课 cppdsm4022a sell and finalise the sale of property by private by Chris Lan 蓝祖彬

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

CPPDSM4022A (Elective) Sell and Finalise the Sale of Property by Private Treaty

Learner Guide Â© The Australian Salesmasters Training Co Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |1 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Contact Page

Australian Salesmasters Training Co P/L Registered Training Organisation #6854

Phone:

(02) 9700 9333

Fax:

(02) 9700 8988

Email:

Info@thesalesmasters.com

Mail:

PO BOX 638, Rosebery, NSW 2018

www.thesalesmasters.com.au

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |2 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ÂŠ Australian Salesmasters Training Co P/L (ASTC) ASTC believes that the content of these notes and checklists are accurate and current at the time of printing. ASTC does not make any warranty of any kind, what so ever expressed or implied, with respect to the contents. It is the responsibility of the real estate professional using the notes and checklist to verify any information before relying on it.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |3 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Table of Contents Contents COURSE DESCRIPTION .................................................................................................................................... 5 LEARNER ACTIVITIES ....................................................................................................................................... 6 ELEMENT 1- QUALIFY BUYER ........................................................................................................................ 10 ELEMENT 2 -ARRANGE PROPERTY INSPECTION FOR POTENTIAL BUYER ..................................................... 16 ELEMENT 3 -DELIVER EFFECTIVE SALES PRESENTATION .............................................................................. 19 ELEMENT 4- SUBMIT OFFER AND NEGOTIATE PROPERTY SALE ................................................................... 26 ELEMENT 5- MAINTAIN COMMUNICATION WITH SELLER ........................................................................... 30 ELEMENT 6 -MANAGE CONTRACT TO SETTLEMENT .................................................................................... 47 ELEMENT 7 -PREPARE DOCUMENTATION FOR AGENCY DISBURSEMENTS .................................................. 53 ELEMENT 8 -DECIDE ON FUTURE CONTACTS WITH PROSPECTS .................................................................. 55 ELEMENT 9 -MAINTAIN CLIENT RELATIONSHIPS .......................................................................................... 64 CONCLUSION ................................................................................................................................................ 67 ACT REGULATIONS AND FORMS................................................................................................................... 68 OUR MOST SOUGHT AFTER PRODUCTS AND SERVICES .............................................................................. 82

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |4 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

CPPDSM4022A- SELL AND FINALISE THE SALE OF PROPERTY BY PRIVATE TREATY

COURSE DESCRIPTION This unit of competency specifies the outcomes required to sell and finalise the sale of all types of property by private treaty. It includes qualifying buyers, arranging for potential buyers to inspect listed properties, delivering effective sales presentations, submitting offers and negotiating property sale with sellers and buyers and maintaining communications with sellers and prospective buyers. It also includes monitoring the process between exchange of contracts and settlement for all types of property and businesses and preparing documentation for agency disbursements. The unit does not include the sale of property by auction. The unit may form part of the licensing requirements for persons engaged in real estate activities in those States and Territories where these are regulated activities.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |5 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

LEARNER ACTIVITIES Activity

Page

Questions styles

Due diligence

Covenants / defects

Records After an inspection

Listing kit

Exclusive Agency Agreement

Private Treaty

Special Condition

Deposits

10.

Building Rapport

11.

Contracts

12.

Cooling off Period

13.

Cooling off period

14.

Agents commission

15.

Black box

16.

Real Estate terms

17.

Purchaser / vendor responsibilities

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |6 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Legislation Legislation that may impact on the unit objectives can include: ▪

Property, Stock and Business Agents Act 2002 (NSW) particular reference to Section 51.

▪

Conveyancing Act 1919 and (Sale of Land) Regulations 2005 (NSW).

▪

Consumer, Trader and Tenancy Tribunal Act (NSW).

▪

Residential Tenancies Act 2010 (NSW).

▪

Landlord and Tenant (Rental Bonds Act NSW 1977).

▪

Privacy Act 1988 (Commonwealth).

▪

Fair Trading Act 1987 (NSW).

▪

Trade Practices Act 1974 (Commonwealth).

▪

Contracts Review Act 1980 (NSW).

▪

Relevant Environmental Planning legislation

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |7 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Element of Competency ELEMENT 1- QUALIFY BUYER 1.1 Enquiries from potential buyers regarding purchase of property are handled promptly to enable high quality service delivery according to agency requirements. 1.2 Appropriate rapport is established with potential buyer. 1.3 Buyer requirements are clarified and accurately assessed using appropriate interpersonal communication techniques. 1.4 Factors likely to influence the purchase of properties are identified and used to confirm buyer intentions. 1.5 Customer due diligence is undertaken according to agency practice and legislative requirements. 1.6 Potential buyers are provided with suitable information about available and prospective listings and assisted to find listing that best matches their requirements. 1.7 Potential buyers are assisted in making a decision to view properties using information obtained from sellers and buyers. 1.8 Qualified prospects are recorded to provide an opportunity to maximise future marketing activities.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |8 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Introduction This unit outlines the most common method by which property is transferred or sold across New South Wales, â&#x20AC;&#x153;Private Treatyâ&#x20AC;?. Private Treaty offers an invitation to the public to purchase property at a price that is negotiated or predetermined. This price is acceptable to both the vendor and purchaser. The sales department of any Real Estate Office has three basic methods of sale at its disposal, they are; Public Auction, Private Treaty and Tender. Each method has its own merits, probably the least known of the three options is Tender, which although forms part of the normal Private Treaty sale process, is more commonly practiced in the sale of larger residential, industrial or commercial property.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |9 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 1- QUALIFY BUYER Establish the client’s needs by: ▪ ▪ ▪ ▪

▪

▪ ▪ ▪

▪

Ensuring that client expectations of the agency and the market are clarified to the satisfaction of all relevant parties and confirmed. Establishing rapport with prospective vendor. Confirming the vendor’s motivation for listing property for sale and expectations of the agency and the market. Educating clients in regard to market influences affecting property sales by providing reliable and accurate information on market trends affecting the subject property. Identifying property improvements, estimated costs and likely influence on property sale/lease and price: • Size. • Condition. • Location. • Maintenance. • Chattels and fixtures. Identifying or making inquiries with the potential vendor about the existence of any material fact affecting the property. Using effective communication skills to respond to potential vendor questions and concerns. Providing potential vendor with information relating to agency agreements: • Advising content and types of agency agreements. • Obtaining authority to act. • Legal and statutory requirements. • Fulfilling agency agreement terms and conditions. Identifying and understand the role of a real estate agent in providing estimate of value and related/ underpinning statutory requirements.

Qualifying the Buyer The Property Stock and Business Agents Regulations 2003 Schedule 1 outlines the General Rules of Conduct for all licensed and registered persons. Clause 6 in these rules specifies that the agent is to work in the client’s best interests. To do this it is imperative that the salesperson spends time qualifying the buyer, ascertaining the motivation of the buyer will ensure the salesperson utilises time as effectively as possible on behalf of their vendor and minimises time spent on “tyre Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 10 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

kickers”. By questioning the motivation and readiness of the buyer the salesperson can determine whether they are acting in their clients’ best interests; that is that the particular buyer is a suitable and qualified party ready to negotiate on property. Correct qualifying will determine whether the buyer is genuine. Qualifying may involve the following details of the buyer: • Preferences. • Needs. • Motives. • Financial limits. • Capacity to purchase. • Buying intentions. • Qualifying techniques. • Personality types of buyers. • Match suitable properties to purchaser’s needs. • Marketing aids. The following are sample qualifying questions: (a) (b) (c) (d) (e) (f) (g) (h)

Has your finance been arranged? What is your budget? Is the purchase for investment or owner occupancy? How quickly will you be in a position to exchange contracts? How long have you been searching for this type of property? What other properties have you seen? Do you need to sell before you can purchase? Describe the home that best suits your needs?

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 11 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 12 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

The Role of the Sales Agent The sales agent must perform all required duties in a professional manner. They must have sufficient knowledge of the Act, the property as well as the principal they are to represent. We have discussed the importance of knowing what motivates the intending purchaser however, it is just as important to correctly qualify the principal. What are the principal’s reasons for placing the property on the market? It is essential that we have a true indication of the principal’s motivation prior to taking the property onto the market. What are the principal’s expected realisations on the property? Do they genuinely want to sell or are they just “Testing the Water”. If their intentions are not sound the sales agent may waste a great deal of time and effort on a property that may never be sold. Interpersonal skills and ability, along with a keen ability to listen to the underlying wants and needs of the principal, will assist the sales agent in servicing the client. In almost all cases, the client is the principal because it is the principal who has entered into an agency agreement (contract) with the agency and then pays a fee for using our services. The contract for sale held in the office of the sales agent must be studied by the sales agent. All encumbrances, drainage, title particulars (strata, Torrens, old system etc.) possible affectations pertaining to zoning or usage of the property should be known by all salespeople inspecting the property from your office. The principal is bound by the “Duty of Disclosure” to make known all particulars of the property. This is made available in the contract and the sales agent must be aware of its contents in order to satisfy the requirements of all prospective purchasers. A Private Treaty sale allows the prospective purchaser time to peruse the contract and conduct all necessary searches, (including a pest and building inspection) obtain finance, sell an existing property or shares they may need to assist in the purchase of a new property. Without the pressures involved in a sale by Auction, the sales agent can devote more time and attention to planning or altering a marketing program as well as identifying the main source of anticipated buyer enquiry. Constant communications with the principal and prospective purchasers will lead to a successful sale being concluded and continued business referrals from both principal and purchaser. Databases and business records of buyer enquiries and property sales are now your source for maximizing future listings of property for sale by private treaty!

