system, which puts processes in place that allow offices to record, access and analyse pertinent information regarding profitability and sales data, troubleshoot business issues and monitor and track progress. As a web-based system, e-Sales essentially gives Century 21 offices and franchisees the ability to run a business at any time of day or night from anywhere in the world. Through e-Sales Century 21 real estate offices are also able to offer clients the unique Seller Login service – an online portal which allows vendors to track the various stages of the sale of their property remotely and remain completely up to date with progress at all times. Century 21 also offers its franchisees extensive business service support and training, aimed at driving the profitability of your office and maximising the potential of your business. The CENTURY 21 Learning System covers the full-spectrum of roles in the real estate industry, from reception and administration through to franchise ownership and everything in between, and gives offices and agents the skills necessary to match the performance of world-leading real estate practitioners. Century 21 Australia brings a globally respected standard of real estate practice to local neighbourhoods every day. With strong support and an ongoing commitment to market-leading innovation, the Century 21 brand continues to be held in the highest regard by the Australian real estate industry.

The largest Real Estate organisation in the Asia Pacific

The largest global real estate network With over 7,000 offices, CENTURY 21 is the largest international real estate company in the world. In the Asia Pacific region alone there are over 3,500 offices - a region vital to Australiaâ&#x20AC;&#x2122;s continued economic success. With access to a global network, strong international brand awareness, worldwide resources and a reputation as industry leaders, you will be hard pressed to find a real estate network able to match the power of CENTURY 21.

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Real Estate

Smart move.

Health and wellbeing

stress EAT to beat

LONG HOURS, RANDOM BREAKS AND A STRESSFUL WORKLOAD MEANS THAT MOST REAL ESTATE AGENTS EAT ON THE RUN, OR NOT AT ALL. FOLLOW OUR DAILY MENU GUIDE TO FIND OUT WHAT TO EAT, AND WHEN, AND WHY IT’LL DO YOU GOOD IN THE LONG RUN. CHARMAINE YABSLEY REPORTS.

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Health and wellbeing

e all know the saying: You are what you eat. So what does your daily diet say about you? If, like many busy people, who work long hours, your diet may say that what you eat is low down on your priority list. Yet, what you eat can help you think better, work longer and hard, as well as reduce your stress levels. Firstly, it’s a good idea to understand what happens to your body when you’re stressed, and how this can affect your appetite. When we’re stressed, or in a situation we consider to be stressful, an alarm sounds in our brain. This sends us into a fight or flight mode (where we consider to stay and confront the situation or ignore it). In this mode, the body releases stress hormones, including cortisol and adrenaline: these in turn, create carbohydrate cravings (such as pasta, potatoes and bread). A diet of carbs increases the blood sugar levels and encourages the body to store fat if any energy is left over. “When we don’t use this energy, and many don’t as we’re stuck behind desks rather than out hunting our dinners like our ancestors, this fat is stored mainly around our waist, hips and thighs,” says Accredited Practising Dietitian Kate diPrima. According to Dr Ronald McCoy, Spokesperson for the Royal Australian College of General Practitioners, when we’re stressed we tend to forget to eat, which can lead to an initial weightloss. “Others, however, eat to make themselves feel better, which in the long-term, can lead to weight gain.” Long-term periods of stress can also lead to depression, memory loss and incapacity to make decisions: all of which are necessary for your work. Kate has found that when her clients eat well, they report feeling better, are more likely to exercise, which leads to high levels of endorphin release, leading to reduced feelings of stress. So what are the best meals to eat for a happy, calm life? Take a look at our recommended meals.

A breakfast for champions Breakfast kick-starts your engine for the day, if you don’t start well, then you won’t run well. Kate tells clients to eat within the first hour from waking, otherwise your appetite can be switched, and then every three to four hours from then on. Does it matter what you eat then? If you’re stuck for choice, then choose eggs. Recent studies have found that eating eggs for breakfast can help you

feel full, which means you’ll be less likely to eat sugary, kilojoule-laden snacks throughout the day. If eggs aren’t your favourite way to start the day, then try cereal, which is fortified with iron and vitamins, designed to help you increase your immunity and reduce stress. (Cereals contain vitamin B, which is a strong defender against stress). “Try porridge, as it actually boosts your levels of serotonin, the brain chemical which makes you feel chilled and happy. Ideally, eat one serving of fruit, one of carbohydrates, such as wholemeal or multigrain toast or porridge, and one serving of protein, such as yoghurt, milk, or eggs,” says Kate. And what if you’re not a morning person? “You don’t need to eat breakfast immediately, although it’s best, so try a yoghurt drink or smoothie if you’re not up to chewing,” says Kate. “As long as you’ve eaten something within the first couple of hours: start small, such as an apple or piece of toast otherwise you’ll suppress your appetite and eat more and more as the day goes on. A good idea is to have a smaller dinner meal, so that you’re hungry on waking. But when you buy that takeaway, add a piece of fruit to your purchase, to snack on later.”

Long-lasting lunches Remember how Popeye never let anything get to him? It may be that there was something in those cans of spinach he gulped down whenever the pressure got too much. “Spinach contains magnesium, as well as iron,” says Kate. “A lack of magnesium can cause headaches and tiredness, which many people experience during the middle of the day. Not eating enough can also cause exhaustion.” Try a spinach salad, topped with salmon (which also contains magnesium, as well as health-boosting essential fatty acids). If you’re on the run and only have time to eat in the car, then grab a sandwich. “Make sure it’s wholemeal or multigrain bread, as these are low GI-carbohydrates, which means you’ll feel fuller for longer, rather than experience a short-burst of energy only to feel fatigued soon afterwards,” she says. And the filling of choice? “Try protein, such as chicken or roast beef or cheese, and add lettuce, tomato, cheese and avocado,” says Kate. “It’s a good way to sneak an extra veg serving in too, so add another ingredient, such as grated carrots for extra goodness.” Add a pot of low-fat yoghurt, a piece of fruit or a handful of nuts, and you’re well on the way to a winner. Top tip: walnuts are believed to be the best

snack of choice to beat stress, due to their high polyunsaturated fat content.

Weight watching dinners So will it be chicken tonight, or a couple of beers accompanied by a packet of chips? Or a takeaway on the way home. “If you’ve eaten healthily throughout the day, then your body will be less likely to tell you it’s missing something, so you’ll be less likely to crave sugary or salty meals,” says Kate. Even if you’re eating out, you can still order some worry-reducing meals. “Fish is always a good choice, as the omega 3 fatty acids can help prevent raised levels of stress hormones, as well as balance out your moods,” she says. “Team with potatoes, vegetables, such as carrots or broccoli.”

What to drink? Let’s face it. Most of us feel that the day doesn’t begin unless we have a cup of coffee. But is it doing you any good? “Stick to one cup a day,” says Kate. “More than this and it may actually increase your stress levels.” A study at the University of Oklahoma found that more than two cups of coffee a day increased cortisol levels more than just stress alone. Or pop the kettle on for a cup of char. Tea contains theanine, a relaxant, so you’ll still be alert after a cup, yet relaxed. “Stick to no more than two or three cups,” says Kate. Next time your blood is boiling, your heart is racing and you want to hide under your desk away from the constant ringing of your phone, try this easy, and free, tip. Drink a glass of water, and literally feel your stress levels dissolve.

Keep some chewing gum handy. A recent study found that the use of chewing gum was associated with higher alertness, reduced anxiety and stress, and improvement in overall performance on multi-tasking activities. Just don’t forget to remove it before meeting your client!

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A FIRM FOUNDATION IN COMPLIANCE WILL SECURE YOUR SUCCESS THE AUSTRALIAN COLLEGE OF PROFESSIONALS: YOUR COMPLIANCE MASTER

As a real estate agent, you work in an ever changing legal environment. New tenancy rules, the introduction of credit licences and national regulations in the property industry are just a few of the changes that confront you. It is important that you and your team have a firm foundation in compliance to secure your success. Many agents have lost their commission and their licence for simple mistakes. ACP’s training programs ensure compliance practices in a financially effective environment. ACP is the only college that uses solicitors and real estate practitioners who have a proven track record. Don’t risk your income and licence to anyone but the Compliance Masters. WARNING: The new real estate regulation due in 2012 will change licensing. Secure your licence now whilst you know how hard it is to get!! ACP’s licence program is designed so that people can complete the program without unnecessary impact on their business. Take the step now while it is achievable.

Technology

smart phone applications every real estate agent needs to have SMART PHONES HAvE CHANGED OUR LIvES, AND FOR BETTER OR WORSE THEY ARE HERE TO STAY. AS A BUSY REAL ESTATE PROFESSIONAL, IT IS CRITICAL THAT YOU GET THE BEST USE OUT OF THE TECHNOLOGY IN YOUR POSSESSION. JON PAIOR REPORTS.

mart phones represent the convergence of many devices. In today’s world it is not enough for a phone to merely make and receive phone calls. It now needs to be a diary, a messaging centre, a sat nav, a web browser, source of entertainment and so much more. If you are not getting the most out of your phone you may well just get left behind. I have compiled the top 10 must have applications that you as a real estate professional need to install and use on your smart phone.

Email and calendar It seems obvious to include this, but we just haven’t had this convenience on our phones for all that long. It was only around 1998 that a small, little known Canadian pager company called Research in Motion, released the Blackberry, a small mobile computer that used the mobile phone network to send and receive emails. This revolutionised the way we would receive information. Since the Blackberry many,

many other competitors have all integrated emails and calendar into their products and we now see email and calendars as an integral part of what we call a smart phone. It seems now that everyone has an iPhone or an Android phone of some kind. Today, however, it is more about the back end of your emails and calendars. For example, when you send an email from your phone, does that email appear in the sent items on your desktop email program (Outlook) and vice versa? Does your calendar synchronise automatically over phone networks when changes are made? Microsoft’s Office 365 hosted email solutions now enable enterprise grade solution, previously only economical for the large corporates, is now available to even the smallest agencies on a per user and per month basis all for less than a cup of coffee a week. Using schedules you can actually schedule when you want to receive emails on your phone, meaning that the days of the phone beeping like crazy overnight are a thing of the past.

Navigation and GPS Today almost all smart phones have GPS capability. Google Maps is the standard, it is free and it is indispensable when looking up addresses and finding street information. You can switch between map and satellite view so you can get a good idea of the area you are looking at. You can also easily find and display information such as proximity to schools, shops, restaurants, public transport and other public services. There are also many paid navigation applications such as TomTom that will help you get to that open inspection on time on a busy Saturday, with turn by turn directions, just as any in-car navigation would.

Social networking / Facebook Social media is often not enough of a part of the day to day for many real estate agents. Facebook is no longer just about making contact with your old school buddies. Agents have the ability to use Facebook to “check in” to a property at an open

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Technology

inspection and at that point provide information about the property, including photos, web links and other information. All of this can increase awareness and exposure of the property and helps both the vendor and purchaser feel that the agent is utilising this exciting new technology in the best way. You would be amazed at how effective this type of marketing can be.

RPData Every real estate agent knows about RPData’s portfolio of products for desktop computers, but few know that the smart phone app, currently available on the iPhone and iPad, places much of this information at your fingertips when you are outside the office. You can look up RPdata’s estimated value, sales history and in some locations ownership information of almost any property. Imagine showing a potential vendor client, a map of their neighbourhood with real time valuation estimates and sales history. You can also access photos, listing history and much, much more.

educating them about the tax benefits of a property based on real data. Armed with this information, you may just be able to get that serious investor across the line with your sale. In a market that many experts think is ripe for selling to investors, imagine the confidence your client takes from a piece of advice that could save them thousands of dollars. Regardless, you can make sure you match the right property to the right purchaser.

Business card scanner I use Cam Card and this is one of my personal favourites, although I am sure there are many out there. As a serious business networker, immediately after I attend a networking function, I spend a few seconds, even before I leave the car park, photographing the business cards I have collected. This app automatically enters the new contact into my phone, which in turn synchronises with my desktop email client running on my laptop (Outlook). I then have a copy of the card and my new connection’s contact details on permanent record.

Mortgage calculator There are many free applications in this space, but I have found the Mortgage Choice loan helper application to be one of the best featured and easiest to use. This application will allow you to very quickly give a potential purchaser a quick estimate on their borrowing power, repayments and even what the stamp duty might be. All of this is available from your phone, in the comfort of the buyer’s living room or at the open inspection.

Dragon Dictates The future is here. Really! Most of this article was in fact dictated to my phone and then uploaded into my word processing software. This free application recognises my voice and translates that into text that I can then copy and paste into email, or any other text editor. Using an appropriate hands free headset and bracket I can dictate my emails, projects and even Facebook posts while I am driving my car!

Angry Birds

Open Docs

One of the most popular and yet time wasting applications for any smart phone platform. It might only be just for fun, but what else are you going to do during those really boring sales team meetings? This game is as popular as it is mind numbingly addictive. Install it with caution!

This application allows you to open, view and edit Microsoft Office suite of documents. Microsoft Word, Excel and PowerPoint document access on the go. When people email you these types of documents it is invaluable to be able to make a quick change before sending it on when you are on the road.

Property depreciation and tax benefit optimisation tool Washington Brown has released a specialised application that really comes in handy with my real estate agent clients. This depreciation app provides an on-the-spot ability to highlight serious tax deductions to buyers and landlords,

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Love it or hate it, with smart phones both our personal and our professional lives can be improved. Used correctly, a smart phone can free us from our desk and allow us to get out there with our clients both physically and in the virtual world. Or even just help us workaholics achieve a better work life balance.

Jon Paior has worked in Small Business IT for more than 15 Years. He is a Microsoft Certified Systems Engineer (MCSE), and has a skill set that has enabled support for some major computing, networking and telephony projects. Jon has worked in many different diverse industries with a focus on the Information Technology needs for service professionals such as: Accountants, Doctors, Lawyers, Real Estate Agents and the like. Following the Microsoft Small Business Server product line from 4.0 (1997) through to the current version of SBS 2011, Jon is widely recognised as an expert in the field. Prior to that, Jon a geek since before the term was coined, was a co-founder of Adelaide’s premier geek hangout, valhalla LAN parties. In the last 18 months, Jon has transformed his business, Geek, into a major managed services player in Adelaide, more than doubling in size, and is expanding nationally with high profile clients such as the Australian Industry Group, Mirvac Hotels and of course including many real estate agencies. voice over IP Technology, information security and consulting are just some of the skills and concepts he brings to this market, enabling better use of available human and technology resources in your business. But mostly he’s just a geek who loves technology! For more information or even just a chat he can be reached via www.geek.on.net or jon@paior.com

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More reasons to shop at Harvey Norman As Australia’s leading computer and electrical retail chain, Harvey Norman offers a massive selection of products for the home or office at great value. But the retailer’s “biggest range, best prices” mantra is not the only reason customers shop at Harvey Norman.

