课 cppdm40004a conduct auction

___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

CPPDSM4019A (Elective) Prepare for Auction and Complete Sale CPPDSM4004A (Elective) Conduct Auction

Learner Guide © The Australian Salesmasters Training Co

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

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

Phone: Fax: Email: Mail:

(02) 9700 9333 (02) 9700 8988 Info@thesalesmasters.com.au PO BOX 638, Rosebery, NSW 2018

www.thesalesmasters.com.au

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Š 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.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Course Agenda Table of Contents UNIT DESCRIPTION .......................................................................................................... 5 CPPDSM4019A PREPARE FOR AUCTION AND COMPLETE SALE ..................................... 5 UNIT DESCRIPTION .......................................................................................................... 6 CPPDSM4004A CONDUCT AUCTION ............................................................................... 6 REFERENCES and RESOURCES ......................................................................................... 7 LEARNER ACTIVITY SCHEDULE ......................................... Error! Bookmark not defined.

ELEMENT 1 - IMPLEMENT AUCTION MARKETING PLAN ................................................ 8 ELEMENT 2 - PREPARE AUCTION DOCUMENTATION ................................................... 20 ELEMENT 3 - PLAN AUCTION DAY PROCEDURES .......................................................... 34 ELEMENT 4 - IMPLEMENT AUCTION DAY PROCEDURES .............................................. 44 ELEMENT 5 - COMPLETE FOLLOW-UP PROCEDURES AFTER AUCTION SALE ................ 52 ELEMENT 6 - CONDUCT AUCTION ................................................................................ 55 CONCLUSION ................................................................................................................. 72 ACTS REGULATIONS AND FORMS ................................................................................. 73 OUR MOST SOUGHT AFTER PRODUCTS AND SERVICES ............................................. 100

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

UNIT DESCRIPTION CPPDSM4019A PREPARE FOR AUCTION AND COMPLETE SALE This unit of competency specifies the outcomes required to prepare for an auction and complete the sale of property. It includes implementing the auction marketing plan, preparing auction documentation, confirming the reserve price with the seller, planning and implementing auction day procedures, and completing follow-up procedures after auction sale. The outcomes required to conduct an auction are addressed in CPPDSM4004A Conduct Auction, in this module The outcomes support the work of licensed real estate agents, real estate representatives and support staff engaged in preparing for auctions.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

UNIT DESCRIPTION CPPDSM4004A CONDUCT AUCTION This unit compliments the outcomes to be achieved in CPPDSM4019A Prepare for auction and complete sale. It covers the preparation, conduct and completion of the sale of property by auction. It includes administration, advertising, pre-auction communication and conduct of the auction in line with agency practice, ethical standards and legislative requirements.

Skill and knowledge will be gained to support the work associated with conducting the auction and completing the auction sale in line with agency practice and legislative requirements.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

REFERENCES and RESOURCES Texts: A Glossary of Terms used in Real Estate & Valuation Practice - Frank Trimboli Fair & Square - A Guide for Real Estate Agents on Trade Practices Act - Australian Competition & Consumer Commission Property Stock & Business Agents Act 2002 & Regulation 2003 - Office of Fair Trading

Web Sites: www.fairtrading.nsw.gov.au - Office of Fair Trading www.accc.gov.au - Australian Competition and Consumer Commission www.domain.com.au - advice, properties for sale, auction results etc www.reia.com.au - Real Estate Institute of Australia www.reinsw.com.au - Real Estate Institute of New South Wales - texts on selling available for purchase with sections relating to auctions www.realestate.com.au - properties, agents, advice etc www.property.com.au - agents, properties, advice etc www.cttt.nsw.gov.au - Consumer Trader and Tenancy Tribunal www.workcover.nsw.gov.au - Occupational Health and Safety issues www.austlii.edu.au.- Australian Legal Information Institute - case histories and legislation www.lpi.nsw.gov.au - Government land and property information service www.abs.gov.au - Australian Bureau of Statistics www.ag.gov.au/aml - Attorney -General’s Department

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

ELEMENT PERFORMANCE CRITERIA ELEMENT 1 - IMPLEMENT AUCTION MARKETING PLAN 1.1 1.2 1.3 1.4

1.5 1.6

1.7 1.8

Agreement to auction is obtained from seller according to agency practice and legislative requirements.

Auction marketing plan is confirmed with seller in line with agency practice, ethical standards and legislative requirements.

Descriptions of property to be auctioned are prepared for use before and during auction.

Auction marketing plan, including inspections, open houses and relevant security arrangements, is implemented in line with agency practice, ethical standards and legislative requirements.

Marketing is monitored on a regular basis to establish effectiveness of marketing plan.

Enquiries from prospective buyers and other interested parties are addressed and where required copies of relevant documentation are provided.