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 13 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Land titles Property legislation in all states and territories is based on the Torrens principle of registration of title. Each state and territory has a central register of all land in the state which shows the owner of the land. The land title is the official record. It can also include information about mortgages, covenants, caveats and easements. Land and Property Information (LPI) maintains the largest centralised land title registry in Australia. Nearly all freehold land titles in New South Wales are Torrens Titles, based on plans registered by LPI which define the boundaries of each parcel of land. Every year, thousands of new land parcels are created through subdivision activity and LPI issues a Certificate of Title for each new land parcel to provide proof of ownership. Future transactions involving the land, called dealings, are also recorded on the Certificate of Title. Hundreds of thousands of these transactions occur in New South Wales each year. As well as buying and selling property, people take out mortgages, pay off mortgages, lease their property and inherit property, to name but a few. A very small proportion of land in New South Wales is still owned under the common law deeds based system that was used before the introduction of the Torrens system in 1863. LPI is currently converting remaining Old System parcels to the Torrens system. All land title records registered are maintained in public registers. For more information you can go to: http://www.lpi.nsw.gov.au/ Easements are usually but not always registered on the Title to the property. Registration takes place with Land and Property Information in NSW and the Office of Regulatory Services in the ACT. The purpose of registering an easement over land is to show on the public record that an easement exists. If you are purchasing land which has an easement registered on title, you are therefore aware of what the easement is, who it benefits and how it will impact upon your use of the land.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 14 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 2 -ARRANGE PROPERTY INSPECTION FOR POTENTIAL BUYER 2.1 Appointments are made for property inspections in line with agency practice, ethical standards and legislative requirements. 2.2 Preparations are made for property inspection in line with agency practice. 2.3 Promotional material on the property is used to describe main sales features of the property. 2.4 Effective questioning techniques are used to clarify buyer interest in the property. 2.5 Records of inspections are accurately completed in line with agency practice.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 15 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 2 -ARRANGE PROPERTY INSPECTION FOR POTENTIAL BUYER Inspections Inspections are a crucial part of the selling process. Inspections may be organised by appointment with the agent, by Open for Inspection or a combination of both methods. The agent should only be conducting inspections with qualified buyers and all efforts should be made to ensure inspections are organised to suit both vendor and purchaser. In the case of tenanted properties, the agent will have to adhere to the Residential Tenancies Act 1987 and the conditions outlined in the Residential Tenancy Agreement with regards to inspections. Clause 9.6 of this agreement outlines the agent’s access to show the premise to prospective buyers “on a reasonable number of occasions if the tenant gets reasonable notice“. The RTA 1987 subsection 2 (a) and (b) also stipulates that unless the tenant otherwise agrees, no inspections will occur on a Sunday or Public Holiday or outside the hours of 8.00am and 8.00pm. Consequently the agent may be required extend their sales role to liaise with the property management department of their office and tenants of leased properties to conduct inspections. It is good practise during inspections to provide brochures describing the property to the prospective buyers outlining the features of the property and its location in relation to essential services such as schools, shops and transport. During the inspection the salesperson should be able to interpret the buyers’ reaction in regards to any possible interest, this is a subtle form of qualifying that experienced salespeople find invaluable to gauge buyer interest. For example if during an inspection the buyers begin measuring walls for furniture or the width of the fridge space they are subconsciously telling the agent that they are superimposing themselves here, this is a strong buying signal for the agent to work with. This will also be of assistance to the salesperson in identifying alternative properties to that may be suitable for the prospect. During the inspection the agent is promoting the positive features of the property and any specific details they are aware of about the property. It is at this point that the agent be aware of their due diligence and duties according to the Trade Practices Act 1974: 1) not to engage in any misleading or deceptive conduct e.g. remaining silent if asked about any previous termite activity when the vendors have disclosed such a problem to you 2) not to make false or misleading representations e.g. promoting the land as suitable for development without certainty of appropriate zoning Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 16 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

3) not to engage in any unconscionable conduct e.g. taking unfair advantage of a client with poor English language skills Due to these requirements it is the agents responsibility at their initial inspect of the property with the vendors prior to listing to investigate the property to its fullest. This also includes specific inclusions and exclusions with the property to avoid any uncertainty.

It is necessary to understand what ownership of property means and how the following factors affect the ownership of property: • Fee simple and life estates. • Easements. • Restrictive covenants. • Caveats. • Adverse possession. The forms of property inspection: include: Appointment only. • Open to the public. Property inspection requires planning to accommodate. • Vendors and Buyers. • Tenants in occupancy. It is prudent to develop strategies for a property inspection: which may include: • • • • • • •

Following up and seeking feedback re inspections with vendors. Directing buyers to other suitable properties. Maintaining agency records. Remedies. Security of property. Risk strategies for Penalties. What records are needed?

It is a standard practice to keep an accurate Inspection Register to record all people who attend open house inspections and private viewings. The Inspection Register is used for the following purposes: • To record the contact details for future contact and to build your database contact list • To record feedback for the vendor and agency records • For security reasons A security register showing all people who have visited the house should also be kept along with a copy of the agency’s privacy statement. The privacy statement outlines to the visitor how the agency will handle and maintain the security and accuracy of the information given to the agent. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 17 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 3 -DELIVER EFFECTIVE SALES PRESENTATION 3.1 Factors affecting the successful conclusion of the sale are identified and addressed in the sales presentation. 3.2 Key decision makers are identified to ensure that their needs and concerns are met in the sales presentation. 3.3 Main features of property are matched to buyers' stated needs and motivation. 3.4 Relevant legal and financial information is used to support the sales presentation. 3.5 Effective communication and presentation skills are used to create buyer interest and focus buyer attention on the property. 3.6 Buyer is given time and space to evaluate property while time is used to maximum advantage to promote property. 3.7 Buyer is encouraged to clarify key aspects of property before a decision is made to purchase property. 3.8 Buyer questions are answered fully and honestly. 3.9 Details of offer to purchase property submitted by buyer are confirmed and documented.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 18 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 3 -DELIVER EFFECTIVE SALES PRESENTATION The Listing Process The Sale Process The agency will have its own policies and procedures regarding maintenance of a client database of all prospective purchasers. Often the individual salespeople maintain their own databases and often a hardcopy card system as well. No matter which system you operate under, the sales staff use these databases to list and match the property with a buyer. Initial enquiry may come from the internet, email, phone or a general â&#x20AC;&#x153;walk-inâ&#x20AC;?. Once the initial approach from the potential buyer has been made it is the responsibility of the salesperson to make that individual feel welcome and at ease, to qualify them and add them to the database. The salesperson must be a good communicator. It is their task to keep the buyer informed of any new property hitting the market that is a match to their needs. A simple phone call or email to the prospect even if there are no new listings, will keep the salesperson in favour and will assist in the sale process. The qualifying process performed either in the office, the car or elsewhere, prior to the inspection should have given the salesperson the opportunity of identifying the needs of the purchaser. The salesperson should be aware if these needs could be satisfied with this particular property and if so proceed to ascertain the intent of the buyer, if any. The salesperson must determine who the decision maker is. In the case of a young family the husband may be more concerned of the dollar value of the property whereas the wife may be more concerned with the local amenities the area has to offer and the aesthetic appearance of the home. By asking the correct questions the salesperson may proceed to making the sale. The Property Stock and Business Agents Act 2002 and Regulations 2003 govern all employees of the Real Estate Agency. Awareness and adherence to these guidelines and by being aware of our responsibilities as industry professionals the salesperson safeguards both themselves, the vendor and the prospective buyer and assists in the sale process by offering service and professional knowledge of the property they represent.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 19 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

If all requirements of the buyer are not met with the particular properties that you show to the buyer, the particulars of the buyer and their feedback from the inspections should be recorded on your database thus regularly updating the information you hold on your clients and listings. All employees of the Real Estate Agency are required to follow a Code of Ethics. The Rules of Conduct governing our industry outlines guidelines to which we must adhere. By being aware of our responsibilities as industry professionals the salesperson safeguards both themselves and the prospective buyer and assists in the sale process by offering service and professional knowledge of the property they represent. If all requirements of the buyer are not met with this particular offering the salesperson will include the particulars of the buyer to the list of prospects held in the agency. Other members of the sales staff may then access this buyer to introduce other properties they may be working on. This list should be updated at regular intervals. Feedback to your vendor is the key to a smooth and successful sale. If the vendor is constantly informed by their listing agent on the response to the various forms of advertising, the number of buyer enquires on their property and the specific feedback from the purchasers upon inspection of the property, you are upholding both your contractual and fiduciary duties to your vendor. Buyer feedback provides the agent and the vendor with invaluable knowledge of what the market is saying about this property. This information should be utilised to educate and condition the vendors about the marketplace. All inspections on the vendor’s property should be recorded and the vendor advised of each and every outcome. Once again, communication is the key to success. Always let him know what the market thinks his property is worth and not what you think! Key features of a sales presentation may include: • Key decision makers. • Identify needs and motivations of purchaser. • Match features of property to needs and motivations of purchaser. • Purchasers’ questions are answered fully and honestly. • Effective communication. • Inspect property. • Organise inspections with occupants (tenants or vendor). • Conduct inspection. • Security of property.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 20 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

This essential to communicate effectively with vendor by policy and procedure for: ▪ Face to face contact. ▪ Written communication. ▪ Telephone contact. ▪ Timing of communication. ▪ Record keeping requirements It is essential to identify and document the terms of offer including ▪ Status of purchaser, readiness to exchange, financial boundaries. ▪ Negotiation with purchaser/s. ▪ Application of consumer protection legislation. ▪ Ensuring that all potential purchasers are involved in the negotiation process. ▪ Communicating with vendor. ▪ Applying the Legislation relevant to submissions of offers in writing. ▪ Status of all potential purchasers. The Listing Presentation The listing presentation is the most important step in the sales process. Real Estate Agents are no different to any other sales agent in other industries; they must have a product to sell. Before the sales agent can hope to make a sale they must have something to sell. The Property Stock and Business Agents Act 2002 and the General Rules of Conduct insist that the sales agent possess the appropriate qualifications and or licence requirements to be proficient and have sufficient knowledge to conduct the business in accordance with the current legislative requirements. Once a call has come into the office from a potential vendor, the sales agent should make an appointment to inspect the property in the presence of the principal or vendor. Schedule 2 of the Regulations, Part 1 clause 1 explains the requirement for the agent to conduct a preliminary physical inspection of the property. The sales agent should utilise their time prior to the appointment to collate as much information about the property as possible including recent sales in and around the area the property is located. Comparative sales figures may be obtained from the Valuer Generals Department. This data is assessable from the Rates Department of the Local Municipal Council. Most real estate agencies have different software programs in their office, which provide them with a link to the Valuer Generals Department. This information is generally available to the public and will provide the sales agent with the information needed to perform an accurate market appraisal on the property. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 21 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

A competent sales agent will have a “Listing Kit” in the office from which they may demonstrate the ability and experience of the agency to perform the role as selling agent. It may contain examples of brochures or advertisements of other properties marketed by the agency as well as a brief history of the sales agent and agency itself. A listing presentation can be left with the principal, outlining the opinion as to value, the sales agent’s recommendations on marketing, an outline of the costs involved and selling features of the property. Section 56 of the Act states the requirement of the agent to give the client a copy of the consumer guide “Agency Agreements”. This can be given to the vendor up to one month before the agency agreement is signed. You should explain briefly the contents of the guide and suggest they take time to read it; you can then answer any questions your client may ask you regarding it. This guide must be part of your listing kit. The guides are available from the Office of Fair Trading. It is important to remember that if the sales agents cannot promote themselves they have little hope of convincing the principal that they can promote their property. The listing kit may have the following; •

Agency brochures

•

Evidence of past sales

•

Comparison analysis

•

Pricing information

•

Copies of agreements

•

Commission information

•

Marketing tools

Types of agency agreements There are several different kinds of agency agreements for the sale of residential property. It is important to be aware of the kind of agreement you sign, because it affects your rights and the amount of commission you may have to pay. You should discuss the agreement with a legal adviser if you are not sure about your rights. The following is an overview of the different types of agreements. Exclusive agency agreements Exclusive agency agreements are commonly used for the sale of residential property. In this kind of agreement, you give exclusive rights to one agent to sell your property. This may entitle the agent to be paid commission if the property is sold during the fixed term Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 22 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

of the agreement, even if the property is sold by you or by another agent. The agent may also be entitled to commission if the property later sells to a person who started negotiating for the property with the original agent. Sole agency agreements This is similar to an exclusive agency agreement. You give rights to one agent to sell the property but you may find a buyer yourself. If you find a buyer who has not been introduced by the agent, then no commission is payable to the agent. General listing / Open agency agreement This lets you list your property with a number of agents. You pay a commission to the agent who finds the buyer. Multiple listing This occurs when you deal with an agent who is part of a network of agents working together to sell your home. It covers both auction and private treaty. You pay a commission to the agent you signed up with. Auction agency agreement This is effectively an exclusive agency agreement where the property is listed for auction.