Harvey Norman boasts expert staff whose product knowledge is second to none. Whether buying or just researching, you can be sure to get reliable advice about the best solution for you. Harvey Norman stores provide great oneon-one demonstrations to give you in-depth understanding of the technology you’re interested in, so you can make the choice that’s ideal for you. Manufacturer representatives frequently visit stores, and the highly trained staff combined with dedicated “test drive” areas ensure that Harvey Norman is the best place to gain hands-on experience before you buy.

Although Harvey Norman operates stores in a number of countries, the retailer has stayed true to its roots in Australia. A large part of the Harvey Norman approach is the promotion and sale of Australian made products. Leaf through their furniture and bedding catalogues, and you will see the familiar “Australian made” triangle on many products. At times, the catalogues even feature profiles on the Australian companies that have produced the featured items, so customers truly get a sense of who and what they are supporting when they buy Australian made from Harvey Norman.

The Harvey Norman advantage doesn’t end there, however. When you’ve decided what to purchase, Harvey Norman can offer you great interest free terms* for larger purchases. This means you don’t have painstakingly save up for that feature-packed DSLR camera – you can simply visit your local Harvey Norman store, pick the model you want, take it home the very same day, and pay it off in easy, monthly instalments.

Finally, there is no getting away from the “biggest range, best prices” tagline. Boasting a combination of products few retailers can match, Harvey Norman stocks everything from homewares and manchester to flooring and Apple computers. And all of it is available at highly competitive prices backed by Harvey Norman’s best price guarantee, which states that Harvey Norman will beat any genuine competitor’s advertised price^.

For those with frequently changing needs, Harvey Norman stores also offer flexible renting options*. Renting offers you peace of mind, because you don’t have worry about a new piece of technology failing to meet your growing needs a few years after purchase. When you rent, you have the flexibility to upgrade once the rental period has expired, enabling you to enjoy the latest equipment.

The Harvey Norman success story, which began as a single electrical appliance store in the Sydney suburb of Arncliffe in 1961, has grown to include stores in such countries as Malaysia, Singapore, Slovenia, Ireland and New Zealand. The retailer’s success is a testament to what Australian customers have known for a long time; that Harvey Norman offers an impressive mix of service, range, value and so much more.

Harvey Norman’s huge network of stores is another factor that works to your advantage. With more than 166 outlets across the country, chances are there’s a store near you. The impressive stature of Harvey Norman enables it to work closely with manufacturers to bring you great offers as well as unique products sold exclusively through Harvey Norman Holdings stores. The retailer’s size means its importance to our nation’s cultural and retail landscape cannot be underestimated. Whether through the sponsorship of local sports, or by providing jobs in metropolitan as well as regional areas, the long and proud history of Harvey Norman rests on a foundation of local franchisees running local stores and employing local people. The result is not only a support to local communities – it also means customer service that has more than just a hint of mateship.

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*Subject to approval. See in store for details. ^Terms and conditions apply. See in store for details.

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Real Estate Ads

It’s all about

Tip 1 of the top 10 tips for writing great real estate ads. By Ian Grace.

emember that word and you will always remember what effective advertising is all about, not just a week or two after you have read this article, but for the next 10, 20, 30 years or more. It’s the most effective way I know, to help you to understand, always, the formula for effective advertising. In fact, once you read and understand this, it will drive you and/or your partner nuts when you are next watching television and the professionally created ads come on – “there it is, HOODOO – and there’s another ad, HOODOO” – you are going to see HOODOO in every good ad from today onwards. Let me explain, while I take the mystique out of effective advertising. Virtually everyone has sold household items at some time – when they do, being untrained in advertising, all they do is describe the item, perhaps its make or brand, its condition, price, person to contact and contact details. For example, a bicycle for sale – it’s a Malvern Star, Rockbreaker, green colour with two wheels lined up one in front of the other (which is pretty handy), bell on the front, brake at the back, right handlebar, left handlebar (you get the picture?), price, person, phone number – have you seen those kind of ads? We all have – but sadly, most real estate ads are doing the same thing – merely describing the property for sale – and that is certainly not effective advertising. Professional advertising agencies obviously know what product or service they are selling, but they won’t write anything about it, or (particularly take note of this) take any photos, until they have first determined WHO will see the most value in the

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product or service they are advertising – and when it comes to real estate, they are the people who will always pay the highest price.

she can DO, as a result of her purchase, when she buys that particular washing powder. How are we going – is it all making sense?

Once they have established WHO they are aiming at, they now know how to talk to them e.g. if they are advertising a high-class department store, they may be talking in the main, to a very different audience and in a very different way, than if they were promoting a bottom of the line discount store – make sense?

Another example – imagine a television ad for a 4-wheel-drive vehicle or SUV, perhaps driving along the beach, or out in the rough somewhere. Now if you can see the driver, you can pretty well guarantee it won’t be an 80-year-old person driving the vehicle – pretty obvious isn’t it?

When it comes to real estate, families with young children, retired couples, career couples or singles, all have very different needs and values and should be spoken to appropriately, once identified as your prime WHO – obviously being aware of and using common sense, when it comes to local anti discrimination legislations. Now they know WHO, in their advertising they proceed to show and tell their target audience what they will be able to DO as a direct result of the purchase – and that is what effective advertising is all about. It’s all about HOODOO – a memory device that will always help you to remember – WHO and DO – so now you know what effective advertising is all about. Let’s test it – who’s ever seen an ad on television for washing powder? You know, the one where mum, for example, is trying to get the family’s clothes clean, but they’re always rolling in the dirt or the grease at work, whatever. Then, along comes Mr/Ms XYZ washing powder representative, who saves the day and all the washing is cleaner than clean, whiter than white – have you seen ads like that? They’ve been around for years – and as you can see, it’s all HOODOO – in this case, she is the WHO and that is what

The advertising agency will have already very specifically determined that their prime market, where most sales will be made, may for example, be 38-year-old males – that is their WHO – then, they go to the model agency and book a 38-yearold male model, place him behind the wheel, roll the cameras and there’s your ad, as he enjoys himself driving through the rough or wherever – he’s the WHO and there is the DO – simple, isn’t it? With real estate advertising, this concept is mostly totally ignored, with real estate agents merely describing the house that is for sale and as we will see later, that is not what they are selling – firstly, establish WHO will see the most value in the property you are selling and the area where it is located, depending on their particular value structure at that stage of their lives – then show them and tell them what they will be able to DO as a direct result of their purchase – now, you’ll be starting to produce really effective real estate advertising that will achieve the best end net result for your sellers. So, it’s all about HOODOO – WHO/DO – then later, when we look at putting together an effective media mix advertising campaign, we look at the WHEN and WHERE the advertising will be placed. Please see page 61 for tip 2 – headlines.

Real Estate Ads

How to create

Tip 2 of the top 10 tips for writing great real estate ads. By Ian Grace.

eadlines are absolutely vital for any good ad – in fact, it’s only the ad and/or photo that will determine if the prospective buyer decides to read the ad at all. Scary statistics show that, with all advertising, only one out of five people read past the headline of an ad. So, when real estate agents say, “When they read my ad, they will understand that...”, I point out it’s not when they read the ad, but if they read the ad. Your aim is to create ads where five out of five people, in the market you are targeting, will read your ad – then you are on the path to great success!

The solar heated pool will give you year-round family fun and entertaining.

Remember HOODOO from the first of my top 10 tips? Now, remember the WHO when you write your headline, then qualify it quickly, so the reader knows you’re both on the same wavelength. Then ideally, reinforce or remind about the headline at the end of the ad.

• a benefit or implied benefit for the reader

For example:- Headline – Swim in winter (depending on which state you are in of course, reading that headline, one would assume that to swim in winter, the pool would have to be heated, so the qualifying statement might be:-

When reading an ad, people’s attention is distracted by other ads, so, at the end of the ad it can pay to reinforce the headline and bring their attention back to what attracted them to the ad in the first place e.g.:So, if you’d like to be in the swim this winter, phone Fred Smith today on... The rules for great headlines Powerful headlines must contain one or more of the following:-

Think about it, how many of the “rules” above, does it have in that headline – yes, that’s right, all three of them. So, great headlines will contain at least one, often two and occasionally three. Another example – “Hard work does pay” as a headline for a property that needs work done to it. That headline has two of the rules – a benefit and also the curiosity element “what/how much do I have to do?” Now is probably a good time to explode a myth in the real estate industry, as it will pave the way for what else we are going to cover and help you to create better and better advertising – then enjoy the success that will bring.

• a curiosity element – but beware of gimmicks for gimmicks’ sake

Most Realtors around the world believe they are selling houses and sadly, most real estate ads reflect just that – in fact most real estate ads only seem to prove that real estate agents can count “4 bedrooms, 2 bathrooms, 1 study, 1 dining room etc.”

For example, have you ever seen or heard headlines such as:-

It is vitally important to understand that YOU ARE NOT SELLING HOUSES!!

• something that is new, news or topical at the time

Announcing the all-new XYZ dishwasher, that will save you time and money – we’ve all seen those kinds of ads haven’t we, for all types of products?

What you are selling is:- living there You see, that is the picture the prospective buyer has in their mind – living in their new home, that may have an extra bedroom or two, so the kids

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Real Estate Ads

can have their own space and privacy and the resultant family harmony. Or perhaps the extra entertaining areas, where both parents and their children can entertain their friends at the same time, but separately etc.

The list goes on.

Once an ad matches the picture the prospective buyers have in their minds about what it will be like living there, you have a match and have now attracted the right buyer.

As an example – we sold our own property in Brisbane three-and-a-half years ago, before moving to the Gold Coast – the buyers lived a two-hour plane flight away and only the husband had visited our home and made the buying decision.

When I was speaking at the NAR (National Association of Realtors) conference some years ago, Colin Powell was the keynote speaker and he told a story about a military officer who was continually transferred from base to base, city to city. Their young son was asked if it was hard for him, always living in a different home. His response was “oh, no, no, no, no – we always live in the same home, we just put it in a different house”. Isn’t that cute, but isn’t it also so true? Think about it – ever been to a brand-new display home, when they are selling new houses – they are normally decorated exquisitely and as you walk through them, you can really imagine and feel yourself living there and enjoying what it has to offer. However, when you buy the house and they take all the furnishings out, all you are left with are bare floors and walls – doesn’t look so good now, but then, you fill it with your furnishings, your knickknacks, your photos and make it your home. But after that, you need all the information to know what living there is all about – what are the neighbours like, are they friendly? Which way to the schools and what are they? Where are the nearest golf courses? Where do we go shopping? What transport is available and where? What are the quickest driving routes to my work? Are there other children in the area for the kids to play with?

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Great real estate advertising, particularly utilising the flexibility of the Internet, will answer all these questions for them.

The day before the family was due to pick up the keys from our solicitor, we agreed to meet them there, run through the pool and the spa (hot tub), their operation and the chemicals that were necessary. Their two children ran around the house saying, “There’s my bedroom, the one with the v-shaped bookshelf” etc. – they knew exactly which room they would be living in, even though they had never visited the home previously – that’s what great real estate advertising does. Oh, by the way, we had four other prospective buyers lined up, waiting in case the sale fell through. The headline for my campaign by the way, was:Relax in privacy, after a hard day And the photo – well, that will blow you away, but it takes us into a whole new realm of real estate advertising and will change the way you do your real estate advertising FOREvER!! And the results will blow you away as well. But, that is the subject of Tip No.3, when I cover your photos in detail and how they work with your headline and body text in your ads – so, get ready for a paradigm shift in your thinking!!

Known internationally as “Mr Real Estate Advertising”, Ian Grace is acknowledged as one of the world’s leading authorities on real estate advertising. Since 1994, he has delivered his programs throughout Australia, New Zealand, USA, Canada and the UK. His articles on real estate advertising have been published around the world. Ian can be contacted at amazing@iangrace. com.au or www.iangrace.com Tip 3 and tip 4 of Ian’s top 10 tips for writing great real estate ads are available at our website, www.tarer.com.au.

As a preview, John McKenna, a US-based agent, who has been following my advertising system for two years now, recently picked up a listing that had been on the market for three years – the previous agent couldn’t sell the property for $259,000, so the usual would be to blame the price and drop it to $249,000, $239,000 maybe even $219,000, just to sell it. Following what we have covered in this article and what I am going to talk about regarding photos, John sold the property in a few short weeks, for $289,000 – a staggering $30,000 more than the previous agent couldn’t sell it for. Are you ready for that kind of success? Then, be ready for my next article.