Offers from prospective buyers prior to auction are referred to owner in line with agency practice and legislative requirements.

Regular reports on auction marketing are communicated to seller.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Element 1 - IMPLEMENT AUCTION MARKETING PLAN Common Auction Terms Absentee Bid Auction

A procedure which allows a bidder to participate in the bidding process without being physically present. a public sale to the highest bidder

Auctioneer

a person who conducts a sale by auction

Bid

the amount or price offered by the bidder

Bidder

a person who makes a public offer to buy the property during an auction a register of persons entitled to bid at the auction. Bidders who have registered have provided the agent with proof of identity and are provided with a bidders number approved consumer guide published by the Office of Fair Trading, which should be provided to all interested bidders. It outlines their rights and responsibilities in the auction final acceptance of the last bid indicating the auction sale is complete a hammer or mallet used by auctioneer (usually made of wood)

Bidders register

Bidders Guide

Fall of the hammer Gavel Passed in Purchaser Reserve Under bidder Under the hammer Vendor bid

a sale that is not complete when the reserve price at the auction is not met the buyer whose bid is accepted at the fall of the hammer the price set by the vendor - the minimum price that must be reached before a sale can be completed at auction the person who has made the next highest bid behind the successful or highest bidder the act of selling the property at auction a bid made by the auctioneer or another person on behalf of the vendor

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

INTRODUCTION Sale by auction is the public sale of land and/or property to the highest bidder, subject to a reserve price. The land and/or property is offered at a specified date, time and place to the public. This unit outlines the preparation and completion of a sale of residential property by auction. It covers the marketing, administration and conduct of an auction.

Although most real estate in NSW is sold through the private treaty method of sale, auctions have increased in popularity over the years. In major centers (especially Sydney) auction has been widely accepted as achieving or exceeding the price expectations for land and property.

The auction method of sale has traditionally been used by the Public Trustee for deceased estates, by the Family Law Court, and in mortgagee sales for many years as the preferred method for disposal of people's assets. An auction sale is seen as achieving the best price possible in such circumstances. The original purpose of an auction was to quickly dispose of debtor's assets to realise some return for their creditors. This has led to much debate about the real value of the end results.

It is a generally held belief that if an auction is adequately promoted and competition is created the price achieved is the best possible price on any given day.

However, there do exist critics of this theory due to the increased prominence of auction as a method of sale and the changing conditions in the marketplace. Not all auctions create a sale on the day; thus fuelling the critic’s arguments.

The primary obligation of an agent or salesperson is to act in the principal's (vendor's) best interest and this should be the main consideration when recommending the method of sale. If the property is best suited to an auction, the agent must be able to confidently justify their reasons for suggesting the auction method.

Supply and demand is the pendulum on which all sales activity is based and within that the main concern is the target market (who is going to buy this property?). This factor, along with the urgency or timeframe required by the vendor, will help to determine the most appropriate method of sale.

In recommending sale by auction (or any other method of sale) the vendor must be informed of the disadvantages as well as the advantages to enable them to make an informed decision.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Advantages of Auction to the Vendor • • • • • • • • • • • •

The vendor sets their reserve or the minimum price acceptable.

The vendor does not have to sell below this price.

The reserve price is not disclosed to the prospective purchasers.

Competitive bidding may provide a result above expectations on the day There is a pre-determined timetable for the vendor to work with; there is a set date to sell Controlled inspections at set times usually through regular open house provides less uncertainty and prior preparation.

The vendor sets the terms and conditions of sale.

An unconditional contract is achieved upon the fall of the hammer.

An extensive tailored advertising and marketing campaign can be utilised to create competition and publicity.

Purchasers must be pre-qualified and financially capable to buy on the day.

In the right circumstances, this is the best way of establishing the market value by open competition.

Can provide three (3) selling opportunities: o Before the auction o At the auction o Negotiate with the vendor on auction day (after property is passed in) or in the days/weeks following the auction

Disadvantages of Auction to the Vendor • • • • • • • • • • •

Auction can be a stressful process The property may not reach the reserve price Cost of the marketing program Vendor is still required to pay marketing and auction costs if the property does not sell on auction day.

There may be no competition at the auction, this can inhibit interested bidders If the property does not sell purchasers may be wary (why didn’t the property sell at auction? what is wrong with it?)

Timeframe may necessitate acceptance (by the vendor) of less than desired result.

Lack of competition may not achieve best price.

Successful bidder may have been prepared to pay even more.

Paying for marketing prominently displaying agents name and logo, promotes the agent at the vendors cost.