Private treaty When you sell your home by private treaty, you set a price and the property is listed for sale at that price. In general, the price is negotiable with the seller often asking a higher amount than they expect to sell the property for, and the buyer making an initial offer much lower than the asking price. The process of a sale by private treaty offers the following benefits: • greater control over the sale • time to consider offers by potential purchasers • the ability to extend the time for which your home is for sale indefinitely • potential purchasers must make offers for your property 'blind', without knowing what other buyers think it is worth. Selling privately is often just as tense as a public auction, and you will be faced with important decisions when you are presented with offers which are lower than your asking price. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 23 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

There are risks with selling by private treaty which also should be considered: â&#x20AC;˘ if the price you set is too high, your property may not sell â&#x20AC;˘ if the price you set is too low, you may miss out on maximising the selling price. You should also be aware that when a property is sold by private treaty, the buyer has a five day cooling-off period during which they may withdraw from the sale. Contracts and deposits

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 24 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 4- SUBMIT OFFER AND NEGOTIATE PROPERTY SALE 4.1 Offer from buyer is submitted to seller in line with agency practice, ethical standards and legislative requirements. 4.2 Professional agency advice is provided to seller that incorporates declared knowledge of buyer's motivation. 4.3 Negotiations are conducted with buyer according to seller response to offer. 4.4 Negotiations are conducted in a professional manner, including showing respect for seller and buyer in line with agency practice, ethical standards and legislative requirements. 4.5 Effective negotiation techniques are used to persuade and reach agreement between seller and buyer. 4.6 Alternative offers are discussed and their viability assessed. 4.7 Effective techniques are used for dealing with conflict and breaking deadlocks where required. 4.8 Effective techniques are used for closing sale. 4.9 Mutually agreed price and conditions of sale are established and confirmed with seller and buyer. 4.10 Relevant sale of property documentation is explained to seller and buyer in line with agency and statutory requirements for finalisation of the property transaction. 4.11 Documented, agreed price and conditions of sale are made accessible that provide an accurate record of agreement and meet agency and statutory requirements for finalisation of the property transaction.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 25 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 4- SUBMIT OFFER AND NEGOTIATE PROPERTY SALE Negotiating the Sale As previously mentioned the salesperson must be a good communicator. A good listener is a great communicator. Once the prospective purchasers have come to a decision on the property that best suits their criteria, they normally tender an offer to purchase the property. The salesperson must pay particular attention to the terms and conditions of that offer and how the vendor will receive it. If the offer was to fall within the parameters of the vendor’s expectations, a sale will be imminent. The negotiating process is: ▪ Trial Close ▪ Ask for the Sale ▪ Submit Offers ▪ Bargain and overcome objections ▪ Close and Confirm The trial close – This is a combination of observation and clever questioning which will enable you to assess the level of interest the prospective buyer has in the property and adjust your selling strategies accordingly. The concept of the trial close is to seek the buyer’s acceptance or their buy in of the property. This will also enable you to handle any objections the buyer may have. Ask for The Sale - This is the second state of the negotiating process. Most buyers will inspect a property several times before being comfortable to buy the property. The agent should would be very unlikely to negotiate the sale of the property on the first inspection. Some examples of some closing questions may be: • Is this the type of property you are wanting? • Does this tick all of your boxes? • Do you think your children will enjoy living here? • Does it meet all of your requirements? By asking these questions you will be able to assess if the buyers are ready to proceed. It will also give you the opportunity to handle any objections they may have.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 26 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Submit Offers - Generally the buyer will start with a low offer and then increase it according to the responses from the vendor. It is very important for the agent to ask the vendor what their bottom line is, so that the gap can be bridged. Both the Vendor and Buyer need to be informed of events so they are not left wondering. The offers can be submitted either in writing either by email, fax or by letter. It is better that there is a written trail for future reference. Bargain and overcome objections - This is the stage where the counter offers are being made. The aim of the agent is to keep trying to bridge the gap while keeping the buyer interested. When working this process the agent must keep feedback reports. The agent must always be honest and truthful with both the vendor and buyer. The buyer may at this stage raise some objections to try and strengthen their bargaining power. The agent must be diligent to handle each objection in a timely manner. Some examples may be: • The price is too high • The rooms are too small • Need a longer settlement period It is the agent’s job to handle these objections and bargain with the vendor and buyer. The aim is for both parties to compromise and work towards a successful sale. Close and Confirm – This is the process where the agreement has been met and the terms of the agreement are completed and the contract has been made official. If it is a Private Treaty Sale, the agent will prepare a Sales Advice. The purpose of a Sales Advice is to ensure that all contract terms and details are correct before the final contract is prepared for exchange. A copy of this advice is usually faxed or mailed to both acting solicitors/conveyancers and to the vendor and buyer. Identify and apply relevant ethical and conduct standards: • Act in best interests of vendor at all stages. • Disclosure of material facts to purchasers. • Fiduciary role to vendor. Identify implied matters in contracts for sale of property. Construct contracts or identify the requirements for special circumstances: • Vendor is providing finance. • Sale of units and flats. • Off the plan sales. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 27 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

•

▪ ▪

Special conditions ‘Special conditions’ are additional conditions attached to a standard contract, and are normally included in contracts relating to the sale of a land. Your solicitor is able to inform you on what conditions can be included as special conditions when drawing up your property sales contract, and can also assist explaining the special conditions that exist when you are considering the purchase of a property. A solicitors advice can help protect your interest as either a buyer or seller. For example, a special condition may be: Termite inspection certificate to be prepared by a registered termite inspection company or Payment of deposit amount in instalments, including that first instalment is to be paid on the signing of the sale contract with the balance amount to be paid upon financial sanction from bank. Submit offers and negotiate terms of sale. Complete sale of property documentation: • Exchange of contracts with cooling-off period. • Contract of sale for real estate / contract note. • Receipt for deposit. • Disclosure of beneficial interest. • Preparation of sales advice. • Role of agent between external stakeholders, legal parties, financial providers, councils.

Understand and implement appropriate communication with all parties and stakeholders during the offer period.

Qualifying the Offer Upon receiving the offer to purchaser from a prospective purchaser, the sales agent is obliged to submit the offer to the principal. Schedule 2 of the Regulations 2003, clause 3 outlines the agent’s responsibility to inform the principal of all offers as soon as practical and the agent must confirm that offer in writing to the vendor, identifying the party who made the offer. The offer may fall well short of the principal’s expectations, however it may be of assistance in the conditioning process of the principal. It is the duty of the sales agent to ensure that the offer is indeed genuine and the prospective purchaser has the ability and desire to proceed towards a purchase of the property, should the offer be accepted. Once the sales agent is satisfied that this is the best offer the prospect is prepared to submit, the offer should then be relayed to the vendor. All terms and conditions of the offer should also be discussed with the principal e.g. whether the purchaser has indicated they will be prepared to sign the contract and begin a cooling-off period if their offer is accepted. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 28 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 5- MAINTAIN COMMUNICATION WITH SELLER 5.1 Seller confidence in agency marketing activities is maintained through ongoing contact and correspondence. 5.2 Communication is diarised to provide an accurate and objective record of progress reports to seller.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 29 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 5- MAINTAIN COMMUNICATION WITH SELLER Maintaining communications with the vendor It is essential to develop strategies and policy and procedure for maintaining contact and correspondence with seller: This may include: ▪ ▪ ▪ ▪ ▪ ▪

Timely communication of changes to offers. Accurate communication of purchaser enquiries or concerns. Ethical conduct in relation to purchasers and sellers. Confidentiality. Diarising all communication. Maintaining diary and keeping diary entries accurate and objective

COMMUNICATION Running a business in the property industry relies very much on effective communication. This is true of any client-focused service business. Communicating well with clients requires more than just luck. It requires good skills incorporating the right technique and a positive commitment to the client. Rapport? If you have rapport with another person then you understand each other very well. It is also about mutual trust and respect. People often talk about meeting someone and having instant rapport with him or her, but in fact rapport is important throughout a relationship. Both parties need to work at maintaining rapport in the business relationship. How to Build Rapport We'll now look at strategies and techniques that you can use to build rapport with others. 1. Find Common Ground Think of how comfortable you might feel if, while living thousands of miles from where you grew up, you met someone from your hometown. That sense of connectedness creates an instant rapport between two people!