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SOLD

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In the last 12 months LM Advertising have been involved in the advertising and marketing of over $500 million dollars worth of property. If you would like to discover the benefits of an advertising agency that knows how to get your property SOLD, contact our Managing Director, Lauren Mai today. LM Advertising Property Advertising Specialists 6 Emerald Way South Melbourne 03 9645 5400 www.lma.com.au

Marketing Issues

Developing a successful

strategy DEE HOuLIHAN DISCUSSES THE RIGHT APPROACH FOR A MARKETING STRATEGY FOR YOUR BUSINESS.

n the real estate industry, marketing is a key component to your business, however with the recent substantial correction in the market place nationally; it will become more apparent if your business has a successful marketing strategy or a reactive model. A reactive model is very common amongst business that has a relatively consistent turnover and then a consistent drop in revenue. It’s plain sailing to place regular modules in the paper, refresh the window property cards, upload properties onto your website, do the occasional mailbox drop, but do you really know what is and isn’t working? Are you spending too much or too little in the newspaper? Do you encourage vendor -paid advertising? Can people find you quickly when searching online? What is your return on investment? What is your point of difference? When you have sellers listing and buyers buying, these questions aren’t attended to because business is busy making money. Reactionary behaviour is the response business has when suddenly revenue starts to dry up and overheads remain the same. Many real estate agencies fall into this trap, especially in recent times and it can be a very expensive exercise. Reactionary spends can include trying to suddenly provide the sales team with everything they claim they don’t have – printed material, a “new look”, giveaways, new kits or profiles, usually printed matter and usually no increase in inquiry or unquantifiable results. Increasing your ad space in the paper can throw you into debt quickly, decreasing ad size

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has your competitors speculating, meanwhile, your business is stagnating, staff are becoming demoralised, you risk losing good salespeople and you’re spending more money than ever before, trying to fix the problem quickly. A marketing strategy is a “plan” and it can also be a plan of “attack” to ward off slow times if you are super organised. Nearly every successful medium or large business will have a marketing strategy in place because the economy is cyclical and there will always be good and bad times in business. Based on Darwin’s theory, the business that adapts and survives will also pick up market share from those businesses that do not survive. In the last decade, I have noticed a shift in marketing strategy. No longer can we separate the item or product we want to market and focus on promoting “the product” to gain market share and consumer recall. To effectively market, a marketing strategy has to be built on understanding the entire functionality and methodology of the business. The real estate and property markets are very fluid and real estate agencies can vary enormously in both their philosophies and structure. This necessitates a bespoke solution for an independent business or franchise network. By approaching a marketing strategy for your business in a wholistic context, you can effectively plan for the next 12 months, come what may. You can calculate approximately what you will be spending on marketing and advertising, it will give your sales team direction and targets and

you can financially plan for additional expenditure prior to outlay. The key to bolstering your business is your database. If you are a real estate agency that has a Property Management department, the database is probably fairly up to date and active. Your database is effectively the key to both your business and a saleable asset. Due to the “opt in/out” legislation, spamming is reportable and illegal, and this has in fact added value to a company’s database because your database have “opted in”. To purchase a list or database is now an expensive exercise and the real estate industry have a ready-made model that should be recorded and exploited to huge advantage. If your database carries old or dead information, duplications or out of date contact details, address it now. Often a nominated existing staff member can houseclean your database quite effectively in a short period of dedicated time. Every time you or your staff interact with clients or inquiry, request if you can add them to your e-magazine, newsletter, bulletin – anything that allows you to record their details with their permission and always ensure there is an “opt out” or “unsubscribe” option on your electronic mailouts. Having a current, detailed database and staff trained to constantly add new contacts, you will be amazed how quickly your contact lists grow and this is the key to strategic marketing and the hidden benefit is, a large component of database marketing has low or no cost attached.

Marketing Issues

Remember, with a current database and routine mailouts, potentially, every inquiry is a client, every tenant is a home buyer and every owner is potentially a property investor.

been possible but Patrick has created a Facebook page and promoted via LinkedIn – the result is an active blog and phenomenal feedback, and no cost.

Some cost-effective marketing solutions include electronic mail. The majority of franchise networks now offer a property magazine and additionally a newsletter. The paperless solution to the property magazine is environmentally responsible but a large sector of the general public still like the tangibility of a magazine that can be browsed through over a cup of coffee.

Another key element to building a marketing strategy is ensuring you have great IT people. If you pay peanuts, you get monkeys and your online presence requires constant updates, refreshes and should be considered one of the most important elements to your business overall. Ensure you have optimised your business on all the main search engines, for a small outlay, you can run AdWord campaigns and an imbedded You Tube video of your company or people will help your SEO even further. If the internet is mumbo jumbo to you, perhaps employ someone to deliver what you need, be clear in what you want to achieve and a timeframe that you expect these requests to be met. There is no point spending thousands of dollars on a beautiful looking website or paying a large franchise fee if no one can find you on line!

An online newsletter is a great solution but you only have seconds to engage the reader online so always ensure your subject line is catchy or invokes curiosity and the content is concise, professional and has some interesting facts or statistics. Aesthetic appeal is also important, I call it “The Easter Egg” theory; we all know what the content of an Easter egg is and we don’t necessarily need one but it is so bright and shiny, we will always inspect them and in many cases purchase one. The same applies to visually pleasing mailouts, newsletters – everything relating to your business, backed with compliancy -to reinforce your brand. Social networking is no longer an option, it is a necessity. Facebook is usually the first to come to mind but specifically for the real estate industry, I would strongly recommend LinkedIn and any real estate forums that carry professional and beneficial blogs and feedback. Facebook is great for building an online personality and as a director of a company, a great way to scrutinise potential employees. LinkedIn and real estate networks can be a form of moral support, feedback and an invaluable network for recommendations on business, staff, markets etc., from your peers and industry experts. Twitter is fun and if used effectively, can build a “culture” for your business, but like Facebook, you must ensure it is used with great discretion and never post anything inappropriate or defamatory. Richard Branson’s Twitter is a successful example, always upbeat and the message he has developed on Twitter is a happy, successful, interesting company that also contributes to society and the less fortunate. Patrick Berry, Marketing Manager of 4one4 Real Estate in Hobart recently created a new iPhone application called “Agent Calculator”. Aside from being a brilliant and relevant app for every real estate and sales agent, I was curious as to how Patrick promoted his invention. Patrick informed me that he has not spent ONE cent on marketing the application and currently has a rate of approximately 50 downloads per day. Before online social networking, this wouldn’t have

To change reactionary marketing behavior to consistent and successful marketing strategies, I recommend a 12-month plan with flexibility to alter elements based on market shifts, interest rates etc., but the strategy can be built and the details can change. For the proactive agent, there are brilliant front of business options such as digital display windows, where return on income is measurable and can be offset successfully by paid advertising from both vendors and complementary local services. Tristan Lovell from Splash Displays indicated many of their clients partially or fully set off the costs of their Touchscreens via paid advertising or reassessing their newspaper spend, the result, an engaging front window that can accept inquiry 24/7 while showcasing a very stylish office look.

Five key elements to a successful marketing plan for your business: 1. Houseclean and maintain your database 2. Plan six to 12 months ahead with standards such as newspaper, drops, e-newsletters etc., and know or negotiate the costs. 3. Get smart with your spending, audit ALL areas of marketing spend and write down your spend. 4. Think how you can redistribute this spend more smartly and with a better Return on Investment. Track your expenditure and work with complementary services in your area to offset costs. 5. Stick with what you do best to run a successful business and pay industry specialists to improve areas that you are not confident in, i.e., website or newsletter.

And then there is video, immediately visual and engaging – you will find most of the awardwinning offices have grasped this medium because of its cut through ability. A video showcases both a property and the agent and it’s affordable, additionally it increases your website’s optimization. I predict in years to come, vendors will expect video as part of a standard advertising campaign. You don’t have to spend more in your business to overcome marketing flaws, just spend smarter.

Dee Houlihan is the Company Director of Deeva Marketing, a boutique agency that predominantly services the real estate and associated industries. Her 15 years of marketing real estate nationally gives her company great insight into the future of real estate marketing. For further information contact: dhoulihan@deevamarketing.com

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How to improve the profitability of Real Estate firms?

Build your pipeline of property, increase your agents’ success and achieve sales excellence…

Today’s competitive market has urged many real estate companies to take a closer look at how they run their businesses. As a result, many leading firms are evaluating and adopting ideas, practices, and processes from other industries to help them run their companies more effectively. Across industries, managing the performance of the sales force or in the case of real estate, sales agents, is a major challenge. In real estate industry, most owners have no visibility into the sales pipeline, no infrastructure to manage agent productivity, and don’t “own” a centralised customer database. The result creates a massive struggle for owners to control their business and have a clue of what is really happening. What are today’s 4 biggest challenges for real estate owners: 1. How to get better visibility into your sales agent activity? 2. How to centralise your customer database? 3. How to gain deeper insights into business operations? 4. How to measure your sales agents’ sales funnel? To meet those challenges, agencies are turning to CRM (Customer Relationship Management)/SFA (Sales Force Automation) solutions. CRM/SFA helps real estate firms to improve profitability, build longterm relationships with customers and enhances the recruiting and retention of productive agents. CRM plays a major role to transform businesses, from no visibility to macro-management; CRM boosts your agents’ motivation (by measuring and creating fair incentives package) and increase your revenue by underlining the gaps and therefore fixing them with no downtime.

Decrease repetitive tasks CRM Workflow Automation takes over. LeadMaster APAC The Australian Real Estate Review

Sales agents’ management represents one part of your main focus; CRM supports all your “behind the scenes” strategies. It’s no secret that consumers are heavily relying on the web when purchasing or renting a home. Technology has become an essential part in the consumer’s real estate experience. Information on the web is limitless and customers’ interactions are heavily driven by your web-interface. Applying this concept and leveraging your agents with technology, improves your agents’ sales. That is, the decision making process (closing) can be better managed, leading to shorten sales cycles and higher conversion rates. To reinforce your agents’ productivity, owners of real estate firms must move forward from old procedures and use the full power of CRM/SFA to drive their margins and productivity. Owners have the ability to replace many repetitive manual processes via Sales Force Automation to automate internal and external processes. This can improve real estate firms’ profitability – additional features can be used like Workflow Automation, Marketing Automation, eDM that can lead to converting and closing more business, which drive success for both the firms and the agents.

“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful” Jeff Bezos - Amazon The benefits of CRM/SFA for real estate firms are: • Provide visibility of sales agents’ activities • Analyse “lost opportunity” vs. pipeline • Provide deeper insights into key business operations • Centralise data • Support the sales agents • Help the recruitment process; identify good team players and low performers • Enable better “incentive packages” • Help agents to understand their pipeline and increase their efforts

• Streamline daily tasks, better managing time • Capture your customers‘ information/prospects on-the-fly • Build a long and lasting relationship with partners, buyers, renters The true value of CRM/SFA is clear once real estate firms start using it and engage their sales agents, encourage their efforts to utilise it every day. Real estate firms are encouraged to move to CRM/SFA solutions to achieve highest growth and develop their agents’ skills. Researching this article and discussing issues with the real estate industry revealed that many firms are struggling as they don’t own appropriate foundations to move ahead with their plans. Inefficient and ineffective solutions greatly hold firms back. Implementing an online CRM to broaden your opportunities. The Return on Investment for implementing these solutions can be surprisingly fast. For a team of 10 agents, principals, administrations etc…the ROI can be achieved with just an extra sale per annum. Aurelie Cornu is the Marketing and Partner Channel Manager for LeadMaster CRM in Asia-Pacific. Visit www.leadmaster.com.au To talk to a Real-Estate CRM expert, call +61 1300 852 599 or email CRMTeam@leadmaster.com.au

“Build your pipeline of property, increase your agents’ success and achieve sales’ excellence…”

www.leadmaster.com.au Phone: +61 1300 852 599 | Email: CRMTeam@leadmaster.com.au

Crystal Display REAL SIGNAGE SOLUTIONS

Crystal Display delivers the most advanced end-to-end, personalised digital window display systems to the real estate industry. Their tailored systems will quickly establish you as a market leader in the neighbourhood, significantly boosting your profile. We spoke with Crystal Displays’ Ben Fisher to ask what makes their systems above-and-beyond clients’ expectations. what is Crystal Display’s point of difference compared to other digital signage companies? We focus on the personality of the agents rather than the technology. That’s something that we’ve really tried to focus on and something that makes us markedly different to other signage companies. For example, when I was in Perth recently, during the final leg of the client’s screen installation, although we had been working with the clients for about two months leading up to that – the core part element of the delivery is the time spent working closely with the agents. In three days I learnt about their people, the challenges that they face – as they were in a particularly competitive area, with an aggressive competitor nearby – I learnt a lot about the people, their personalities and got to learn about how hardworking and genuine they are. I felt that in all of their marketing, in everything they were doing, they weren’t selling themselves – which I think is something that they, like most other real estate agents, don’t really realise maybe because they were too close to it. Like most other agents they were presenting themselves with the standard A3/A4 window cards, flyers and so on, but they did nothing to show people passing by the genuinely nice people that they were. what challenges do real estate agents face in selling themselves? I think there are actually a couple of challenges of selling agents’ personalities. One of them is that for years the ‘stereotypical’ real estate agent, historically, is perceived as arrogant and untrustworthy. It’s a stigma that has historically put them on the same level as used-car, door-todoor and insurance salespeople. The modern-day real estate agent is in most cases the complete opposite. Our recent Perth clients for example are exactly that, they provide an honest and fair service but like most real estate agencies, that isn’t

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necessarily reflected in their marketing because it’s all focused on presenting their listings. From the window, you couldn’t see who they were as they had so much focus on selling their listings. That’s what Crystal Display is all about – understanding who the agents are and focus on selling them and let the agent sell the properties. why does Crystal Display represent a sound return for investment? What we do is more than just offer digital screens. In terms of a marketing and investment perspective, our partner service is more geared towards being an investment in the agency and the staff. We’re not really here to just install screens in the window. Our partner offering is a combination of displays and services, which is something that other companies don’t do. Part of that service is that we will actually keep following up with them and making sure the screens are not only working well, but also the content they’re publishing on the screens is new, fresh, up-to-date with a clear focus on selling the people and the agency. It’s one thing to install the screens so that clients can list their properties, but it’s another completely different thing again to continue to look after the client in a close, personalised way. We believe it’s more important to sell the agents because agencies are trying to get people to come in and build a rapport with them so they can feel comfortable enough to list their property with them. The agency window is the first step in that process. For example, the client I mentioned in Perth – within literally the next business day they had introductions to people they hadn’t previously met and within a week these led to new appraisals and at least one new listing. Apparently people were coming in and not commenting on the listings displayed on their new screens but they were consistently commenting about the other digital content that we created for them: the marketing, the design and selling of their agency. what marketing design and services does Crystal Design offer? We create a combination of billboard style marketing posters with messages relevant to their people and their local area. We tie that in with a range of other initiatives we can assist the client with such as their social media marketing. The focus is to try and break the ice with people walking past the agency and at the same time work on building a subconscious relationship with people who they haven’t met. In the case of the Perth clients, we dedicated one of the two screens to this. One screen

is dedicated to the digital marketing of the agency and agent profiles and the other screen is displaying listings. The digital marketing was all created whilst working with the client onsite over a period of about three days. As I said, the Perth client faced off a dominant force in their local area that often used questionable tactics to get listings. For our client, they were trying to find ways to educate the market that those questionable methods used by their competitors aren’t necessarily going to work out in the long run, often resulting in houses being listed on the market for months, if not years. Certainly from the feedback we’ve received, the most impact has resulted from the digital marketing side of things, not the presentation of their listings. what piece of mind can clients expect regarding warranties and services on Crystal Display screens? We’re the only company that offers their money back combined with a life-time guarantee which means any problem, any component, all service maintenance, training support is all included and if the client isn’t completely satisfied within a month, we’ll give them their money back. Our partners get looked after in many ways, not just with the installation itself, support, marketing etc., but with any potential future problems that may arise, it’s essentially a no questions asked product warranty, with the exception naturally in the case of theft, negligence or damage, etc. Can you summarise Crystal Display’s mission statement? We very much focus on the end customer rather than the one-off commercial result. One of the things that separate us from our competitors is that if you look at our business model in the way that we lease our product to our clients – our goal is to create an extremely reliable product, because we can’t afford to go out there replacing displays all the time. Whereas with our competitors, who are more focused on the transactional sales arrangement, their business model indicates that they’re focused on minimising expenses and cutting costs with the goal to maximise the profit on each sale. Often that can result in the product being less reliable or of lower quality. Our business model is all about using the highest quality components possible and rigorously testing them to make sure that when we install a product, we’re not going to be getting called back to come in and fix problems. Instead we’ll be going out there to work with them to make sure they’re getting the most out of the displays.

Brand health check:

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Lauren Mai: “Sometimes a brand is like an old overcoat”

Lauren Mai, Founding Director of LM Advertising, is concerned about the health of your brand. “A brand can be like an old overcoat, something we just wear automatically but never really think about. Yet that is the very first thing people see and judge us by.”

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Lauren believes that too many of us are guilty of benign neglect when it comes to our own brands. “A brand is more than just a collection of logo, colours and fonts. It is a ‘person’. When we think of the great brands, we can guess how they would behave in any given situation, because we know their personalities so well. How well does your audience know the ‘person’ that is your brand?” And Lauren practises what she preaches. LM Advertising conducts a brand audit with comprehensive research for her clients to establish precisely where a brand is positioned in market perception and more importantly, where it should be. “Like an old overcoat, old car or old pair of shoes, a brand can be much-loved by its owner, to the point where love is blind. Sometimes, the last person to recognise that some serious course-correction is overdue is the owner. We’re not talking aesthetics here — having a strong, clear and well-defined brand personality directly correlates not just with sales but with the long-term growth and prosperity of your business.” Lauren has the credentials to back up her words. Having worked in property marketing for a decade, she founded LM Advertising three years ago and has rapidly built a client list that is the envy of many. In the last 12 months alone, Lauren was involved in the advertising and marketing of over $500 million worth of property. “Even if you don’t consider branding important, even if you don’t think you have a brand — you actually do. And that oversight can speak volumes to your market. At LMA, we’re like a diagnostic clinic. We examine, diagnose and prescribe — and we’re happy to report that the brands we’re privileged to work with are all dangerously healthy!” You can see Lauren’s work for yourself at LM Advertising’s website, www.lma.com.au

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A REAL delight Imagine yourself lost in a misty valley, surrounded by vineyards and orchards and discovering the mysterious world of the ‘black diamond’. The Wine & Truffle Company is one of the few truffières in the world where you can not only enjoy the unique experience of a hunt with the truffle dogs through the oak and hazelnut groves, but also indulge in a truffle-inspired menu matched with award-winning wines. In Western Australia’s South - West, the Manjimup/Pemberton region grows some of Australia’s finest cool climate grapes, in particular merlot, sauvignon blanc, chardonnay and shiraz. The richness of the soil and the cool climate are also ideally suited to growing the black truffle, a delicacy traditionally harvested in the forests of France.

Say thank you to your valued clients with our superb gourmet gifts What better way to acknowledge the support of your clients than with our award-winning wines or unique gourmet truffle products from our farm in beautiful Manjimup, Western Australia. View and purchase the full range of wines and gourmet gifts on our website.

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We are pleased to offer you our Wine and Truffle Club members’ discount of 10% on all products and wines PLUS a further 10% by quoting REAL11 when you place your order. Free shipping on all orders over $100. Please register online, or call 08 9387 2276 for more information.

Established in 1997, The Wine & Truffle Co. is the largest producer of fresh truffles in the southern hemisphere. The property has over 13,000 hazel and oak trees and 30 acres of wine grapes. What better way to discover how these fertile soils have become home to one of the most sought-after, edible European delicacies, than to walk through the Truffière on a guided tour. Watch the dogs weave their way through the Oak and Hazelnut trees searching for that elusive black treasure, and then smell the truffle’s pungent aroma. Each winter, chefs from around the world wait in anticipation and are prepared to pay up to $3,000/kg for this much sought after “black gold”. Before bringing this unique experience to a close, linger a little longer. Sip on one of our premium fine wines overlooking the picturesque scenery, or let our master Chef tantalise you with a mouth-watering selection from the seasonal menu where almost everything offers some interpretation of the truffle. The fresh truffle season runs from late May through September. The Cellar Door offers wine tasting, and has a full range of The Wine & Truffle Co. products for you to purchase and share your experience, such as truffle oil, roasted hazelnuts, honey, mustard, and other products including merchandise. If you cannot make the journey to Manjimup, the Wine and Truffle Co. offers a selection of gourmet truffle products which are available all year round and can be ordered direct from the company. Naturally, The Wine & Truffle Company’s gourmet selections are made with hazelnuts and truffles harvested from their own farm together with other ingredients such as the oil, honey and salt which are made from local produce. The fine quality of The Wine & Truffle Company’s truffles and truffle products is demonstrated by their distribution around the globe to noted international chefs and food lovers everywhere. As you might expect, The Wine & Truffle Co. produces a wide range of wines, from every day easy drinking wines through to richly flavoured and elegant fine wines and Sparkling Pinot Noir NV Brut, The Truffle Hill Chardonnay 2009, recently awarded a gold medal at the 2011 Timber Towns Wine Show, is the perfect complement to the product gift line. What better way to reward your colleagues or clients than to present them with a gift of gourmet food or wine from The Wine & Truffle Co.

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To purchase, visit the website at www.wineandtruffle.com.au to register. Please quote REAL11 to receive your bonus discount, or phone 08 9387 2276 for further details.

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Passion for photography? Put yourself in the frame with Open2view

Open2view is focussed on finding franchisees who are motivated, passionate, enthusiastic, friendly, creative, and committed to success – just like everyone else in the Open2view community.

From humble beginnings in New Zealand more than 10 years ago, ‘Open2view’ has grown to become Australia and New Zealand’s leading real estate photographic and marketing business. The company’s Australian website Open2view. com.au receives more than 80,000 visitors each month who view the professional images and videos of residential and commercial properties for sale, which are supplied by the 175 photographic franchisees Australia-wide. Chris Bates, Open2view’s founder and managing director, believes the company’s success has been achieved by creating a business where franchisees can be intimately involved, and if properly supported, can achieve their own outstanding business success. “It’s simple: We succeed if our franchisees succeed,” Chris says.. “My philosophy is similar to Ricardo Semler, the manufacturing magnate of Brazil, who believes that providing the franchisee with the appropriate support, infrastructure and tools they will develop their business to the level that they would never be able to attain individually. “As a very close knit and extremely proud community, Open2view’s franchisees are passionate. Like any successful business there is a need for direction and structure, however unlike most businesses the value and respect of individual input and contribution is seen as paramount. Speak to any Open2view franchisee and you will find an enthusiastic, professional and dedicated community member wanting to ‘push the envelope’ to its limits. As a ‘cutting edge’ business we draw in the best of technology, marketing, creativity and business processes. “At the end of the day we are a service industry so we are looking for people who are self motivated, enthusiastic and have the ability to communicate effectively. Our people come from all walks of life but the majority have experience or some interest in photography, a creative flair and computer literate,” Chris says. Open2view’s branding has now become synonymous with quality of product and service and this is being supported with a major radio campaign with ‘Triple M’ in Melbourne to promote Open2view to the vendors who are the end user of their services.

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At ground level, franchisees develop close working relationships with local real estate agencies, but due to demand they also work for advertising companies and property developers and are known for providing arguably the largest, integrated range of photographic and marketing services available through a single point. Working from Open2view branded vehicles, carrying specialist photographic equipment, including a 20 metre extension pole, gives photographers the flexibility and freedom to get almost every picture and angle required by clients. Training is centred on architectural and real estate photography, but that’s not just taking a ‘snap’. Preparation, composition, post-production editing and customer relationship building are all part of the ‘toolkit’. “Talking of toolkits,” Chris said. “We provide interactive floorplans, walkthroughs with music and voice-overs our 3G mobile web service is fully operational using QR code technology and we have now started rolling out High Definition video services. “Most people in Open2view do it because they love it. For many it is a lifestyle choice. If you want to run you own successful business, love meeting people and want to be part of an exciting and rapidly growing industry, then we would love to meet you.” What Open2view’s clients say “Open2view’s ‘can do’ attitude has delivered amazing results for our business and I believe made a significant contribution to the success of our business.” Oakleigh Agency Principle “WOW – The walkthrough is amazing, THANK YOU so much... please pass on my thanks to Leanne for doing such a great job.” A Customer from Emerald, Victoria “Hey Guys… YOU ARE THE BEST!!!!!!!!!!!!!!!!!! THANK YOU!” Office Administrator N.R Reid & Co Mount Waverley

Prospective Open2view photographic franchisees should visit the website at www.open2view.com.au to get a feel for the quality of the work, then call Ken Greef on 0405 556 704 or email ken.geef@open2view.com.au

Open2view photography checklist Entertaining Areas / Yard

Help us present your home in the best possible way by following this simple checklist BEFORE the photographer arrives. General

• Clear off outdoor settings, remove pet bedding/bowls • Sweep decking/paving • Remove washing from clothesline • Pool (if installed) should be clean, cleaning equipment/hoses etc removed

• Remove all clutter and excess ornaments throughout house, store away • Ensure all globes in lights and lamps are working, and switched on Street Front and Garden • Mow lawns, trim trees and shrubs • Remove bins, garden tools, kids toys • Remove cars from driveway • Ensure exterior lighting (if installed) is working

“A clutter free, well presented home will always look more spacious and appealing to prospective buyers.”

Lounge and Living Spaces • Remove all unnecessary furniture and clutter: create an impression of space • Turn on lights and lamps • Clear coffee/side tables of remotes and magazines • Open curtain and blinds, remove kids toys Kitchen and Dining • Clear benches, window sills and sink • Remove dishes/drying racks, cleaning products and tea towels from sink • Remove fridge magnets, kids artwork and bins • Turn on overhead and range hood/cabinet lighting Bedrooms • Make bed and clear bedside tables/dressers • Turn on all lights and lamps, blinds open • Remove floor items • Clear area beneath bed Bathrooms • Clean shower screens, basins and mirrors, remove bath toys • Remove personal (shampoo etc) products and cleaning items from shower/bath • Remove bath mats, clothes hampers, scales and bins from room • Display coordinated clean towels, or remove entirely

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Commercial Real Estate

Australiaâ&#x20AC;&#x2122;s

commercial

k o o l t u o sector A look at the

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market commercial property

by Tony Crabb.

Commercial Real Estate

he words “interesting times” are one way to describe the outlook for Australia’s property markets as some western countries face significant economic hurdles which have impacted negatively on financial markets around the world. The positives are of course that economically Australia remains in a relatively sound position, and as an asset class property traditionally does well in uncertain economic times. At present we have a two-speed world economy with Australia doing well alongside China, India, and East Asia while countries in North America, Europe and the UK are doing as badly as they have ever done since the Great Depression. The turmoil in global financial markets and the concomitant volatility that poor economic growth and high levels of sovereign debt have caused can be expected to remain until at least the end of the year and possibly into 2012. This “two-speed” world has translated itself into a two-speed Australian economy where certain sectors of the economy, such as retail, face some headwinds, whilst others, especially mining, are enjoying a boom. The retail sector is facing headwinds from higher interest rates, higher food prices, higher energy prices, higher fuel prices, falling house prices, poor consumer sentiment and a propensity to save. As if all of this were not enough, the internet looms as a potential threat to non-descript goods retailing.

it may play out over the next three years but we can make the following points: • Immigration numbers have fallen substantially. According to the Bureau of Statistics net migration was 171,000 in 2010, a dramatic fall from the 316,000 figure recorded in 2008. At the same time Australia’s population growth fell from 467,300 in 2008 to 325,500 in 2010. This effective fall in the number of consumers has served to create significantly less demand for housing, goods and services, while keeping the labour force tight forcing wages up and inflation up. • H igher interest rates – rates increased four times in 2010 from 3.75 per cent to its current level at 4.75 per cent – energy, fuel and food prices are putting real strains on household budgets and severely limiting the capacity for discretionary spending. • The household savings rate has risen from zero to 10 per cent. The ratio was at or near zero for a decade between 1998 and 2008, but it has now returned to 10 per cent – a level it was at for most of the ‘80s and ‘90s. Perhaps retailers now need to make an adjustment to a return to normal spending levels from a decade-long level that was unsustainable.

The mining sector, on the other hand, is enjoying record prices for most of what can be dug out of the ground. Huge investment is predicted in the sector as machinery and infrastructure are improved in order to get larger quantities of the commodities out of the ground and out of the country to developing countries such as China and India.

• The strength of the Australian dollar has varying impacts throughout the economy. On the one hand tourism has suffered as domestic tourists choose relatively cheap overseas destinations. The number of short-term departures has risen from 400,000 a month to 700,000 a month in six years while international arrival numbers have remained stable. Manufacturers are also suffering under the weight of a higher currency, however cheaper imported goods such as clothes, electrical items, cars and petrol have also served to keep inflation lower than it otherwise would have been.

There is nothing simple about this current state of affairs nor is there anything simple in the way

• Borrowing costs for both individuals and corporations have returned to more normal

levels following the worst periods of the global credit crisis through 2008. More to the point, substantial balance sheet repair has been undertaken in both the corporate and private sector and sovereign debt levels are negligible. Corporations, governments and households are regarded as being able to withstand global financial shocks. • The domestic economic outlook is sound, driven by a strong mining sector and substantial business and government investment, however there are sectors of the economy which are quite weak, notably retail, tourism and housing. Both the strength and weakness are expected to persist. • GDP growth is expected to be at or around four per cent for both 2012 and 2013 but may be subject to some downward revision if global growth stumbles. With this background of a two-speed world and Australian economy, inflation is rising everywhere. The Reserve Bank of Australia has forecast the likelihood that underlying inflation will be at or above the top of their target band of three per cent in 2011. At its latest meeting, the RBA decided to leave the cash rate unchanged at 4.75 per cent. The decision was whether to raise the rate or leave it unchanged. It is worth noting the cash futures (not a reliable barometer) are forecasting a 120 basis point fall in interest rates by August 2012. Several prominent economists are actually forecasting a fall in interest rates in December this year.