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 30 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

When you meet someone new, do your best to find something you have in common. Use open-ended questions to discover some personal information about the person: perhaps you attended the same school or university, have the same favorite vacation spot, grew up in the same city, know the same people, or root for the same sports team. Remember, any common ground can help establish rapport â&#x20AC;&#x201C; it can even help to have an interest in someone's life or hobbies, or to share similar beliefs and values. 2. Focus on Your Appearance How you dress is a key component of making a great first impression and establishing rapport with someone. Your appearance should help you connect with people; not create a barrier. For instance, imagine you're a sales rep calling on a plant supervisor. You're dressed in a well-tailored, expensive suit. Meanwhile, the supervisor has been working out on the floor all day; he's dressed in jeans, a worn flannel shirt, and work boots. The difference in your appearance is likely to make him feel uncomfortable and perhaps even slightly resentful. A good rule of thumb is to dress just a little bit "better" than the people you're about to meet. Whenever possible, find out about this in advance. If you arrive and see that you're overdressed, you can quickly "dress down" by taking off your jacket or tie and by rolling up your shirtsleeves. 3. Be Empathic Empathy is about understanding other people by seeing things from their perspective, and recognizing their emotions. Once you achieve this, it's easier to get "on their level." To be more empathic , develop your emotional intelligence so that you can understand others better. 4. Use Mirroring Mirroring is when you adjust your own body language and spoken language so that you "reflect" that of the person you're talking to. To use mirroring: Mirroring is a rapport-building technique in which one person adopts the physical and verbal behaviors of another. It tends to happen automatically between people who know each other well. Good friends will often use the same words or phrases and adopt the same gestures, particularly when they're together. This kind of unintentional mirroring also happens frequently in families, where kids adopt the behavior they see in their parents and older siblings. That's one reason why mirroring can be a powerful tool in a sales situation; the prospect may subconsciously assume you're acting like him because you are his friend.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 31 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Salespeople can use mirroring to quickly build rapport with a prospect. However, it's important to be subtle! Mirroring only works if the prospect doesn't realize that you're doing it on purpose. If a prospect does pick up on what you're doing he'll probably think you're making fun of him. Overdoing mirroring can also turn you into a caricature of the other person, which is sure to offend her. •Carefully watch the person's body language , including gestures and posture. If the person is sitting down with both hands folded, then copy the person's posture. As the person grows more comfortable with you, he or she may relax and sit back: mirror this change in posture as well. • Mirror the other person's language. If he or she uses simple, direct words, then you should too. If the person speaks in technical language, then match that style if appropriate. When you respond, you can also reiterate key words or phrases that he or she used. • Copy the other person's speech patterns, such as vocal tone and volume. For instance, if he or she speaks softly and slowly, then lower the volume and tempo of your voice. Who are our clients?

A general definition of clients might be anyone who utilises the Organisation’s services. The broad business philosophy behind client service suggests that clients are all who deal with the Organisation, and not just principals (people who pay a fee for work undertaken on their behalf). This broader definition can include property occupants, council staff and even the photocopier salesperson. These clients, who are from outside the organisation, are referred to as external clients. The wider theory of client or customer relations also includes those who are internal to the organisation. One department receives service from another and is a client of that department. In dealing with your internal clients, you should use the same communication skills as you use with your external clients. However, as commonly used in the property industry, the word ‘client’ best describes those who pay you a fee. In this reading we will focus on establishing positive relations with external customers—in other words, building rapport. Forms of communication It is worthwhile considering the forms of client communication that can occur in agency practice. The obvious ones are: • •

face-to-face—where the agent and client relate interpersonally telephone—the ever-present tool

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 32 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

•

written— not only business letters, meeting notices, agendas and minutes reports but also electronic writing such as emails and websites.

First impressions

When clients meet you for the first time, they will form an opinion of you within the first ninety seconds or so. This first impression is difficult to change so it’s important to work at making it positive. The greeting Smiles are infectious. If you greet someone with a smile, more than likely they will respond with a smile of their own. A warm greeting starts the relationship off well. Then, offering a hand to shake is also an accepted business norm. Do not be afraid to shake hands with women as most women in Australia accept this as a normal business greeting. If an older woman or someone from another culture does not respond, just withdraw your hand and carry on with the greeting. You should aim to be friendly, looking the client in the eye as you speak which is honest body language. Sound keen and enthusiastic: the client should feel that nothing is too much trouble for you. Non-verbal communication Just imagine you are an owner seeking to find a property manager who can manage their property competently. If the property manager doesn’t make eye contact with you and keeps looking at his watch as you try to speak to them, how would you feel? You might get the feeling that they are not interested in doing business with you. Maybe they've got something very worrying on their mind and just can’t help showing it but they have certainly lost the opportunity to establish rapport at that moment. Did you know that, when we communicate with someone, about 75% of our message is non-verbal? In other words it is not spoken. So we have to be just as careful of our body language as of the words that we use, if not more so. Our appearance and the way we greet clients are examples of non-verbal communication, but there are lots of other kinds of non-verbal communication too.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 33 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Body language Body language refers to those gestures, postures and facial expressions that people use to communicate non-verbally with each other. Body language is critical to building rapport. You can use it to gauge your client’s mood, or to project a certain mood yourself. You can observe clients’ initial body language and then moderate how you approach them. Observing posture There are two basic types of posture, closed and open. A closed body posture is probably the most obvious. People with arms folded, legs crossed and bodies turned away are signalling that they are either not interested in receiving messages or they are rejecting the ones that they are hearing. People displaying open gestures are also easy to pick. They might initiate a handshake, fully face you, offer a warm smile and lean forward or nod enthusiastically as you speak. This type of person is generally more at ease from the beginning, so you don’t have to work as hard to establish rapport. Sometimes body language isn’t so obvious or easy to interpret. If clients lean back, look up at the ceiling, doodle on a pad or clean their glasses while you speak, does this mean that they are not interested in what you are saying or are rejecting your message? Perhaps this is simply their preferred style: listening passively but still absorbing what you have to say. If you are not sure, measure their mood by asking questions, using empathy and generally getting them to open up and tell you what they want. Above all, listen. Careful observation and experience in dealing with a range of clients will prove the best teacher. Using posture You can use body language to project a confident, friendly image to clients. However, it does take practice to control your body language. Here are some ideas to help you. • Don’t adopt a closed posture yourself. This can form a barrier between yourself and the client and this may stifle the conversation. • Turn your body towards the speaker. This is an open and positive body language posture, showing you have nothing to hide. • Lean forward to show interest, but take care not to lean so close as to invade the other person’s personal space. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 34 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

•

Appear relaxed and receptive. The more relaxed you are the more relaxed and open the enquirer will become.

Eye contact Eye contact is one of the most important elements of non-verbal communication. It shows you are giving your client your full attention, which in turn creates rapport. You can ascertain if they are listening to you if they maintain eye contact. If you do not make eye contact, your client may feel that you are hiding something; proper eye contact creates the trust that is so important in establishing and maintaining the business relationship. It is also about confidence; any enquirer wants to deal with a confident manager rather than one who is ill-at-ease or not interested. Gestures Gestures are also critical to making the right impression. Standing with your hands on your hips or summoning people with a wave will not create a positive impression. Crossing your arms in front of your body will seem defensive. When dealing with a client, try to keep your hands loosely folded or at your sides. Cultural differences It is important to be aware that many cultures and nationalities have differing expectations of how clients should be treated. Many cultures are much more formal than we are in Australia. For example, using first names might be considered rude in some cultures, as may direct questions and enquiries about personal matters. Then again, in other cultures, asking direct and personal questions might be more acceptable than it is in Australia. Physical contact is another area where practices and expectations can vary a great deal between countries. Shaking hands is a good example: whether to do it at all, whether to shake gently or firmly—it all depends on the culture that the other person comes from. People may also interpret your gestures differently from the way you intended them. Some gestures are considered quite offensive by particular cultures. As a general rule, it’s best to use formal manners at first and let the client set the standard. Observe your client’s reactions if you are not sure. If you are dealing with people from other countries on a regular basis, it’s a good idea to find out about their culture to avoid making embarrassing mistakes.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 35 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Putting clients at ease No matter what type of enquiry you’re handling, your first goal must be to put the enquirer at ease. If enquirers are comfortable they will ‘open up’ and you will be able to get the information you need from them in a relaxed and open way. For example, if you have a meeting with a new client, the worst thing you could do would be to go bounding over offering a handshake and introducing yourself loudly. This probably wouldn’t put the client at ease. The best way to break the ice would be to approach, smile, introduce yourself in a moderate voice and then stand back a little. Clients don’t need you in their personal space. The smaller or frailer they are, the more important it is to give them a little distance and moderate your approach. Don’t stand too close and tower over them. It’s better to offer them a seat and sit opposite them; this puts them on an equal footing with you. Remember that, when you’re in the office, you’re on ‘home turf’—familiar territory. So naturally you feel relaxed—but don’t let your familiarity with your work surroundings make you careless. Use empathy. Look at the meeting through your clients’ eyes: they may be nervous, uncertain or apprehensive. Personal space All people have a sense of personal space—the minimum distance in which they feel comfortable with another person. It is an invisible volume of space—close to you at the back, a little wider at the sides, and larger in front. The actual distance varies between cultures. Nationalities with large personal spaces can seem cold or distant to us while others with small ones may seem pushy or aggressive. It’s all in the subconscious but it definitely has a noticeable effect on how we react to others, especially to those with whom we are unfamiliar. There is also a city/country divide in this respect. City people are acclimatised to being close while country people are not. Notice that, when shaking hands with a farmer, they will lean forward and extend their hand as though reaching through yours and their personal space to greet you. So it is best to maintain a respectful distance between your client and yourself and not get too close.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 36 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Touching Don’t touch people. This relates to personal space and a person’s comfort zone. After an initial handshake, touching a person to emphasise a point or to show closeness is not advisable. It is a personal gesture that has no real place in business—particularly in the case of opposite sexes, where the touch could easily be misinterpreted. Focus Resist distractions in the environment. Give the enquirer your full attention. Responding to distractions might be interpreted as rude, signalling that you are not interested in what the enquirer has to say. Don’t look at your watch. One of the fastest ways to let clients know that you are not thinking about what they are saying is to look at your watch while they are talking. Do this and you run the risk of indicating that you would rather be somewhere else. This does not build rapport. Verbal Communication Verbal communication takes place both in a face-to-face situation and on the telephone. The main difference is that, when you use the telephone with a client, neither of you can interpret the other’s body language. Using names One thing to learn pretty quickly in any job is that most people like to be greeted by name. Do you like it when people remember your name? How do you feel if you say ‘Hello Mr Smith’ and he replies ‘Oh, hello Mrs …’? Is Mr Smith being deliberately rude, or does he really not know your name and is embarrassed about it? To save yourself embarrassment, it really is worthwhile taking the trouble to find out the names of people your firm deals with regularly. You will notice that clients really respond to having a personal relationship with a service provider who knows them by name. They will go back again and again to ‘my barber’, ‘my coffee shop’ or ‘my mechanic’ simply because they unconsciously feel there is a personal connection there. Whether you should use first or second names, using the first name seemed friendlier but in some situations may seem impolite. Until on a first-name basis with clients, use their title, such as Mr Smith or Mrs Jones. Invite clients to use your given name during the meeting and they often do the same. Use a client’s name at the beginning, at the end and during an interaction. This helps to remember it, as well as creating rapport with the client. Clients usually seem pleased that you’re bothered. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 37 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Using empathy The key to developing a good rapport with a client is the ability to listen well and empathise with them. This means being able to: • • • •

have an understanding of the other side’s position ‘put yourself in their shoes’—try to see things from their perspective recognise their needs and wants use active listening techniques as they speak