The markets If we take a look at the commercial property market by sector Savills can see that office is probably in the driver’s seat while industrial is travelling as well as can be expected and retail is currently undergoing some upset as it negotiates the new world (internet) order.

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Commercial Real Estate

Office The office market is the most cyclical of the three major commercial property markets. Demand and supply move up and down causing some fluctuations in the pricing of real estate. This in turn creates risks and opportunities for investors. Whilst there are national influences on the office property market, most of the important influences are of a local nature. Investors are strongly advised to seek professional, local advice before making investment decisions. Nationally, the office market is now in recovery from the GFC. The Sydney CBD office market bore the brunt of the negative effects of the GFC with a great deal of downsizing in the finance sector. Brisbane was beset by new supply whilst Perth was hit by a slowdown in demand for commodities and the prospect of a tax on mining profits. Melbourne sailed through largely unaffected. The rebound after the GFC has seen Brisbane and Perth doing the lionâ&#x20AC;&#x2122;s share of the work. Mining is still the key to the take up of space in those cities while in Sydney the rebound has, at least in part, been due to merchant bankers setting up new businesses. Melbourne continues to enjoy robust levels of demand. So while demand is good, supply is now extremely weak and vacancy rates generally low. Due to the lack of supply we could see an undersupply in some markets which is expected to drive rental growth. Brisbane is still offering high incentives but given the current high demand the market should tighten quite quickly. At the current rate of take up of office space both Brisbane and Perth will again face severe shortages of office space leading to new construction and rental growth. Melbourne is already enjoying a level of new construction with four large buildings under construction and the prospect of more to come. Sydney is still working its way through the current amount of vacancy and significant supply of new space is expected to be a number of years away.

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One of the other factors making office investment attractive is the fact investment yields are still substantially higher than the 30-year average. Not only do office buildings currently contain little vacancy, supply of new space is tight, rents can rise and yields are attractive.

Industrial Industrial property can sometimes be viewed as the ugly duckling of the property market but returns are often very good. What makes industrial property attractive to investors is the simple nature of the property. Usually a warehouse or small factory, it is a simple structure of usually one level and often has just one tenant on a long lease. This simplicity is very attractive to investors looking for income without headaches. The fundamentals of industrial property, mostly surrounding the import and export of goods and local business services such as mechanics, factories and assemblies are very solid. Rents for industrial property have largely held together through the GFC and businesses occupying industrial property have also been mostly unaffected so vacancy hasnâ&#x20AC;&#x2122;t risen â&#x20AC;&#x201C; in fact quite the opposite. The GFC severely restricted the supply of new space and so any take up was in existing vacant space resulting in an extremely low vacancy rate. There are now tentative signs of development activity in Melbourne, Brisbane and Sydney, albeit constrained by the continuing credit squeeze. There are similarities here with the situation in the office market which contributes to a compelling investment scenario for industrial property. Investment yields softened during the GFC and have now stabilised at levels that represent fair value. These levels are higher than those

Commercial Real Estate

for office buildings and are very attractive to investors seeking income returns. Industrial property sales turnover suggests industrial property remains an attractive proposition at current yields with both private and foreign investor’s prominent buyers.

Retail It is now well established that we have a cautious consumer brought about by high interest rates, fuel, food and energy prices. Recent turmoil in financial markets will have done nothing to support consumer confidence but rather make them even more cautious. Nevertheless, there are a great many parts to retail and the purchasing of goods is only one small part. Recent retail turnover increases have been driven almost entirely by food, hospitality and services with little or no growth in turnover in other retail categories. Food, hospitality and services cannot be purchased over the internet and remain our favoured retail sub-categories. Consumers are now saving at the same rate as they were in the ‘70s, ‘80s, and ‘90s – a savings rate we have not seen for a decade – and so retailers are now having to deal with the shock of the consumer returning to normal after a decade of spending more than they earned. Finally immigration levels have been severely curtailed from the levels of two years ago which has had a negative impact on the economy generally but a more significant impact on the retail sector, nevertheless retail property remains high on investor wish lists and it is likely to remain so into the future.

easily be done on the internet – at least not yet. This makes supermarkets a very attractive investment – usually with a long lease (up to 30 years) to a well known national brand. Another aspect of retail is the importance of its location. Well known shopping strips and locations cannot be added to, nor can they be replicated easily nearby. This scarcity and desirability continues to keep investors and tenants happy. Again, these are very simple investments – a shop, a supermarket – and require less specialist knowledge than buying a shopping centre. Whilst rental growth in retail properties may be somewhat subdued over the next couple of years the supply side is, like industrial and office, constrained. As the population grows and the consumer regains lost confidence there will be a thaw and the prospects for retail will brighten dramatically. Whilst it may be early in the cycle, now is as good a time as we have seen over the past five years to pick up well located, well tenanted, retail property. Investment yields are firm because of the scarcity of the property and are likely to remain firm into the foreseeable future. In conclusion, if pressed, Savills may rank the three major commercial property sectors in order of office, industrial, and retail, but there is always a caveat: there are aspects of all three markets which can be attractive and unattractive to investors and of course there is no substitute for professional advice.

Tony Crabb National Head of Research, Savills Australia Tony’s breadth of experience and finance background gives Savills a leading edge in driving the strategic direction for the Savills Research team in Australia. Pioneering market insights and reporting unique to Savills, Tony also leads the team in servicing the needs of Savills client’s in commissioned reports specific to their needs. Key Attributes • Client Portfolio and Strategic Advice • Identification of current and future trends • Database design, implementation and maintenance • Client liaison Qualifications • Bachelor of Arts • Diploma of Financial Services • Securities Institute of Australia • Faculty of Australian Writers • Rogan Graduate

What makes retail attractive to investors is the defensive nature of the asset. People have to buy food for the most part and this cannot

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A passion for the property game When marketer Manny Loupas had the idea back in 2001 to start up a marketing agency that would specialise in offering property developers a complete wire-to-wire service, colleagues and friends thought he was ‘a few cards short of a full deck’.

Enter Adrian Bold. A budding businessman and ‘Young Australian Entrepreneur Of The Year’ recipient, Adrian had gone straight out of university into his own up-start 3D visualisation Company - Bold Impressions. The two met on a job 10 years ago and agreed that the idea of a marketing agency dedicated to the property industry had a lot of merit. It wasn’t until 2006 with a string of collaborations under their belts that talk turned to action and Riser And Gain was born. “Both Adrian and I share a passion for property development that goes beyond sexy images and brochures,” Loupas explains. “Adrian has a keen interest in the design of buildings and architecture, whilst I find reward in the challenges associated with transactions involving high-profit, low turnover commodities. I think this is part of the appeal to our clients.”

Adrian Bold (Left) with Manny Loupas. Terminus Business Park in Mackay.

Collectively, the two have worked with some of Australia’s biggest developers including Stockland, vicUrban, Meriton, John Holland and GHD. “Whether we’re working with ‘Blue Chip’ companies or smaller developers, the rewards are equally satisfying,” Bold says. Loupas’ background reflects the diversity of the projects he now markets. He has worked with investors, financiers, builders and developers. Loupas has marketed house and land packages, large greenfield residential estates and apartment projects, industrial and commercial developments, and sold land options to investors. “My interest in property began when I was in my early 20s selling timeshare. I learned quickly that property (especially land) is the most valuable asset most people will aspire to own. I find that very empowering in my chosen profession.” “The property market is not without its challenges. A combination of price corrections, global financial uncertainty and federal government shenanigans has created an air of confusion and insecurity in the market place that we’ve not seen before.” “To add to the pressures of a market slow down, many developers are now being asked to achieve a relatively high rate of pre-sales in order to satisfy their financial stakeholders and get the project off the ground. To further rub salt into the wound, buyers are looking to draw blood expecting to get a bargain with every deal.”

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Loupas says that despite these challenges, buyers are less likely to argue on price if the perceived value is high. “If the marketing is done right, the cost benefits should flow-on to the product because there is less likely to be price corrosion or a perception that the product value is ‘negotiable’. “Part of what we do is to develop surrogates for tangibility. If we can convey a sense of highquality and credibility, the value proposition takes care of itself.” “If I were to buy a bag of rice I’d often look for the best deal on price,” Bold says. “If I can’t tell the difference between one property development and another, I’m likely to use the same buying criteria – particularly if I’m an investor who may be primarily focused on the obvious ROI indicators”. Loupas says that some sales agents have yet to come to grips with the fact that buyers have become better educated and are self-selling. They want to be able to have access to all the information they will need on their terms and in their own time. “I shudder to think how many sales are being lost due to the lack of detailed information available to potential buyers. This is especially critical for developers who will often spend months or even years preparing a project for market only to be let down by inadequate marketing communications.” “We’ve been in the game long enough to know what works. What’s more, we can structure a solution that doesn’t necessarily require the full marketing spend up-front. We can essentially stage the marketing activity starting with the EOI campaign. “I think sometimes people are surprised to find that we’re not really a transactional business. Our interest in a project doesn’t stop when the marketing material has been rolled out and the campaign comes to an end. The reward comes when the client reports complete sell-out and calls us in to discuss the next project – that’s when we know our job’s done.”

• • • • • • •

Conveyancing Matters

SOME THINGS YOu NEED TO KNOW WHEN ACQuIRING A COMMERCIAL ENTERPRISE

uying commercial premises for your own use or investment requires other considerations which one may not have contended with when buying residential property. In this article, I will attempt to deal with some of those issues and elaborate further on topics touched on in my previous article. Generally a person will not acquire a commercial premise unless it is for associated with a business arrangement. You will either own a business and wish to operate your business from the premises or you will acquire a property that already has a business operating from the premises. When considering a purchase of this nature, you will usually do so with an Accountant or Financial Adviser in toe together with your legal adviser. The first issue to be dealt with is whether the location of the premises is viable to the business operation. If the business operation is prohibited by planning controls, the business arrangement cannot continue or you will need to arrange to have the permitted use for the premises changed to suit the use. Consideration will need to be given as to the purchasing entity. Your Accountant and Financial Adviser will be able to advise you on the appropriate title ownership. Once this has been sorted, your legal adviser, in conjunction with your Accountant and Financial Adviser, may be required to formalise the purchasing entity if you are to acquire the property in the name of a corporation or Trust entity not currently in place.

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When acquiring a commercial premise, the purchase supply will attract GST if the vendor is registered or required to be registered for GST. Supplies in respect of the business arrangement attaching to the acquisition and future leasing arrangement (if any) will also be the subject of GST. Therefore, depending on the circumstances of the purchaser you may need to apply for an ABN and register for GST. The Title to your commercial premises is also an important factor. You need to know where your Title starts and finishes and whether this is adequate for your future intentions. If a copy of the Title and plan of the land has not been provided to you before entering into the contract, you may need to arrange for your legal representative to arrange a search of the Title and obtain a plan of the land before proceeding to contract. Note a personâ&#x20AC;&#x2122;s title may be limited to height and space within floor, ceiling and walls. Once planning, zoning, tax and other issues are in order, you are free to negotiate a purchase. Your Advisers will need to be involved in the drafting of the conditions for the purchase of the property and deal with issues appropriate to the acquisition. Some details that should be addressed in the contract are:1. The purchase price â&#x20AC;&#x201C; Is it to be Exclusive or Inclusive of GST? 2. Whether the Margin Scheme should apply. Both vendor and Purchaser need to know the

GST status of each other to set out a suitable condition in the contract? 3. Whether the property is to be acquired with the vendor giving up vacant possession on settlement or will the purchaser be acquiring the property subject to receipt of rents and profits? 4. Whether the supply is a going concern? 5. What Lease is in place covering the tenant? If there is, your legal adviser will need to see a copy of the Lease and any renewals or transfers of the Lease as well as a copy of any Disclosure Statement which may have been required if the lease relates to a retail premises. 6. Whether the Tenant is up to date with all rental and outgoings due under the Lease and what happens at settlement if there are arrears? The vendor will want to retain any rights to collect any arrears despite any severance due to the disposition of the property. 7. Who owns the fixtures attached to the premises? Do they form part of the premises or are they Tenants Fixtures? 8. Financing arrangements. If you need to obtain a loan and this is the only security available to be provided, will the bank lend you adequate funding. Commercial Financing arrangements are different to residential lending. If all of the above matters are dealt with fairly as part of the Contract arrangement you would be free to sign a contract knowing that you have

Conveyancing Matters

addressed a substantial array of fundamental issues for your investment. When acquiring a commercial premise stamp duty is payable on the GST inclusive price, so if the written down price is exclusive of GST you will need to add the GST component before calculating stamp duty. I have noted in an earlier column that in most Australian jurisdictions, Registrars of Titles will not record in the Register notice of any trust ownership however, the trust may be noted by another document tying its ownership to the property. Usually that document is the Contract of Sale. Therefore it is important that if your advice requires that the property be acquired by your Trust, you need to show the name/s of the Trustee on the Contract together with the Trust as the acquiring purchaser. If your selfmanaged super fund (SMSF) intends acquiring the property and borrowings are resorted to for the SMSF, an asset must be held on trust for the SMSF so that the SMSF acquires the beneficial interest in the asset. That is, the SMSF will not be permitted to directly hold the legal ownership of the asset until it has paid off the loan. Therefore special assistance is required when this occurs so that the proper structure is put in place. In your preparation for the acquisition, you will have dealt with any legal documents necessary to formalise the trust and the agreement necessary to acquire the property. This will be important so that you pay the correct amount of tax and duties.

It is a requirement for commercial premises that compulsory assessment and disclosure of energy efficiency ratings are disclosed before the sale (or leasing) of a property to encourage reductions in energy use and greenhouse gas production. Therefore if you are acquiring an office space of 2,000 square metres, from the 1st November 2011, you will be required to be given a full Building Energy Efficiency Certificate (BEEC). BEECs are valid for 12 months, must be publicly accessible on the online Building Energy Efficiency Register, and include: • A National Australian Built Environment Rating System (NABERS) Energy star rating for the building; • An assessment of tenancy lighting in the area of the building that is being sold or leased; and, • General energy eﬃciency guidance. If acquiring a commercial premise and there is common property over which you have rights, it is important to make inquiries of the owners’ corporation. Depending on where the property is located, these owners corporations may be otherwise known as strata title developments or bodies corporates. In some Australian jurisdictions there is compulsory disclosure of specific information to be given by a vendor to a purchaser before entering into a contract. However, depending on whether any information required to be given, vendor disclosure may not be sufficient for you to adequately assess if the

Pauline Barrow is National President of the Australian Institute of Conveyancers. After completing a Business Course in the 1970s, Pauline began her professional career in legal services, firstly working in legal firms and later specialising in conveyancing which resulted in the opening of her own conveyancing firm, Professional Conveyancing Services, in Glen Waverley victoria in 1986. Pauline is also a fellow of the Australian Institute of Conveyancrs and the Institute of Legal Executives (vic).

price you wish to pay is fair and reasonable. For example, there may be planned works by the owners’ corporation within the development that you will need to contribute to however such cost may not place any value on the property immediately. You might have plans for your rooftop however is there any rules or by-laws agreed to by the owners’ corporation. Then again, do you own the walls and roof or the air space above your roof or the ground below and the rights to them? It is therefore important that you or someone on your behalf arrange to look over the register and books of the owners’ corporation in years past to fully understand what you may be in for when purchasing your investment. The best advice is the advice you receive before it is too late and that is BEFORE you sign a contract.

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The age of the small business CLOUD COMPUTING

Joel Leslie is the National Information & Communication Technology Manager of the Property Membership association, the Australian Property Institute (API). Joel previously was the Head of Technology of the real estate franchise group Raine & Horne. In this paper, Joel addresses the new technology of cloud computing and its effect on small to medium businesses – specifically the real estate office. When revenue in business declines due to poor performing sales growth, businesses tend to look at ways to either cut liabilities and/or improve operations. Most organisations in this scenario make great attempts to become as lean as possible, eliminating the cost of redundant services that aren’t really required anymore. Cloud computing is changing the way businesses operate. Although the technology is not all that new, it is now at a point where it can be easily delivered to new or existing businesses. And those businesses not implementing cloud technology will soon find those new start-ups have the agility that older more traditional businesses do not. A real estate office can now almost completely operate in the internet (cloud). Although you can never beat a physical shop front on a busy street, the technology that has been running these offices has changed – considerably. We are now seeing a mash up of marketing, client management and business process systems which are converging into a single integrated system all residing in the cloud. Previously, a business would have been required to employ a technical services company to assist with their local technology needs such as email, documents and files, security and the delivery of services such as a CRM (Client Relationship Management) software and listings management software. CRMs in the early part of the internet were for large multinational firms, or those organisations that could afford to enlist the technology required to host and run the solutions. Essentially, these systems were quite expensive and not all that

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smart. They stored information on current and prospective clients, as well as their relative contact details such as physical and postal addresses. Largely, that was about it. As the internet grew and the speed and reliability increased so did the services the internet could deliver. Services such as real estate websites and CRM solutions, and as technology progressed, the services became more and more accessible. Smaller firms started to employ CRMs. Internet-delivered technology solutions and are providing smart business with the ability to not only employ business solutions such as intelligent CRMs, they are providing the capacity to run the business’ complete business system, entirely through the internet. A small real estate office or sales agent might decide that the best solution is a solution that will aid mobility, due to the user always being out of the office. Therefore, the best situation is with a mobile cloud scenario, using the internet to host important files, run Microsoft Word or Google Docs, and run presentations for prospective buyers. A small to medium sized business might decide the best answer is a secure and low risk solution. In this scenario, the business might choose to host and run the organisations office files from the cloud, more like a repository of information and a secure pathway between the businesses physical address and the cloud storage solution secured with a VPN (Virtual Private Network). Both of the above two examples are quite possible and plausible. Both aim to maximise the technology they employ and at the same time, reduce the cost of technology employed by the business. As the Information & Communication Technology Manger of the Australian Property Institute (API), I have spent the past 12 months implementing a cloud computing technology solution nationally. My team and I developed a plan to deliver the API’s technology in an attempt to not only deliver technology, but to increase system and data redundancy, increase disaster recovery, reduce capital cost of technology, and provide a solution that was easy to manage and maintain – yet scalable.

Twelve months on and the API is now running efficiently, productively and its technology is largely cloud based. All though there are more system integrations to go, most of the large systems and services are reliant on cloud. It’s not difficult to see how the growth in the internet has moved forward and is assisting business around the globe. The API is now positioned to focus on its 9,000 members (property professionals) and less effort is required to waste about on technology and business process. Find out how the API can help you in your career, visit www.api.org.au

are you certified in property?

Property Certifications

Julianne De Groot API CPD Manager

An API certification helps you maximise your property career. The Australian Property Institute (API) represents more than 8,500 of Australia’s best property professionals. API members include residential, commercial and plant & machinery valuers, property advisers, property analysts, fund managers, property lawyers, property researchers and academics. For further information on obtaining a Property Certification or joining Australia’s premier Property Association, visit the API’s website for more details, API.ORG.AU. Get certified www.api.org.au/certifications

Luxury Retreats

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Luxury Retreats

Going anywhere

nice for

your Planning a holiday can be almost as stressful as working. Weâ&#x20AC;&#x2122;ve found the best retreats around which will help you forget all about work. Some will also help recharge your batteries, teach you to cook, snorkel and most importantly, how to truly relax. Charmaine Yabsley reports.

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Luxury Retreats

Katathani Phuket Beach Resort.

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Luxury Retreats

Saffire Freycinet

Longitude 131

Tasmania

Uluru, Northern Territory Noosa, Sunshine Coast

Who it would be good for: Whether you’re part of a couple, or the entire family is coming along you’ll all love the luxury and the seclusion (there’s just 20 suites).

Who it would be good for: Pampering in a fivestar ‘campsite’ amongst the shadow of Uluru.

What to expect: Leave your worries on the doorstep and indulge your body and mind. Whether you’re succumbing to a hazards restoration spa treatment, or enjoying a glass of wine while admiring the breathtaking views, your ‘real’ world will feel like another life. Don’t miss out on: You can’t miss a visit to the eponymous Vineyard. Follow it up by teaming your wines with Saffire Freycinet’s head chef Hugh Whitehouse’s degustation menu. Cost: Deluxe Suite, $1750 per night, inclusive of dinner and dinner drinks.

What to expect: These aren’t just any old tents. In fact, they look better than most hotel rooms. Either relax beside the pool or visit the many sites of interest – either way, end your day with a sunset of colours and cocktails. Don’t miss out on: A sunset helicopter ride, followed by dinner amongst the stars and desert. Count how many shooting stars you see before your first course is even served. Cost: $2,070 for two people and two nights in a private luxury tent. Includes all meals and transfers and admission to Uluru. How to find out more: Visit www.luxurylodgesofaustralia.com.au

Makepeace Island Who it would be good for: would-be entrepreneurs and die-hard romantics. This island is heart-shaped. What to expect: Owned by Sir Richard Branson, this retreat has all the excesses you’d expect, plus all the relaxation you need. Located a few minutes by boat away from Noosa’s restaurants and boutiques, you’re otherwise castaway on an island exclusively for you and up to 22 guests. Don’t miss out on: Book a boat charter and go fishing for a flattie. Or fly, by private charter, to the Great Barrier Reef – just a hop, skip and a jump away. Cost: $7900 per night for 8 guests. How to find out more: Visit makepeaceisland.com

How to find out more: Visit www.saffire-freycinet.com.au.

Balé Peppers Retreat Pine Tree Lodge Lord Howe Island Who it would be good for: A second honeymoon or a complete indulgence and relaxation. What to expect: Hand over your holiday to the experts. These guys are skilled in helping guests decide what to do, with as little effort as possible. Whether it’s snorkelling, fishing, diving, surfing and walking, it’s only 20 minutes away, and they’ll organize it all for you. Bliss. Don’t miss out on: Even the laziest of holiday maker must make a detour to Neds Beach for a swim, snorkel and to feed the 20kg ‘greenback’ kingfish in knee deep water. For adventurers, there are bushwalks and more strenuous hikes, including Mt Gower, rated as one of the world’s best day walks – a challenging 875 metre climb. End a perfect day with a drink in the ‘Boatshed’, overlooking the lagoon. Cost: Package rates start from $1270 per person twin or sole use How to find out more: Visit www.pinetrees.com.au

Kingscliff Who it would be good for: If you’re taking along your family, yet you don’t want a run-ofthe-mill self-catering resort, then this could be an ideal compromise. What to expect: The penthouse, at Bale Peppers Retreat, Kingscliff is just 20 minutes from the Gold Coast’s Coolangatta Airport and situated right on the untouched, pristine and virtually deserted beach of northern NSW. There’s an in-house concierge to help you organise outings, babysitting and childminding (and let’s face it, that’s a real holiday right there), conference facilities (if the office really can’t survive without you) a Golden Door spa, heated pool and jacuzzi. And don’t forget the million-dollar view. Don’t miss out on: Book a bespoke dinner prepared and served in your penthouse suite with Season’s chef Executive Chef Reuben Radonich. Ask for the pork belly – a Radonich special. Cost: From $675 per night. How to find out more: Visit www.peppers.com. au or www.peppersbalesalt.com.au. Based around Australia, you’ll be able to find something that suits everybody.

Palazzo Versace Hotel Gold Coast Who it would be good for: Those with expensive taste and sunseekers. What to expect: Lots of bling. Channel your inner Donatella Versace, because the moment you step through the doors of the Versace Hotel, your holiday becomes all about style. Overlooking the beautiful marina on the Gold Coast, you can watch the yacht’s dock, whilst sipping your champagne beside the pool. Don’t miss out on: You’ve got to exercise to fit into those classy Versace threads. Luckily, a new $50,000 health and wellbeing studio has just opened at the hotel. Who knows, you may find yourself working up a sweat next to Beyonce. Cost: Costs vary. Check the website for specials and offers. How to find out more: Visit www.palazzoversace.com.au

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Luxury Retreats

Colebrook Lodge

The Jungle Lodge

SOUTH AUSTRALIA

BLUE MOUNTAINS

Who it would be good for: Wilderness types and fans of Bear Grylls.

Who it would be good for: Finding accommodation for a group of friends can be a nightmare. The Jungle Lodge sleeps up to 10 people and it’s set amongst the beautiful Blue Mountains Botanic Gardens.

What to expect: Just because you’re able to catch your own dinner doesn’t mean you’re roughing it. Colebrook Lodge is a luxurious three-story ‘cabin’ – complete with bar, sauna hot tub – sleeping up to ten in the four generously appointed bedrooms (grab the room with the claw foot bath). Don’t miss out on: If you’re feeling too lazy to cook or venture out, ask for gourmet meals to be delivered to you. Cost: $385 for two people. Minimum two night stay. Tariff includes breakfast. How to find out more: visit www.colebrook.com.au

Sal Salis NINGALOO RANGE, WESTERN AUSTRALIA Who it would be good for: If you really want to get away from it all, then you can’t get much further than this breathtaking, and hidden, part of Australia. Ningaloo Sal Salis, is just nine tents amongst what has just been named a World Heritage Area, really is in the middle of nowhere. Even though you’re an hour’s drive (70 kms) from Exmouth, in the Cape Range National Park, luxuries, both natural and man-made are available. Be warned: there’s no Tv, mobile phone coverage or internet – a true detox from 21st century living. What to expect: Yes it’s camping, but it’s camping in a national range, smack bang on one of the longest coastal fringing reefs in the world; sleeping on 500 thread count sheets, and showering in your own ensuite. Wake up to the sight of a friendly kangaroo or a whale swimming along the ‘humpback highway’, before tucking into the sumptuous breakfasts, served on your deck. Don’t miss out on: Book a swim with the Whale Sharks for some spectacular holiday snapshots.

What to expect: Private self contained accommodation for up to 10 people with after hour’s access to the Blue Mountains Botanic Garden, Mount Tomah. Either sit back and relax while admiring the view, or take a trek through the rainforest. Don’t miss out on: Take a walk around the beautiful gardens – you might get some inspiration for that night’s cooking. Cost: Staring from $175 per night mid week or $350 per night for a two night weekend stay for up to 10 people. How to find out more: visit http://www. mounttomahbotanicgarden.com.au/the-jungle/ the-jungle-lodge/ or phone the Blue Mountains Botanic Garden, Mount Tomah on (02) 4567 3000.

Lake House LAKE DAYLESFORD, vICTORIA Who it would be good for: Foodies looking for indulgence and complete seclusion. The Lake House is the winner of numerous awards, including the Best Boutique Hotel and Gourmet Traveller’s Best Country Winelist and Australia’s Best Hotel Dining. What to expect: Any foodie worth their sea salt will be familiar with the tantalising offers available throughout Daylesford: whether you’re after a gastro pub, cosy café, or degustation menu at the Lake House you’d better pack your trainers to walk off those kjs each day. Don’t miss out on: A soak in the hot mineral springs – your cares will float away within seconds.

Cost: $730 per person in a twin room.

Cost: From $550 to $2,744 for the sumptuous Retreat (including dinner).

How to find out more: www.salsalis.com.au.

How to find out more: www.lakehouse.com.au

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Katathani Phuket Beach Resort THAILAND Who it would be good for: Resting along 850 metres of white sandy beach in the secluded cove of Kata Noi, the resort’s idyllic setting is suitable for couples or families wanting a peaceful holiday away from the busier resort towns in Phuket. What to expect: Once you arrive, there’s no need to leave. Armed with six restaurants, six bars, five pools, three Jacuzzis, traditional Thai massage in the garden and a host of leisure activities, including a kid’s club, the Katathani has is all. Leave your worries on the doorstep and indulge your body and mind. Or if doing nothing takes your fancy, grab a deck chair and admire the breathtaking ocean views while drinking a fruity cocktail. Don’t miss out on: Soothe your body and spirit in the resort’s luscious green setting at the Tew Son Spa. It features nine treatment rooms and private facilities with a full menu of services including massage, facial and body treatments. The free Thai cooking classes offered are also a fun way to spend quality time with the family. Cost: Royal Thai Suite starts from $400 per night, inclusive of buffet breakfast. How to find out more: visit www.katathani.com

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Wines

and pork buns MIXING THE BOLD WITH THE FASCINATING ALONG WITH A DOSE OF TRADITION

notice a lot of things at work. I notice trends, fads, traditions and very occasionally and very pleasingly the totally unexpected. Especially when you work in the wine business.