For your part, your responses should be positive and enthusiastic, showing that you have concentrated on what was said and focusing on the content of the discussion. Empathy enhances the exchange of information. The tone of communication tends to be positive and concentrates on the needs and expectations of the parties involved. Active listening techniques Here is a really good technique to learn to make sure you really understood what clients were saying. It’s called active listening. Active listening involves participating in the conversation with the other person by such means as using questioning skills to show that you have understood the message that the client is trying to relate. It also involves paying attention to the whole of the message and repeating in your own words what you think has been said. This is called paraphrasing. Paraphrasing focuses on content rather than feelings. You can use phrases such as ‘Do you mean …’ or ‘What I am hearing you say, is…’. Here is an example from a conversation with Mrs Petersen: Mrs Petersen: We have a problem with the young people here … You: Do you mean some of the tenants in the block? Mrs Petersen: Not just them, they are all over the front yard… You: What I am hearing you say is that young people are congregating in the front yard, is that right? Mrs Petersen: Well, it’s on their way to the hotel over there. You: So they use the front yard as a shortcut? Mrs Petersen: Yes exactly! It can be scary at night with people walking all around! By using skilful questioning and active listening, you can obtain the necessary detail and fulfil your client’s expectations that they have explained themselves well. When you paraphrase like this, it gives clients a chance to confirm what they mean or gives them Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 38 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

the opportunity to give more information until they are sure you clearly understand their message. Being aware of your language When talking to your clients, it is important to use language that suits the situation you are in. Inappropriate language makes establishing rapport unlikely. For example, you would use polite formal greetings in an office situation or the specific phrases needed for answering the telephone, for example ‘Putting you through now’. Here are some other factors to remember. •

•

Avoid colloquial language—you should use appropriate, clear English when you speak. You can be friendly but you must also be businesslike. Being overly friendly with new contacts is unprofessional and reflects badly on your organisation. Using casual language such as ‘see ya’ or ‘dunno’ is not appropriate in a business setting. Avoid highly technical language or jargon. Using technical jargon may be appropriate in some business settings but could confuse clients. So keep your language simple. The use of acronyms (abbreviations) may also be a problem if your client is not familiar with the abbreviated form. Many government departments, for instance, are known by their acronyms but you should always use the full title. For example, instead of ‘the OFT’ you would say the ‘Office of Fair Trading’.

Tone of voice Your tone of voice conveys a great deal about the real message you are sending. You can also use clients’ tone of voice to find out how they are feeling. Timing We all have a sense of rhythm or timing in conversation and some people are better at it than others. Do you finish people’s sentences for them? Do you have trouble waiting for people to finish what they are saying? All people need time to clarify what they want and appreciate being given that time. If you do this, you are showing empathy and understanding. If you show by your body language that you are frustrated with a person taking too long, you may unsettle them so much that it will take more time to complete the business. If you either rush someone or take up more time than is necessary, you can destroy any goodwill created earlier.

Saying goodbye How you end interactions with clients is just as important as how you start them. After all, this is the final impression of you that they will take home with them. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 39 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Five things to remember are: • be friendly • be polite • use the client’s name • thank them • anticipate your next meeting Try to avoid over-used expressions such as ‘Have a nice day’. Here is a procedure for a successful ‘goodbye’ using the client’s name and being polite and friendly as well as thanking them and anticipating the next meeting: 1 2 3

Ask clients if they have all the information they need. Tell them what will happen from here. Assure them of good service.

If you are behind a counter with no way out, offer your hand for shaking and say goodbye. If you are in an interview room, stand up, shake hands and then walk your client to the door, saying goodbye. Using the telephone Of course, we couldn’t run this business without telephones and mobiles. We can all keep in touch with our clients and with each other. However, there are a few strategies that you should keep in mind when accepting or making phone calls. Remember, the decision for someone to call you is outside your control. And those calls have a habit of occurring when your attention is focused on some other important task and time is an issue. However, you can never sound impatient, as often a phone call is a ‘seed’ to new business. There are a couple of techniques you can use to shorten any lengthy calls to suit you and keep them to the productive business point: Firstly, be ready to take down details of any call. Don’t back off a new caller by making them wait for you to grab a pen or diary. Secondly, rejoinders that steer the conversation are very useful. For example, ‘…so what is a better time for you, Thursday afternoon, or even Friday morning?’ And when you talk on the telephone, always try to sound positive and enthusiastic—be willing to answer questions and show you are courteous and helpful. And always try to Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 40 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

use a greeting such as, ‘Good morning’ or ‘Good afternoon’ and then identify yourself or the organisation by name to the caller: ‘A&E Strata Services, Fred Smith speaking. May I help you?’ Another popular identification is:

‘Good morning, A&E Strata Services, this is Fred Smith’ People want to speak to a person, not an anonymous voice! Also, remember that the telephone is a very impersonal instrument. Your voice always sounds ‘flatter’ over the phone. Try to vary your vocal tone and voice modulation more. A good tip is to smile. If you are smiling, the timbre or tone of your voice naturally lifts and you sound enthusiastic. Finally, try to remember that over the phone you can’t see the other person. In face-toface conversation, non-verbal signals (body language) let you offer a welcome or emphasise a point. Over the phone you don’t have the benefit of being able to read the other person’s body language, so it is often necessary to draw out a clear understanding of the requirements of the caller by using appropriate questioning techniques. Delays

The property industry is a service business. A slow response to a ringing telephone is poor business practice, as it will give clients a bad impression of the Organisation. Things can get busy but it is important that all new incoming calls are answered after just 3-4 rings. However, try not to answer after just one ring, because this might startle the caller. When another call comes in and no-one else can answer it, ask the caller you are with, whether he or she minds if you answer the new call and—here’s a tip—wait for the answer before you do. Too often callers hear a rushed ‘please hold’ and the person is gone. When answering the new call, if you cannot quickly switch the call to another staff member then take a message and inform the caller that you will pass the message on to the relevant person. Then return to your original caller and begin by apologising for the delay. Small courtesies matter in business, no matter who you are.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 41 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Automated telephone systems If your Organisation has an automated telephone system, callers might hear music while they are on hold. Take care when selecting the type of music callers will hear. Light music is better than loud head-banging music or droning talkback, if you pick a radio station. You might also consider having a recording of some corporate information (about the services your Organisation offers, for example) for clients to listen to while they wait. Voicemail If callers leave a voicemail message, they need and expect a response. If no-one checks the messages regularly and actions these messages, then the Organisation runs the risk of annoying the caller. It usually falls upon the receptionist to clear the message bank but everyone in the Organisation should be trained to retrieve the calls. Enquiries are the lifeblood of the business and all need to be actioned promptly. Miss doing this or be slow in doing so and a caller might rightly wonder if the rest of the business association will be marked with similar slack treatment. Clearing the message bank should form part of the morning set-up duties in the same way as turning on the computer. Most agents use mobile phones, so messages can be passed on to them even if they are out of the office. Mobile Phone Etiquette Most property professionals carry a mobile phone. In fact, in a small Organisation they are vital to gaining new business as the principal/s are often in the field. So don’t forget to recharge the phone. A few more considerations that apply to mobile phone use: • • • • •

Don’t use them while driving—this is illegal, unless you use a hands-free kit. Try to remember that most users will raise their voice, especially when they are in a noisy location. Turn your mobile off at the theatre, cinema or other similar event. Switch the phone off at meetings and during appointments with clients. If you must leave it on in a meeting, excuse yourself to take the call.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 42 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Developing and maintaining business relationships Handling property enquiries and forming appropriate responses should be a positive experience: • •

acting on first contacts to establish a meaningful business relationship with the enquirer and then taking it to a conclusion that satisfies both parties

is a challenge that all in the Organisation should achieve well. From the client’s first approach through to the successful conclusion of the contact, there is the opportunity for the Organisation to provide a quality service. The smaller the Organisation, the greater is the need for all staff to have good customer relations skills. Relational Marketing and Referral Business It should be the aim of any Organisation to develop an initial contact into a longstanding relationship. There are two concepts at play here. The first is relational marketing. Over time, clients’ needs change. Parties that engaged your services to manage their property may well do the same when they come to buy or, if they invest, to determine a current fair market rental. Tenants can become owners, or developers who are seeking a competent manager for their property, and so it goes on. In fact, it’s surprising how much of the Organisation’s activities can be repeat business. Most property managers will handle the same property for a long period with a number of tenants coming and going. Also owners will move from one property to another and want “their” agent to handle the property for them and are likely to refer you to their friends. By definition, you offer a renewable service; if your work is competent and you have demonstrated good communication skills and developed a professional relationship with the client, you will be called on to attend to their other needs as time goes on. Better still, if that client is satisfied with your work, they will tell others about it! It all depends on building up a successful relationship. This is the best business an agency can win. However, it works both ways! If an initial dealing with a client is unsatisfactory, there will be no repeat business. I always make sure that my staff realise that a happy client is an ongoing advertisement for our agency’s services. Trust and honesty

At the heart of any successful relationship is respect. Respect between people comes about when they: Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 43 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

• • •

participate in a long, successful professional relationship observe each other’s actions and are impressed trust each other

The first two grow over time, but the third is important when initiating and then maintaining a successful business relationship. It is an essential ingredient of rapport. Some strategies for building trust 1

Be mindful of continually working towards developing trust. If you are aware all the time that you are trying to build up trust, you can develop strategies to achieve this goal.

Respond to questions and enquiries accurately. If you can show enquirers that you have access to the correct information then this will impress them. The more you have in memory the better. Attention to detail is the difference between an amateur and a professional.

Admit that you don’t know. No-one could expect you to have all the answers to every property-related matter. Don’t try to pretend you do, otherwise your credibility will disappear.

Respond to questions and enquiries promptly. Equally, if you are prompt in your responses, clients will interpret this as a sign of honesty. If you are hesitant or faltering in your approach, then this rarely inspires confidence.

Try to work in an overview of the market when the opportunity presents. Boring somebody does nothing to add to your credibility, but being able to tie your statements back to market evidence is a credible expert’s method.

Use language that is free of slang or exaggeration. Slang is ‘loose’ language, informal in structure and sometimes offensive. At the very least, it isn’t precise—and your business relationship should be.

Look clients in the eye when you talk to them. If someone does not look you in the eye, how do you feel? Do you think that they have something to hide, or are they just nervous, and if they are nervous, why? In any event, this is not something you want clients to be wondering while you’re talking to them. Look them in the eye.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 44 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Always seek extra clarification when it’s your turn to listen. Clarifying shows you have been listening actively. Also, if you paraphrase what clients have just said to you then it will ring true for them.

Act confidentially. Maintaining your principal’s confidentiality is more than good business practice – it is a common law duty. How can you act in the clients’ best interests if you disclose private and confidential information you have about them? Maintaining confidentiality is the same as maintaining trust. Breaking confidentiality is therefore dishonest and discreditable.

Don’t forget that honesty in business is the pillar of every service business's credibility. If you project a positive image to the wider market, business will flock to your door but if you ignore ethics and the statutory rules of conduct then your chances of successfully participating in the property industry will evaporate.