South Australia’s Clare valley. Tasting his brand new 2011 riesling and hearing his views on winemaking, left with the definite impression that tradition is here for a very special reason. Because it works.

You can peer back into the distant past and get an idea about what used to be fashionable, you get to see what people really like and importantly dislike. And in a funny way, you can also get a glimpse of the future as well.

Crisply dry, zesty, plenty of fresh lime juice with a hint of blossom on the nose. Refined and mouth-watering. Long and lasting. Really, this is a definitive description of what you should expect from a Clare riesling. Extremely enjoyable and extremely traditional.

Especially when you work in a wine auction house. A gentleman turns up with a couple of boxes of wine he needs to sell, as he is off to an Arab country, where I daresay alcohol in any form is a no, no. Sifting through the collection, I caught a glimpse of a glorious past. The bottle was very old. Thick set glass, antique green, lead capsule. The contents were clear with a definite red hue. The level high. And the vintage was a great one. It was French, with some pundits declaring that it still worth drinking today. The wine: Chateau Latour 1924. A wine as fashionable then as it is highly desirable today. Conversely I also get to see how people’s tastes change consigned as what were once fashionable, are now forcibly removed from the cellar. Old favourites such as well aged, fat and buttery chardonnays. Green, weedy and insipid Coonawarra cabernet blends from the late 1980s. Overripe, over oaked, over alcoholised Barossa shiraz. Old French white Burgundies that promised a lifetime of ageing that have sadly fallen over way too quickly. Along with lots of weird varieties grown in very hot conditions. And increasingly, truckloads of New Zealand sauvignon blancs. But every once in a while I do see something new, something different and something with a future. And this something is a tale of three rieslings. You know, that crisply dry, aromatic white so beloved of the smart luncheon set. It is also a tale of three young winemakers, each trying to make their own unique mark in an increasingly crowded market place. And succeeding. The first riesling as with its winemaker, is steadfast in its homage to tradition. Meet Dave Palmer, second generation winemaker at Skillogalee in

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The wine: Skillogalee Single Viney ard Clare Valley Riesling 2011 (screw cap) approx. $25 Then a beaming and effusive young lass presented her 2011 Eden valley riesling. What a knock out. Highly intensive, steely acidity and that classic Eden valley minerality. And a full spectrum of citrus and stone fruit flavours that that will keep you guessing for hours. But this wine also had another quality that I just couldn’t put my finger on until I met the winemaker, Elena Golakova-Brooks. Her background is Bulgarian, her knowledge of classic European rieslings intense and she is married to that extraordinary wine character, Mr Zar Brooks. Enough said.

The wine: Dandelion Wonderland Of The Eden Valley Riesling 2011 (screw cap) approx. $28 And finally, a winemaker who just wants to keep things as simple and as natural as possible. He uses wild yeasts, no electric pumps, does not fine, no added acid and as he says his wines are made as natural as possible. His 2010 Eden valley riesling is in a word breathtaking. I’ve never seen a riesling with such body and soul. All the usual descriptors for Eden valley rielsing are there: lime, blossom, minerals, steely acidity. But there is body to wine, a waxiness that is so different and so very pleasing. His name is Tom Shobbrook.

The wine: Shobbrook Eden Valley Riesling (screw cap) approx. $32 Oh, and the pork buns. I met these three winemakers over a few pork buns at the iconic Adelaide Chinese restaurant, T-Chow.

Graham Wright is a director of both Oddbins Wine Auctions and The Odd Whisky Coy. visit www.oddbins.com.au

EMAIL ALL ENTRIES TO: rlambert@aprs.com.au by the close of business,

Thursday 15th of December and you could be the lucky winner of one of Australia’s premium Shiraz wine packages.

Also, to subscribe FREE OF CHARGE to The Australian Real Estate Review please send your details through to dtessari@aprs.com.au and don’t forget to tell your colleagues!

Legal Issues

previous what do you owe your

The Australian Real Estate Review

Legal Issues

e’ve heard the same story too many times. A principal of a real estate agency rings our office in a rage and says, “One of our ex-employees is stealing our clients and we are losing money. What can we do about it?” Real estate is a competitive game and it seems vendors and landlords are only too happy to play along in pitting agents against one another. However, as an employee of a real estate agency you may not be aware of what duties you owe to your boss. When you leave a place of employment to pursue the next stage of your real estate career you are generally entitled to continue to earn a living, but you are not entitled to do that to the detriment of your previous employer. There are three essential legal issues: restraint of trade, confidentiality and fiduciary duty. As noted above, any restraint of trade cannot prevent an employee from working. A “nonsolicitation” clause is in all good employment contracts. This means that, an employee is restrained from soliciting clients of their former employer. Most employment contracts also contain a “confidentiality” provision. This is the stronger of the two contract clauses. It restrains an employee from stealing information databases or taking any records. Finally, an employee can owe a fiduciary duty to their employer, that is the employee cannot do anything that will adversely affect the former employer. This doesn’t mean the employee cannot compete, but it does mean the employee cannot use the resources of the former employer to gain a competitive advantage. Previous cases in the Supreme and Federal Courts indicate that employees who are part of top management, such as a director or licensee in charge of a real estate agency, will be held to owe fiduciary duties to their employers. These duties relate to things like the requirement to act honestly, the requirement to not misuse confidential information or disclose confidential information to competitors or other persons outside the business. Nevertheless, even if you are not part of top management you could still be bound by a fiduciary duty to not cause your employer financial harm. If you act in a way that breaches that fiduciary duty, you could find yourself in front of a Judge who

“When you leave a place of employment to pursue the next stage of your real estate career you are generally entitled to continue to earn a living, but you are not entitled to do that to the detriment of your previous employer.” orders you to stop and/or pay compensation. This is often called an “account of profits”. In other words, if you have made a profit from your breach you could be asked to account to your previous employer for the amount of that profit. Without boring you with the details of legal arguments, let’s set out the major ground rules for both employees and employers:

If you are an employee:

It may not just be beneficial in the case of the naughty employee, but it will act as a deterrent to other employees. This industry is always criticised for its underhanded practices. The best place to start when trying to alter this perception is at home. If you have worked for somebody who has paid you, you shouldn’t steal what they have paid for. It should be remembered, the cases will usually go against the employee where business sensitive material is stolen.

1. Do not act dishonestly with your boss when it comes to sales, listings or managements. You will not look good in the eyes of a Court if you do. 2. Do not steal, unlawfully disclose or misuse for your own benefit confidential information belonging to your boss. This includes client databases and information.

If you are an employer: 1. Install measures to protect your client database. In other words, use whatever encryption or password protections are available to you and ensure that you have the system capabilities to track everything an employee does with their work computer. 2. Have an employment agreement that includes a firm restraint of trade and confidentiality clauses. The agreement should spell out that the agency owns all the data including data bases, diaries, pipe lines, open house lists, etc. 3. Have an effective exit procedure so that you can collect all material that is important to the agency business. 4. Take action against those who breach. If the information taken is of value, take legal action.

Shannon Lakic is a solicitor with Leverage Australia Pty Ltd. Admitted in the Supreme Court of New South Wales in 2008 and holding a Certificate Iv in Training and Assessment, Shannon practices and teaches others in the areas of business law, real estate, franchising and strata management. Email Shannon at shannonl@leverageaustralia.com

The Australian Real Estate Review

real estate market

Phil Harris

South Australia’s

e are still experiencing a flattening or softening of the market but astute buyers are seeing the value of purchasing property right now. This makes pricing your property realistically even more imperative than in previous years and buyers really have the upper hand at the moment. Not all is lost for sellers either as what they may potentially lose on their sale they will easily pick it up when they buy. There could also be some great news just around the corner with Reserve Bank tipped to drop interest rates in reaction to the global economic mess we find ourselves in.

offers incredible value for money in the top end of the market. To put it simply “The higher prices are the further they fall!”

It is also extremely important to realise that Adelaide has not been nearly as affected as other mainland Australian capital cities. RP Data statistics show Adelaide’s median house prices to the end of April this year remained at $400,000, the same as for the previous 12 months. What is down is the volume of houses being sold with 16,538 houses changing hands to the end of April, down from 18,279 in the previous 12 month period. Many sellers are withdrawing their houses from the market because they are not getting the price they are after or alternatively leaving them on the market for extended periods of time. Again the only way around this is to price your property accordingly!

There is still plenty of activity in regards to apartment buying and if we see another interest rate drop this activity will only increase. There are still plenty of opportunities for the savvy investor. As we see Adelaide grow and more people living closer to the CBD the demand for apartments will only grow.

Top end stays high In another sign that the market is starting to recover the upper end of the Adelaide property market is performing extremely well. The top sale from May 2010 to May 2011 was a $5.6 million property at 28 Robe Terrace, Medindie. Here is a list of the top 10 house sales for the past year: 28 Robe Tce, Medindie – $5.6 million 1 College St, College Park – $5 million 29 Wood St, Millswood – $4.55 million 8 George St, Unley Park – $4.4 million 14 Angas Rd, Hawthorn – $4.207 million 126 Beulah Rd, Norwood – $3.8 million 5 Edwin Tce, Gilberton – $3.7 million 36 King St, Brighton – $3.5 million 2 Leonore Ave, Kensington Gardens – $3.39 million 29 Marlborough St, College Park – $3.375 million I believe one of the key reasons why our top end market has not suffered as much as other states and capital cities is that our high end prices are simply not as high. Adelaide and South Australia

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Apartments are on track Along with the high end property markets performing well, apartments seem to be also bucking the trend. There has been a slight drop in sales over the past year with the number of apartments sold down by around 600 and the median sale price dropping by around $6,000. What this data tells me is that apartment sales are quite steady and the demand is still there.

First home buyers are coming back With the news of somewhat steady or even a drop in interest rates will surely have gained the attention of would be first home buyers. To be honest this is crucial for further recovery of the industry in South Australia and nationally. If you look at Treasury statistics 6570 South Australians bought their first home in the 2010-11 financial year, down from 11,197 in 2009-10. In my opinion I believe we will see this trend start to turn around but again I stress that Government has to...and I mean has to make it easier for first homebuyers to get into the market. It is time to revisit a heightened stimulus package – this coupled with the banks loosening their lending requirements will make the world of difference. My advice to first homebuyers is to start thinking about it right now. It is a great time to find a bargain and capitalise on a somewhat “flat” market. What we need to see is people changing from a ‘shopper’ to a ‘buyer’. While I make this point I must also stress to do plenty of research and keep monitoring properties that you are interested in... When you start to see the price fall, be prepared to make a quick decision. It is also a good idea to try to find out why the vendor is selling. If they are relocating, you probably have a better chance of getting the price down than if they are just testing the market. Negotiation is crucial to securing a bargain so if they are not prepared to come down then refuse to continue.

Phil Harris

Top growth suburbs

The future is looking up

Let’s have a look at the best performing suburbs in and around Adelaide. Fringe suburbs and the top end of town are producing the best growth across Adelaide over the past year. The beautiful beachside suburb of Brighton was the best performing suburb over the last year. The median house price in Brighton jumped 38.3% to reach $780,000 from May 2010 to May 2011 – this is extremely impressive but not hugely surprising taking into account its beautiful setting and proximity to the very exclusive suburb of Glenelg. Medindie, North Adelaide and Tusmore also showed impressive growth. Joslin, Royston Park and Unley Park are also suburbs on the up and up.

As RP Data has recently noted there has also been a levelling of stock levels in major Australian capital cities – this is another good sign and while it doesn’t mean the market is close to a full recovery it is very encouraging.

Suburb

Many people ask me “what can be done to get this market back on track?” I strongly believe that the lack of home building activities is taking its toll on the housing market but also on local business with many people currently out of work. The government has to act and time is of the essence. Housing supply reform and a re-look at stimulus incentives are crucial and as always interest rates is a hot topic. We can only hope

2009-10

2010-2011

% Change

$564,000

$780,000

38.3%

$1,058,000

$1,450,000

37.1%

North Adelaide

$796,000

$1,040,000

30.7%

Tusmore

$840,000

$1,085,000

29.2%

Sefton Park

$433,500

$558,000

28.7%

Evanston Gardens

$254,000

$325,000

28.0%

Royston Park

$680,000

$866,500

27.3%

Joslin

$772,500

$980,000

26.9%

Marino

$480,000

$605,000

26.0%

Woodville

$410,500

$514,000

25.2%

Brighton Medindie

Great opportunities in regional real estate During difficult times like these I also suggest looking at regional real estate which is offering exciting opportunities to savvy investors. Here are my tips for the top 5 Australian regional real estate markets that are experiencing good growth in the past 12 months *APM; 5. Ceduna, South Australia – 4.81% (Median House Price = $272,500) 4. Orange, New South Wales – 5.02% (Median House Price = $335,000) 3. The Hunter Region, New South Wales – 5.85% (Median House Price =$349,000) 2. Port Hedland, Western Australia – 7.09% (Median House Price = $792,500) 1. Surat Basin, Queensland – 10.38% (Median House Price = $319,000)

that the government will do something to assist first home buyers get back into the market and give everyday Aussies a chance to live the ‘Australian Dream’! And remember if you are looking to sell, make sure you price your property accordingly. Take your time and research the local market and speak to a qualified agent to ensure your property price is set at a realistic target. And for the buyers out there take your time to have a good look around and enjoy the wide variety of affordable properties at your fingertips! I believe things are on the up and the market is showing real signs of improvement. I predict we are going to see a stabilising of the market moving into 2012 with enough listings to keep sustained pressure on prices. This is a real win but I have to say that a full recovery will be slow so patience is paramount.

Phil Harris is one of the most well-known and awarded real estate professionals in Australia. As Managing Director of Harris Real Estate, Phil has been providing a seamless real estate experience to clients over the past 10 years. Phil is the only real estate professional in Australia to have won both the REI South Australian Salesperson of the Year and the Golden Gavel Auctioneering Championships. He is continually striving for excellence and raising the bar on the South Australian real estate industry.

The Australian Real Estate Review

Auction Issues

why the top 20 per cent of agents in Australia

AUCTIONEER WILL HAMPSON DISCUSSES WHY THE COUNTRY’S LEADING AGENTS EMBRACE AUCTION.

nderstanding the benefits of auction and having a belief that the process works is the first step towards joining other top agents. Auction is a superb method of sale to market property for your clients; so many agents around the country are embracing auctions to sell more property in less time and are achieving great results. So why is it that the leading agents in our country embrace auction in a big way? The top 20 per cent of agents in Australia understand by maximising the exposure of their client’s property with a world class marketing campaign – combining print and digital marketing – to attract as many buyers as possible to the property, then putting a time frame on the sale, they are giving the property and their vendor an increased opportunity to achieve a premium unconditional sale. In taking a property to auction your average days on market are reduced by putting a set time frame on the sale. When a property is put to auction in a competitive environment we often see record prices achieved or sales that exceed owners’ and sometimes even agents’ expectations. On the flipside it is very rare to see a private treaty property sell above the asking price. Agents who utilise auctions regularly understand the benefit of having a crowd of 50 to 100, or even 300 people, seeing them in action negotiating with their marketing and branding, and the future business that comes from these auction campaigns.

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Auction Issues

All the people they meet – buyers who could be change over sellers, neighbours, past clients, potential vendors – gives the agent an opportunity to showcase their client’s property and at the same time their skill, ability, presentation, teamwork, branding, marketing, and negotiating. Word of mouth spreads and the property gets a lot more attention and publicity, as does the agent. To have a crowd of 100 people stand on your vendor’s front lawn, see you and your team put on a great event is very powerful to the perception of you, your office, and your brand. There are four levels as an agent that I see becoming more and more obvious as you go into any marketplace in Australia. • LEVEL 1 Beginner or New Agent – First 12 months in the industry getting established. • LEVEL 2 Established Agent – one to five years or longer in the industry with experience. • LEVEL 3 Repeat or Referral Agent – Normally five years plus in the industry, sometimes less. They are experienced agents who are well established and have clients coming back to them or recommending their services to others. • LEVEL 4 The Attraction Agent – These are the agents who stand out in their marketplace they do great marketing, are great at selling the benefit of marketing to their clients. Generally they always have listings, they enjoy a lot of repeat and referral business, have usually been in the industry more than five years sometimes less, sometimes only two years. Almost all of them embrace the auction process and are generally running a few auction campaigns all year around, the best of them might be running between two to 10 auctions a month. Think about it for a minute, if you run one, just one auction campaign a month every month, your vendors’ properties, your name, your brand is in the newspaper nearly every week of the year. When you or your agency has two or three pages of property marketed in the local papers who is reading that? Buyers looking to buy who may be change over sellers, potential vendors, home owners, people that live in your area that own property, rent property or know people who own or rent property. Who do you think they might consider talking to about buying or selling? The attraction agents are called in more often because they are perceived to be the most active and then often this perception becomes reality. When they are called in for the opportunity of listing, they often win the business. On average a home owner will live in a family home for around seven years. So why is it when the time comes to sell, for most owners what is their

most valuable asset some agents find it difficult to have clients invest in a marketing campaign? Over the thousands of properties and agents I have worked with I see one common trait from the attraction agents and it all comes down to one word “belief”. Attraction agents believe it is in their client’s absolute best interest to get a good, stand out marketing campaign. They also believe by removing price they can attract as many interested buyers to the home as possible. Once buyers are interested the agents utilise their professional negotiation skills to obtain the best price from the market for their vendor clients. An attraction agent puts their clients at the top of the shopping list for potential buyers to see and at the same time put their name and number out there for buyers, along with other sellers, to call to enquire on their listings. Potential clients and both buyers and sellers associate the top 20 per cent of agents with success and getting their property sold. They are more inclined to put their property or the keys to their most valuable asset in the hands of the agent who is going to go above and beyond to get them the absolute best result with great marketing, customer service and negotiation skills. So why not put yourself and your client’s properties at the top of the shopping list? Auction sends a clear message to buyers that the home owner is serious about selling their property, they have put a time frame or end date on the sale, and they are looking for an unconditional sale. So as an agent you are dealing with more qualified buyers, more motivated sellers, and you are reducing the days on market which increases the opportunity to secure a sale in a shorter time frame at the best price the market is prepared to pay. Success leaves clues and you only need to look in a number of suburbs around the country and across the states to see some of the most dynamic and outstanding agents who are in the top 20 per cent of agents and agencies and see how they are marketing property by way of auction. You don’t truly have an understanding and full appreciation of the auction process until you have done 100 auctions. As an agent, trainer, sales manager and auctioneer the best auction agents I have worked with have done this volume and more. If you want to become the best at something you need to look at who are the best and what they are doing to be the best. So if you are considering increasing your business and your auctions take a trip to Melbourne, visit the suburb of Hawthorn and see Glen Coutinho in action or skip across to Kensington and see Lou Rendina. Both of these guys are amongst the best auctioneers and auction listing agents in Australia. They are prominent figures in their local marketplaces and they are attraction agents. I am sure if you pick up the newspapers in Brisbane,

“Auction sends a clear message to buyers that the home owner is serious about selling their property...” Sydney, Melbourne, Adelaide, Canberra or Perth, people know who the attraction agents are, and who the agents who embrace the auction process in your area are. These days within 15 to 20 minutes a potential customer can go through the internet and newspapers and find out who are the agents in their area doing auctions and often select two or three agents to interview. If as a number of home sellers are deciding they want to auction their property or are considering auction and you or your agency does not do auctions or feature in local newspaper marketing there is a very good chance you won’t be one of those two or three agents getting invited in to sell the family home. The top 20 per cent of agents in Australia understand this and that is why we see them doing auctions. If you’re thinking you would like to be one of these agents perhaps consider increasing the amount of listings you take to auction or look at doing some training in relation to securing vendor investment in marketing and listing auctions as it’s never too late to go from good to great.

Will Hampson is Director of My Auctioneer Will is a professional auctioneer to agents across Sydney, surrounding NSW and the ACT with over a decade of experience as a licensed sales agent, accredited auctioneer and as a sales manager. He combines practical knowledge with new ideas and technology embraced by real estate agents around the world. Will provides an exciting platform for training and aims to deliver an enjoyable learning experience each and every time, combining 13 years of experience training and working with a number of leading agents in both Australia and the USA. Visit: www.myauctioneer.com.au for further information.

The Australian Real Estate Review

Melbourne Property

The property market

100

– What’s the trend?

orldwide events over the last eight months have made their mark on the state of the Australian economy, and thus the Australian property market. Since successive interest rate rises in 2010 by the Reserve Bank of Australia (RBA) to a cash rate of 4.75% last November, the RBA adopted a wait-and-see approach in 2011 as a number of factors locally and internationally impacted the economy. We witnessed floods and cyclones in Queensland, a massive earthquake in Christchurch, civil unrest in the Middle East and austerity measures to avoid bankruptcy in Greece and Europe. During August this year, stock markets around the world saw wild fluctuations. Many hit two year lows as a result of America’s credit rating downgrade from AAA status to AA. Property prices around Melbourne hit their peak last December. The Real Estate Institute of Victoria (REIV) reported the median price for houses had reached a record $601,500, a 20% growth for the year. Uncertainty over who was going to lead the nation in 2010 and a drawn Australian Football League (AFL) Grand Final

The Australian Real Estate Review

meant that property transactions were delayed for spring and were being made well into the month of December, traditionally a time when activity begins slowing down. Concern over local natural disasters and a strong media preoccupation with the US and European economies dented consumer and business confidence, which reached a two-year low despite better than expected terms of trade and the one-in-100-year mining boom feeding the Chinese economy, which is growing at (over) a phenomenal 9% GDP. The deal struck with four independent candidates to gain the balance of power over the nation last year saw strong direction compromised at a time when leadership was critical to reinstate confidence. Add to this the spectre of the carbon tax, higher unemployment rates, and the RBA expecting a contraction of the economy, and you have a scenario where experts are predicting up to four rate cuts totalling nearly 1% off the cash rate in 2011-2012. Banks reacted aggressively to this news and have begun cutting fixed rates in the second half of this year. The Australian dollar has come off a 28-year high of 110.55 US cents.

Real estate agents are reporting that properties priced at entry level are still attracting strong interest from first home buyers and investors. However, investors have cooled their heels as interest rates have risen and volatility in share markets around the world has taken hold. With average returns of less than 3.3% for a Melbourne residential property and a reported flat growth, most investors have made the decision to ‘park’ their money in savings accounts where they can receive up to 6.5% return without risk. Properties priced over $1 million have been experiencing the most difficulty in the Melbourne market; many have seen price falls between 10% and 20%. A number of prestige properties are being sold off-market, without advertising or internet exposure. The last two years have placed a strain on many big businesses, in particular those in retail or manufacturing forced to close or liquidate at the request of banks, administrators and shareholders. Duane Wolowiec from Marshall White says that, “properties between the $1.2 and $2.5 million price range are being well inspected; however, a number of buyers are feeling uncertain about the

Melbourne Property

future of the property market. Motivated vendors who are pricing their properties to meet market expectations are selling their homes. Clearance rates for our company are still strong and well above the current market average.”

extend and duplicate Kings Road at Taylors Lakes and connect through to the Calder Freeway via a new interchange.

Despite buyer caution, the Australian property market appears to have stabilised. The properties available for auction dwindled from highs of over $800,000 in April 2011 to a mere $450,000 in August, which has helped keep prices unusually firm. The REIv revealed that the median price of a house in Melbourne increased by 5.4% for the June quarter, from $560,000 to $590,000, and by 5.7% in the last financial year, a moderate price growth. An increase in vendor enquiries suggests Melbourne will see a strong spring season.

In the south east we are seeing growth corridors in both Frankston and Langwarrin. House prices in these areas are remaining largely stable and affordable. The median house price in Frankston for June was $375,000, and in Langwarrin it was $370,750, again well below the Melbourne median. According to the REIv, Frankston South and Mount Martha both recorded healthy median house price increases, and it is difficult to discount the impact of Peninsula Link on this, Melbourne’s next major road project, set to complete the missing section between EastLink and the Mornington Peninsula Freeway. Peninsula Link will save people up to 40 minutes on trips between Mount Martha and Carrum Downs, and will likely increase demand for houses with access to this network. Other significant upgrades to public transport facilities in the area include the Westall Rail Upgrade – the construction of a third track between Centre Road and Springvale Road, the redevelopment of the transport hub at Glen Waverley Railway Station, and the Dandenong railway line triplication project.

According to the REIv, Melbourne suburbs experiencing good capital growth in the June quarter have been Mount Eliza and Brighton in the south east, Essendon and the more affordable Melton and St Albans in the west, Northcote and Preston in the north and Mitcham in the east. We have noted certain trends developing in Melbourne and country victorian areas. There is a strong correlation between new infrastructure, population growth and property prices. Road expansions and extensions, new train stations and improved public transport facilities are exposing affordable outer areas to buyers, particularly first-home buyers looking to own the great Australian dream.

Melbourne East Melbourne’s east experienced little change in population growth or infrastructure over the last year, but due to above-average infrastructure the area maintains a strong population and healthy property market, despite economic disruptions. Suburbs such as Kew, Hawthorn and Canterbury recorded some of the highest median house prices in Melbourne in the June quarter. In the outer suburbs, affordable areas such as Ringwood are benefiting from their improved road accessibility as a result of the recently built EastLink freeway.

Melbourne West There has been strong general growth in the western suburbs, though it is outer-south western suburbs such as Werribee and Hoppers Crossing that are the fastest growing, due to the expansion of the West Gate Bridge, which has improved travel times to and from the city for commuters. The affordability of housing in the area, which is well below the $500,000 threshold, is also a major attraction. Melton’s median house price grew over the June quarter, coinciding with the Western Highway realignment, a $200 million project to provide a new freeway connection south of the existing route from Melton West to east of Bacchus Marsh, as well as a $62 million project to

Melbourne South-East

The Future Proposed projects such as the North East Link, a freeway designed to provide a road connection between the Metropolitan Ring Road in Greensborough and the Eastern Freeway in Bulleen, would facilitate considerable growth in outer northern suburbs such as Greensborough, Bundoora and Watsonia, and increase property values in these areas. Regional suburbs such as Geelong, Ballarat and Bendigo will likely benefit from the Regional Rail Link project, a new set of tracks which will allow passengers to travel directly to Southern Cross station without stopping in suburban stations. The reduced travel times and improved ease of access to the Melbourne CBD will have its impact on property values. This project will also benefit western suburbs such as Werribee and Sunshine by freeing up space for additional suburban services on the Werribee, Sunbury and Craigieburn lines.

Melbourne North Most of the significant infrastructural projects currently planned for Melbourne are intended for the northern corridors, which is no coincidence – these are the areas experiencing some of the most rapid residential growth. The Whittlesea municipality saw its population climb 6.1% (from 146,223 to 155,113) in 2010. The modernisation and in some cases reconstruction of major train stations servicing outlying areas (for example Epping and Thomastown) will be a boon for prospective residents who wish to work and attend school in the city. A $21.8 million State Government-funded project to extend the duplication of Plenty Road at South Morang will likewise attract those wishing to commute – the project will greatly assist traffic flow along Plenty Road, a major access point into the city. Due to these infrastructural developments, neighbouring municipalities are anticipating growth. Two of the three municipalities in Melbourne that experienced the greatest percentage increase in subdivision plans were outer and inner northern suburbs Hume (up 123%) and Moreland (up 121%). However, interest in house and land packages in Whittlesea has diminished since last year, largely a result of the changes in the government bonus scheme for first-home buyers. Whittlesea showed a 39% decline in vacant land sold, and subdivision plans from developers also dropped from 1,191 down to 820 since the December 2010 quarter.

Peter Sarmas commenced his real estate career in 1997, and worked his way up to become the number one agent in the office before starting his own real estate business. Wanting to broaden his property knowledge, Peter completed with Honours a Graduate Diploma in Property valuations at Melbourne University. In an effort to understand every facet of the real estate business, Peter took on the role of franchise manager where he oversaw and managed the success of a number of offices. With nearly 20 years of sales, marketing and management expertise, Peter has seen the importance of implementing systems in a business and the impact they have on sales, results and client retention. As the director of Street News, Peter works to provide real estate agents with content in a newsletter format ready to send to their database in soft or hardcopy. This content is the most current and relevant property information available from specialists in areas such as property valuation, building inspection, tax depreciation and interior design.

The Australian Real Estate Review

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