Principal Conditioning If the sales agent has fulfilled his or her duty to the vendor by communicating constantly and keeping the vendor abreast of market conditions, the sale should then be depended upon the conditions placed upon the offer by the purchaser. Remember that when listing the property the agent provided a comparative market analysis of similar properties that have recently sold to “substantiate” their opinion of a reasonable selling price to the vendor. Refer to sections 72, 73, 74 and 75 of the property Stock and Business Agents Act 2002 for details of representations as to the selling price. Any offer presented to the vendor will now be considered in light of the agent’s comparative analysis, the buyer feedback that you have been so diligent in communicating to your vendor after each inspection as well as any directional moves the property market and economy may have taken in the meantime. By keeping the vendor informed along the way of all of these factors the vendor should have a realistic idea of what the property will fetch on the open market. Your principal can then consider the offer, based on realistic variables rather than the vendor’s subjective opinion, which can be overshadowed by personal emotions. The property may have an intrinsic value to the principal, however emotions on the principals’ behalf have little or no effect on the eventual selling price. By continually informing the principal with market feedback the sales agent will assist in conditioning the principal to accept true market realisation for the property. It is Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 45 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

sometimes common to attract an offer from a buyer for a property in the early stages of marketing and is usually extremely difficult to convince the principal that this may be the best offer they will receive. â&#x20AC;&#x153;Vendor Feedbackâ&#x20AC;? is essential in the sale process. By continually informing the principal of feedback from all parties inspecting the property, the sales agent will not only assist the principal in setting a realistic sale price on the property, but also see the drawbacks affecting the property. A property is only worth what somebody is prepared to pay for it. This is where the term market price is derived. As a professional, the sales agent has a duty to the principal to achieve the best possible price from the marketplace. The sales agent must exhaust all avenues to ensure that the best possible price has been achieved and that the terms and conditions of the sale are in the best interests of the principal.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 46 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 6 -MANAGE CONTRACT TO SETTLEMENT 6.1 Settlement requirements are identified and checked with relevant parties to minimise misunderstanding or breaches of contract in line with agency practice and legislative requirements. 6.2 Requests from buyer to inspect property prior to settlement are facilitated in line with agency practice and legislative requirements. 6.3 Information on buyer and seller responsibilities with regard to building and content insurance prior to settlement is provided in line with agency practice and legislative requirements. 6.4 Procedures for holding and release of deposit moneys during the settlement period are implemented in line with agency policy and legislative requirements. 6.5 Settlement within the contract's legal framework is ensured by liaison with settlement agents and other assisting professionals representing the seller and buyer. 6.6 Progress of settlement agents and other assisting professionals is monitored in line with agency practice. 6.7 Contingency plans are prepared in consultation with relevant legal agents to avoid the possibility of one or more parties to the transaction being unable to fulfil contractual obligations. 6.8 Appropriate procedures are implemented if any party to the transaction is unable to fulfil contractual obligations. 6.9 Effective communication techniques are used in liaising with seller, buyer and other parties representing the seller and buyer through the settlement process.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 47 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 6 -MANAGE CONTRACT TO SETTLEMENT Terms and Conditions All terms and conditions set by the vendor are evidenced in their contract for sale, which must be in the possession of the Real Estate Agent together with the agency agreement prior to the commencement of marketing. When the property was listed for sale a “Sales Inspection Report and Agency Agreement” were completed, legislation requires the agent to serve the Principal (vendor) a copy of this agreement within 48 hours after it was signed. Refer to PSBA 2002 section 55. The agent’s copy of the agreement and evidence of serving it to the vendor/s should be held in a file in the office created specifically for that property. Any correspondence relating to that property including a copy of the Contract for Sale, letters of offer, and eventually sales advice letters are to be kept within this file. This procedure is imperative in your risk management procedures. The agent should have read the contract to be aware of any special conditions. The vendor may have chosen some special conditions upon advise from their solicitor/conveyancer in regards to the sale e.g. an early release of deposit money to assist in the purchase of their next home. The purchaser is not obliged to accept these terms and may ask the salesperson to negotiate these terms and conditions. Again it is important to remember that the sales agent is obliged to submit all offers to the principal and be careful not to provide legal advise to either client. This is the responsibility of the legal practitioners and should be part of your risk management strategies. The purchasers may be seeking a delayed settlement allowing extended time to have their own property sold, or alternatively may be looking for an early settlement as they are to move out of their current home prior to the date set by the vendor. If the property was vacant, the purchasers may ask for possession on exchange. All these terms of offer must be communicated to the principal. Be careful not to alter any terms and conditions in the contract without written authority from the vendor’s solicitor. Section 64 of the PSBA 2002 details what the agent is permitted to do with regard to the contract. Review this section now. Once both vendor and purchaser have reached an agreement, the salesperson may now complete a sales advice letter, which is forwarded to both parties’ legal representatives, outlining the sale agreement. In the case of a cooling off period the contracts will now be signed by the purchaser and vendor respectively and the 10% deposit held in the agents trust account. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 48 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

How the cooling-off period works Under section 59 of the Act, the agency agreement must be signed by or on behalf of the client. If there is more than one client, a signature is required for each client. The cooling-off period commences when the agreement has been signed by or for each of the client/s and ends at 5pm on the next business day or Saturday. Public holidays, bank holidays and Sundays are not included in the cooling-off period. For example, if the client signs the agreement on a Friday, the cooling-off period ends at 5pm on the following Saturday. If they sign on a Saturday, the cooling-off period ends at 5pm on Monday, unless that is a public or bank holiday, in which case it will usually end at 5pm on Tuesday. The length of the cooling-off period can be extended if the agent and client agree. This can be done in two ways: •

a term can be included in the agency agreement stating the agreed longer cooling-off period, or

•

before the usual cooling-off period ends, the agent can sign a written statement extending the cooling-off period.

If a buyer (including a corporation) buys Real Estate in NSW then a Cooling Off Period of 5 clear working days may apply. • •

•

This means a buyer has 5 working days from the date of exchange of Contracts to elect to proceed with the purchase or not. The purpose of the Cooling Off Period is to enable the buyer to secure the purchase of Real Estate in NSW and enable the buyer (or their conveyancer), during the Cooling Off Period, to arrange for pre-purchase inspections and/or enquiries of the property, such as building and pest reports, and obtain unconditional loan approval (if required). During the Cooling Off Period the Seller is not allowed to sell the property to another buyer (anti-gazumping).

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 49 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Contract for Sale of Land In a private treaty sale, the contracts are normally signed in the presence of the relative legal representatives. The principal’s solicitor or conveyancer makes any alterations to the contract. The duplicate contract, which is sent to the purchaser’s conveyancer, will have the same amendments. Both parties to the contract will be required to initial all alterations and sign and date the contract. The contract provides the purchaser with the option for a cooling-off period for a private treaty sale. (Be aware that the cooling-off period cannot be accessed if exchange was being conducted on the day of auction. This is covered in detail in PRDRE 26A). This cooling off period provides 5 business days for the purchaser to “cool off” or in other words change their minds after the contracts have physically been exchanged. It does not provide for the vendor to cool off! Once contracts have been exchanged the sellers are generally bound by the agreement. If the vendor does not agree to enter a cooling off period, it is common practice for the principal to insist that exchange will happen unconditionally. This is when 10% deposit is provided by the purchaser and the purchaser signs the contract without a cooling-off period. The purchaser completes all searches and ensures that finance has been formally approved prior to exchange and is normally expected to sign a 66W, which has the effect of waiving the cooling off period. If the cooling–off period has been entered into and the purchaser cools off prior to the fifth business day, the purchaser forfeits to the vendor .25% of the sale price and the balance of the 10% is refunded to the purchaser. If in the case of an unconditional exchange the purchaser rescinds, they risk 10% deposit and further costs if the vendor chooses to sue them. Be aware that section 64 of the Act outlines the extent of the agent’s duty to participate in exchange. It is important to adhere to the restrictions in this section, which are: 1) that the agent can only insert details into the “black Box “ on the front page of the contract 2) the agent is not authorised to alter settlement period or special conditions, the cooling-off period or complete tenancy details on page 2 of the contract Section 64(2) also states that the agent should be expressly authorised to participate in exchange. To do this the agent should ensure that they get a letter of authority to exchange signed by both the purchaser and vendor.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 50 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

The agent who has arranged the exchange of contracts this way must give copies of the signed contract to each party or their solicitor/conveyancer within 2 business days. This is stated in Schedule 2 clause 9 of the Regulations 2003. As part of the offices risk management procedures it would be best practice for the agent to physically hand the vendor the purchaserâ&#x20AC;&#x2122;s signed contract and hand the purchaser the vendorâ&#x20AC;&#x2122;s signed contract. The parties could then sign and date an acknowledgement confirming receipt of the contract. If the parties want the agent to deliver the exchanged contracts to their respective solicitors/conveyancers they can then hand back the exchanged contracts and the agent has written evidence (signed acknowledgement) that exchange did actually take place on that date.

PAYMENT OF DEPOSIT It is an essential term of a contract that the deposit be paid on or before the date of the contract (exchange of contract). The deposit paid can vary but it is usually 10% of the sale price. It is normally paid to the estate agent who holds it in trust pending completion as stakeholder. If a holding deposit has been paid before the contracts are exchanged then it becomes part of the 10% deposit and it is the 10% less the holding deposit that is paid at exchange of contracts. The agent holds the deposit in trust for both the seller and purchaser and cannot release it without consent from both parties. It is normal practice for that consent to be handed over at completion so that the agent can account to the seller. The agent will deduct his commission from the deposit. If the purchaser does not pay the deposit on exchange or if the deposit cheque is not honoured by the bank the seller can rescind the contract at any time up until the purchaser makes good the deposit. A Deposit Bond is a guarantee that while the deposit is not paid at the exchange of contracts it will be paid on completion and if the buyer is in default the underwriter guarantees payment. A deposit bond is usually used when the buyer is selling and all proceeds are coming from their sale or the buyer is borrowing 100% of the purchase price or for some other reason the buyer does not have a cash deposit.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 51 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 7 -PREPARE DOCUMENTATION FOR AGENCY DISBURSEMENTS 7.1 Settlement financial transactions are checked for accuracy against contractual documentation, and agency fees are calculated and safeguarded during disbursement activities. 7.2 Authorised agency disbursements are obtained within contractual, agency and statutory requirements. 7.3 Financial systems are updated to reflect authorised transactions. 7.4 Agency fees are calculated and safeguarded during disbursement activities. 7.5 Due and proper attention is paid to obtaining required authorisations, signatures and identifications prior to disbursement.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 52 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 7 -PREPARE DOCUMENTATION FOR AGENCY DISBURSEMENTS Exchange of Contracts The sales agent may also be invited to assist in the unconditional exchange of contracts usually held in the office of the principal’s conveyancer, both legal representatives meet to examine each copy of the contract. If both parties are satisfied that the contracts are identical and completed correctly, both contracts are dated and swapped. The purchaser’s conveyancer will hand over a cheque for the balance of the deposit. This “balance” is applicable if the sales agent may have accepted an initial deposit from the purchaser at the stage when the vendor accepted their offer. Often purchasers choose to leave an initial deposit to represent their intention to purchase however it is important that the agent advise the purchasers to their position. Refer to schedule 2 of the Regulations clause 5 now. Your responsibility will be to: 1) issue a receipt for the deposit, 2) advise the purchaser that their receipt is fully refundable, 3) advise the purchaser that both the vendor and purchaser are under no obligation to enter into a contract 4) inform the purchaser that the vendor can accept subsequent offers and that they (the purchaser) will be informed if subsequent offers by another party are presented 5) Inform the purchaser that they can make further offers until exchange 6) Promptly inform the vendor that the expression of interest deposit has been paid In some cases the purchaser may have the ability of placing the full 10% deposit with the agent depending on available funds. Either way the full deposit as outlined in the contract must be available on exchange.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 53 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 8 -DECIDE ON FUTURE CONTACTS WITH PROSPECTS 8.1 Nature of future contacts with prospects is assessed in the light of likely agencyclient interaction to a given point in time. 8.2 Business correspondence records are held on file to provide justification for the continuation or termination of contract, and are communicated without prejudice to the parties involved.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 54 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 8 -DECIDE ON FUTURE CONTACTS WITH PROSPECTS After Exchange Once contracts for sale have been exchanged and the five-day cooling off period has expired the sales agent can, in most cases, breathe a sigh of relief knowing a sale has definitely taken place and neither party can rescind the contract without facing severe consequences and financial losses. The real estate agency is named in the contract as the â&#x20AC;&#x153;stakeholderâ&#x20AC;? and holds the deposit in their trust account. Occasionally, the agent is authorized to invest the deposit in an interest bearing account for the settlement period, in which case upon release the vendor and purchaser share any interest earnt. The amount of the deposit is stipulated in the contract for sale and normally represents 10% of the purchase price. Contracts can be terminated by: agreement, performance, frustration or breach. If, for some reason the purchaser cannot complete the purchase of the property (performance) by the specified time (normally 60 days), the contract can be terminated. The vendor, being the innocent party is entitled to keep the deposit and sue the purchaser for compensation for losses incurred. The vendor may instruct the agent to place the property back on the market. All marketing costs, commission and other expenses will be paid for by the previous purchaser. The vendor is also entitled to sue for the difference between the price achieved and the price that was agreed to in the initial contract for sale. It is rare for a contract not to be completed by the purchaser and as outlined above, it is an extremely expensive exercise. The sales agent must communicate with both parties of the contract and their solicitors/conveyancers to ensure a smooth settlement process. This is part of the settlement planning stage - any problem that may arise which could affect the contractual obligations of either party should be overcome well in advance of settlement date to ensure both parties fulfil their contractual obligations.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 55 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Special Conditions After exchange of contracts, the agentâ&#x20AC;&#x2122;s role is secondary to that of the respective legal Practitioners, or Conveyancers. The sales agent becomes the liaison and assists both the vendor and the purchaser to ensure compliance with the terms and conditions of the contract relating to completion or settlement. The contract for sale identifies the date of completion as well as any specific performance required by either party to the contract. Typical examples of specific performance include: (a) The vendor is required to remove a garden shed illegally erected on the land (b) The vendor is required to repair fence on a side boundary (c) The vendor is required to remove all personal effects from the property (d) The vendor is required to grant vacant possession at time of completion The conditions to the contract are contained under the heading of Special Conditions. It is the responsibility of the sales agent to ensure that these conditions are met prior to settlement taking place. The agent should continually discuss the progress of the sale proceedings with the vendor to assist the settlement process. A contingency plan should have been discussed with the vendor in the unlikely event of the purchaser being unable to fulfil their obligations. Strategies such as referring to the list of other interested parties, the need for reinstating a new marketing plan and checking on legal rights of parties, can be negotiated. A contingency plan can also be put in place to assist the vendor in complying with his contractual obligations e.g. the agent may arrange for the removal of rubbish from the property and this expense will be reimbursed upon settlement.

Final Inspection It is customary for the purchaser to perform a final inspection on the property immediately prior to settlement. The purpose of the final inspection is to ensure that the vendor has performed his duties, as outlined in the contract, and to ensure that those fixtures and fittings as described in the contract remain with the property. The integration of a â&#x20AC;&#x153;best practice protocolâ&#x20AC;? should dictate that the agent visits the property prior to the final inspection. This inspection should highlight the need for any final negotiations between vendor and purchaser that must be completed before the property proceeds to settlement. It is easier for the sales agent to handle these final negotiations as the agent has been the focal point of all previous negotiation with both the vendor and purchaser and a trusting relationship should already have been formed. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 56 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

However, the legal representatives are employed to act in the best interests of only their respective clients. The sales agent has a duty of care to both vendor and purchaser and should communicate all negotiations to both parties’ legal representatives. Both practitioners are aware of their respective obligations and are careful to avoid any breach of contract. It is therefore imperative that the lines of communication between all the parties remain constantly open to avoid any misinterpretations.

Agency Disbursements Immediately prior to settlement taking place, the vendor’s legal practitioner will make contact with the sales agent’s office to confirm the amount held in trust. The practitioner will also advise on the manner in which the agent must account to the vendor. Depending on the normal practice of the real estate agency, the deposit is accounted for in a sales ledger. The sales ledger identifies the vendor and purchaser, the amount of deposit held in the agent’s trust account as well as any disbursements from that deposit. The sales inspection report and selling agency agreement that was executed between the principal and the real estate agency outlines the expenses that the agent will be paid for the services performed. Any other expenditure, not covered by this agreement, will need to be agreed to in writing between the principal and agent. For example some conveyancers instruct the agent to obtain a zoning certificate (149 Certificate) from the local council. These instructions are to be obtained in writing and if given verbally, the sales agent must insist that a letter or facsimile accompany it. Should the instructions not be received in written form the sales agent may have difficulty in having that cost reimbursed. All disbursements must be accounted for. The sales agent upon receipt of “The Order on the Agent”, will prepare a sales account letter to accompany a trust account cheque for the balance of deposit money. This letter of account will show the original amount of the deposit and itemise each and every expense deducted from that deposit. It is simply a transcript of the sales ledger. After all authorised expenses are the deducted the agent is now entitled to deduct the agreed commission and forward the balance to the principal. From Department of Fair Trading: Commission, fees and expenses The amounts charged by agents are not set by law. You can negotiate with the agent about the amounts of any commissions, fees or other expenses that you may be required to pay. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 57 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

According to the instructions in “The Order on the Agent”, the agent may be instructed to pay a proportion of the money held in trust to a third party, for example a bank or financial institution. The order may ask for some of the deposit money to be paid to cover the conveyancer’s fees. Either way, these orders represent the principal’s instructions and should be adhered to. It is important to remember, that in order to comply with the Property, Stock and Business Agent Act 2002 and its regulations, the agent’s commission must be the last deduction from the deposit money. In other words, if it was your responsibility to draw the cheques from your trust account, you always pay the principal before you pay yourself. This process safeguards both the principal’s and agency fees during disbursement activities. It is important that you now research the Office of Fair Trading website to access the Property Stock and Business Agents Act 2002. Read through Part 3 36 “Review of Commission and Fees” 1 2 3 and 4 and part 7 “Trust Accounts” sections 85 to 88. The trust accounts of all Real Estate Agencies must be audited once a year. (Refer to part 8 of PSBA Act 2002 where this is explained in detail.) The auditor must check that the agency does comply with directions of The Department of Fair Trading. The trust account must always have a positive or nil balance and never a negative balance. By ensuring that the agencies fees are deducted last, the account will always remain in a positive position. The sales ledger shows a running balance of the account. It is a safeguard against over spending on the principal’s behalf.

Settlement or Completion In New South Wales, sales agents are not necessarily required to attend settlement. It is expected however, that agents understand the procedures that take place at settlement, which may include: ▪ ▪ ▪ ▪ ▪ ▪

▪ ▪ ▪ ▪

Vendor/Solicitor settlement responsibilities. Notify rating and taxing authorities of sale. Discharge of mortgage Requisition of title Sign the Memorandum of Transfer Disconnection of water, gas, electricity, telephone and other services. Keys – ensure appropriate arrangements are made for both vendor and purchaser Purchaser/Solicitor settlement responsibilities. Requisition of title Final Title Search Transfer of Title Organise finance

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 58 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪

Get Section 603 Certificate from council Insurance. Property inspections. Settlement requirements. Prepare Settlement figures Contingencies. Default on settlement. Communication skills in liaising with vendors, purchasers and their agents (if tenanted tenants). Ethical and conduct standards- disclosure of material facts to purchasers

Documentation At settlement, the principal’s legal practitioner ensures that the front page of the contract and a “Memorandum of Transfer” is lodged with the Land Titles Office and that Stamp Duty is paid. The memorandum of transfer identifies the previous owner of the property, as well as the new owner. It identifies the area or size of the property from which council rates may be calculated, the nature of the occupancy, i.e. either vacant possession or subject to an existing tenancy and the legal practitioner representing the vendor. They also must provide evidence of discharge of existing mortgages. The purchaser’s solicitor completes the order on the agent. This order along with the directions to account from the vendor’s legal practitioner are then sent to the sales agent’s office. A notice of sale prepared by the vendor’s legal practitioner is then sent to the local council. In practice this is generally handed to the representatives of the financial institutions who may also be in attendance. Although it is customary that the sales agent be informed once settlement has been occurred, it is prudent for the sales agent to ring the conveyancers to check, prior to handing over keys to the purchaser or a cheque to the vendor. Most agents rely on receiving written authorization from the vendor’s solicitor prior to releasing keys to the purchaser. Once the sales agent is satisfied that settlement has indeed occurred, the keys for the property may be presented to the new owner. If a signboard had been erected on the property it should now be removed. This unit has outlined the importance of constant communications with our clients for the correct transfer of ownership during the sales process. Remember also that aftersales service remains an important final strategy if the agent is focusing on building a reputable client network. The principal has employed the agency to sell a property and agreed to pay a fee for services. The sales agent should know the forwarding address of the principal and if in Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 59 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

the area, should make an effort to keep in touch. The principal may remain as a future client. Also, the purchasers may decide to sell the property at some time in the future. Your professional manner at handling the sales process will be recalled by the purchasers and, combined with your marketing methods to keep in touch with your purchasers, they may remain a future source for networking. Providing the sales agent performed to the expectations of both the vendor and the purchaser, referrals may start to come in from both parties. Future referrals will lead to a successful sales career.

Property Marketing and Promotion The agentâ&#x20AC;&#x2DC;s role in the private treaty sale will also involve their skill in properly promoting the subject property to a targeted market. It will be their responsibility to advise the vendor on the most appropriate sales presentation techniques to address the salient sales features of the property and the overall marketing strategy. Throughout the marketing campaign it is important that the agent maintains the vendorsâ&#x20AC;&#x2122; confidence in the agency marketing activities by ongoing contact and correspondence with the vendor.

Signboards A signboard erected at the property is the most cost effective means of promotion. It promotes the property for sale and invites the public to make enquiries. It is your 24hour silent sales agent. The signboard used in a sale by Private Treaty is normally a generic board offering limited detail to the property. Depending on the practice of the agency and the location of the property being offered, the agency may ask the vendor for a contribution towards advertising. If so, this will be agreed to and included in the Sales Inspection Report and Agency Agreement. The sales agent and principal may decide to have a signboard specifically made that will describe the property in more detail. Often these now display internal photos of the property. This board should identify the major features as well as other intrinsic values the property has to offer and all contact details of the agent and the agency. The signboard has a dual purpose in that it not only advertises the property for sale, but also promotes the Real Estate Agency representing the property. Local residents perceive a strong sign presence of a particular agency to represent a successful business. Therefore, the signboard is probably the most important means of advertisement at the disposal of the sales agent. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 60 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Target Marketing Prospective purchasers have traditionally used the weekend newspapers, local papers and specific property magazines as their main source for identifying properties for sale. In recent times as our world has become more technically enhanced, the printed media has given way to the use of the Internet. Non-the less, buyers are often seen carrying newspapers etc. with them at inspections. Suburban newspapers are also a great selling tool for use by the sales agent. The local paper targets the people seeking property in a more specific locality. It identifies those properties being marketed in the area those prospective purchasers have already a desire in which to live. Brochures describing the property are an effective way of keeping the property before the eyes of the purchaser. Coloured brochures with photos depict the selling features of the property and assist in creating an interest or desire in the minds of the purchasers. They may be available at all open for inspections, become letterbox drops in specific areas around the listing or sent out to all prospective purchasers on the mailing list of the Agency, which may include, the homeowner, investor and developer. The agency should be monitoring the response to the variety of marketing strategies used to promote property. In this way they will be better educated in the success of the various strategies and will therefore be in a professional position to correctly advise their vendors of the most appropriate and successful methods in the specific marketplace.

Risks Strategies and procedures should be developed with regard to the following risks when selling and finalising the sale of property by private treaty: ▪ Appropriately qualifying offers and buyers. ▪ Security of property. ▪ Misleading or conflicting information provided to vendor/ purchaser re price. ▪ Failure to adhere to Property Stock and Business Agents Act 2002 & its Regulations 2003. ▪ Statements regarding the property that misrepresent facts. ▪ Failure to submit offers to vendor and follow up in writing. ▪ Exchange of contracts without proper authority. ▪ Inaccurate or lack of interpretation of terms/conditions of contract. ▪ Invalid contracts. ▪ Communication between all parties during negotiation process. ▪ Principles of contract law unfamiliar to agent. ▪ Fiduciary responsibilities to all parties. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 61 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

▪ ▪ ▪ ▪ ▪ ▪ ▪

Identifying/disclosure of conflicts of interest, beneficial interest. Failure to consider alternative methods of sale. Failure to verify marketing strategy and budget with principal. Failure to develop a marketing plan / inappropriate/insufficient advertising and marketing. Misleading representations about estimated selling price. Misrepresentation of a material fact. Inadequate knowledge of relevant legislation relating to Conveyancing, tenancy, strata and community titles, trade practices, stamp duty, credit codes, Property Stock & Business Agents Act.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 62 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 9 -MAINTAIN CLIENT RELATIONSHIPS 9.1 Future business relations are established by mutual evaluation of seller and buyer satisfaction with services provided. 9.2 Business records and databases are updated to facilitate networking and informed marketing strategy planning.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 63 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ELEMENT 9 -MAINTAIN CLIENT RELATIONSHIPS Future business relations are established by mutual evaluation of seller and buyer satisfaction with services provided. Establishing and maintaining business relationships is vital for the agency. Throughout all stages of the working relationships with the client, the agent needs to ensure that they are both professional and effective at all times. Clients may need to be contacted by the agent to request further information, negotiate, clarify issues, relay information and follow up. These may be done via face to face, letter, email, telephone and fax. It is important to make sure you are accurate, concise, timely and clear. Communication is dealt with on detail in Element 5. It is important to continue to communicate with all parties after the sale has been completed. A good way of doing this is to ask the parties to complete a satisfaction survey. A survey is a great way to obtain feedback in a non- confrontational manner. It is in your best interest to survey both parties as both parties have the potential to bring you referrals. Repeat and referral business is the easiest and cheapest form of advertising. It is a good idea to enter customer’s details including birthdays as it is important to diaries and send anniversary and birthday cards. Post Sale Marketing can also be important to do at this stage. Examples of this may be: • • • • •

Posting/emailing sales results to your database can be a great way to get more business. Displaying sold brochures in the agency window Just Sold flyers by letter box drop Advertising in local newspaper Telemarketing results

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 64 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Business records and databases are updated to facilitate networking and informed marketing strategy planning. Record keeping is an essential process in a real estate agency. Throughout the sale process agents will contact clients many times. All these point of contacts need to be diarised and entered into the appropriate database for future reference. When the initial contact is made with a prospective purchaser and an immediate listing is not made, agents should assess the chances of this person becoming a client in the future. Client business correspondence These records contain information on your clients and must be filed and updated as necessary and filed correctly. All files that are governed by the Property Stock & Business Agents Act must be kept for a period of 3 years. Any documentation that relates to the Taxation Office must be retained for 5 years. In general, the majority of agencies will keep the original file for 12 months after the sale, then transfer to their archives or scan and kept on a hard drive. To archive a file correctly the file needs to be dated, named and given an identifier that can be used to search and retrieve from their archives. All archived files should be logged into an archive register showing where the files have been archived. Financial record keeping For any transaction that has a financial element keep: • copies of invoices and receipts you provide for goods sold or services rendered • invoices for goods or services you purchase or bills you pay such as rent, rates, insurance, licence fees etc • payments to employees and to other organisations on behalf of employees e.g. super funds, PAYG tax • financial statements including profit and loss statement and balance sheet • tax return information • bank account and credit card statements • end of year stocktake records, assets register etc. Good practice records management should include preparing and using both the profit and loss budget and cash flow forecast. Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 65 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Business record keeping In addition to your ATO financial records requirements other government departments require you to keep records relating to your business and employees. When setting up your record keeping system, keep: • contracts, insurance agreements and other legal documents • your lease if you're renting • licences and permits • employee records including time sheets, copies of pay slips etc • safety records e.g. risk assessment for occupational health and safety • any other records which are 'business activity' specific and required by law for the operation of your business e.g. for a café your food safety plan.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 66 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

CONCLUSION Congratulations! You have now completed the course materials and assessments for the unit CPPDSM4022A â&#x20AC;&#x201C; Sell and finalise the sale of property by private treaty.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 67 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

ACT REGULATIONS AND FORMS • General rules of conduct applying to all licensees and registered person 1- 19 • Part 8 – Records • Information Sheet – Benefits of NSW land title • Statement of Title Particulars • Glossary of Terms

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 68 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 69 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 70 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 71 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 72 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 73 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 74 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 75 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 76 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 77 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 78 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 79 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 80 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

Glossary of Terms CHATTELS - Any fixed asset other than freehold land. Items such as machinery, implements, tools, furnishings, fittings, which may be associated with land use, but which are not fixed to the land or premises or, if fixed, may be removed without causing structural damage to a building. COMMISSION - The fee or payment made to an agent for services rendered, such as the sale of property, often calculated with reference to the value of the property, contract or agreement. COMMON (OPEN) LISTING - See Open Listing. CONSIDERATION - Payment in the form of money or other form of benefit in exchange for an agreed action (e.g. the receipt of goods and / or services). CONTRACT - A legally binding agreement. CONTRACT OF SALE - An agreement relating to the sale of property, which expresses the terms and conditions of sale. COOLING OFF PERIOD - A short statutory period after the contract is made, during which the purchaser may cancel the contract unconditionally. Usually does not apply in the case of auctions. DISBURSEMENTS - Recoverable costs. For example, in the case of real estate sales, expenses paid by an agent on behalf of an owner, such as advertising, rates and taxes. EASEMENT - A right to use the land of another (not involving the taking of any part of the natural produce of that land, or any part of its soil) or a right to prevent the owner of that land from using that land in a particular manner. Most commonly used where Government authorities have the right to run, for example, electrical mains or drainage through private property. Some form of compensation may be payable. FIXTURES - Those parts of a property affixed to structures or land, usually in such a manner that they cannot be independently moved without damage to themselves or the property housing supporting or pertinent to them. Fixtures are usually included in a sale and commonly include items such as carpets and awnings. PRINCIPAL -( a) A term used in most Australian contracts in lieu of ‘client’ or ‘proprietor’; (b) A licensed estate agent holding responsibility for an agency’s legislative compliance activities including legal responsibility for trust accounts. PRIVATE TREATY SALE - A sale negotiated directly between the parties or their agents. RESCIND - To terminate a contract of sale.

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 81 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc

__________________________________________ CPP40307 Certificate IV in Property Service (Real Estate)

OUR MOST SOUGHT AFTER PRODUCTS INCLUDE…CAN ANY OF THESE HELP YOU?

AND

SERVICES

Government Funded Training Programs Salesmastery Coaching and Mentoring Management and Leadership Workshops Phone Training Seminars/Programs Customer Service Workshop Experience In-House Training Workshops Smart and Skilled (NSW) Funding Provider 2 Day Sales Bootcamps Negotiation and Phone Skills Evening Clinics Audio, CD, DVD Training Programs “Your Success”- DVD Training Library (over 500 titles now available)

Australian Salesmasters Training Co Pty Ltd Suite 317, 30-40 Harcourt Parade ROSEBERY, NSW 2018 AUSTRALIA PH: (02) 9700 9333 FAX: (02) 9700 8988 Websites: www.thesalesmasters.com.au www.dvdtraining.com.au www.ebooksonly.com.au www.simpletruthsonline.com.au Email: info@thesalesmasters.com.au

Doc ID: CPPDSM4022A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 82 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\23. CPPDSM4022A\CPPDSM4022A - Workbook (L) eLearning.doc