There is no absolute guarantee of success.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Auction Listing Section 55 No entitlement to commission or expenses without agency agreement (1)

A licensee is not entitled to any commission or expenses from a person for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person unless: the services were performed pursuant to an agreement in writing (an agency agreement) signed by or on behalf of: the person, and the licensee, and the agency agreement complies with any applicable requirements of the regulations, and a copy of the agency agreement signed by or on behalf of the licensee was served by the licensee on that person within 48 hours after the agreement was signed by or on behalf of the person.

(a) (i) (ii) (b) (c)

The Property Stock and Business Agents Act 2002, Part 4, Section 55, states that there will be no entitlement to commission or expenses without an agency agreement. For sale of property by auction, an auction agency agreement is signed with the principals - it offers the same benefits of exclusivity of the listing as does the exclusive agency agreement but it provides the vendor with a specified auction program and included in that program is a predetermined auction date.

Suitability to Auction: Whilst some agents consider any property can be put to auction it is preferable if the property meets one or more of the following criteria: •

An unusual or unique property

•

Waterfront or commanding views

•

Exclusive property

•

High demand property

•

Property with little competition

•

Property with few or no comparative sales

•

Property where it is difficult to establish market worth or value

•

Urgent sale required

•

Mortgagee sale

•

Deceased estate

•

Property that requires extensive marketing or promotion.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

All of these characteristics must be aligned with: • what is in the best interest of the vendors •

supply and demand, and

•

the current economic conditions

If the market is buoyant (listings are tight yet buyers are prolific) and the economy is favourable with low interest rates and low unemployment levels, the conditions may be ripe for competition so therefore auction would be a recommended method of sale.

The following factors must be considered when listing property for sale by auction (and when comparing sale by auction or by private treaty an auction offers several advantages): a) A set or advertised price is usually negotiated downwards by buyers whereas competition between bidders at auction can push the price up. b) The vendor sets the terms and conditions of sale and there is less scope for the purchaser to negotiate changes to the contract. The vendor has more control. c) Inspections are more regulated and less ad hoc. Open for inspection times provide the vendors with more certainty and, therefore, are less disruptive to their daily lives d) Contracts can be exchanged on the day with a quicker progress to settlement. e) Marketing program can be more targeted, intense and extensive. f) Buyers must be prepared to commit on the day with no cooling off period. g) All prospective bidders are together at one place and time to compete for the property. h) A planned, controlled program with constant communication and involvement by the agent.

During the listing process, it is vital that the agent or salesperson fully explain the auction process to the vendor and what will happen in detail. The vendor’s instructions, which are negotiated at the listing, must then be constantly referred to.

This will ensure the agent is adhering to the agreed marketing plan. Constant communication is required to ensure a successful result.

The marketing program and schedule needs to be established and adhered to by all parties. For example, a marketing plan over 4 weekends may not be suitable if the vendors can not make the property available for inspection on one of those weekends due to a family party.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

An auction will require a marketing campaign of four (4) to six (6) weeks prior to the actual auction day. Anything shorter than this does not give the campaign enough time to reach a broad market of buyers or give interested parties enough time to prepare to do their property searches and financial preparation.

Anything longer makes it difficult to keep prospective purchasers interested, prepared to attend and bid. The purchasers may be keen to move quickly and not prepared to wait. Over too long a period, the property may lose that sense of urgency and hence, may go “stale”.

Agents usually have a range of marketing and promotional programs that may broadly fall into the following three categories:

Exclusive/presidential package "All the bells and whistles"; - Includes national or even international promotion, target marketing to selected groups, television, radio, internet, virtual tours, radio signboards and even skywriting could be used to promote the property and auction.

Business class package A more standard program with less focus on high price add-ons and more local (Australian) market focus. Still a comprehensive tailored marketing and sales program.

Budget/economy package The bare bones designed for someone who may not be in a position to pay for a premium promotion and may include basics such as office produced non-colour brochures.

The agent will guide the marketing plan suitable to the property type and the vendor’s budget at the listing stage. The agent’s skill and experience in advising their client of the market conditions and appropriate choice of marketing will be crucial at this point. To be fully effective the agents approach must be flexible and allow the addition or subtraction of various components of the program to suit the vendor's circumstances. Agents may subsidise these packages or the vendor may pay the entire cost of the promotional campaign.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

MARKETING PLAN A marketing program must be determined. This is done in close consultation with your vendor to ensure you are both clear on their instructions and any contributions by the vendor which have been negotiated towards the cost of the program are agreed upon and included in the agency agreement. Below is a basic example of a marketing plan.

Auction Marketing Plan Mr. & Mrs. Vendor.

Property located at 11 Smith Street, Anytown Auction date: Saturday 15th June 2003 at 1p.m. on site Week one: ▪ ▪ ▪ ▪ ▪ ▪

Auction board erected at premises Property posted on the Internet Photographs to be taken Production of brochures of the property First advertisement in ………….

First open house inspection

▪ ▪ ▪ ▪

Distribution of brochures First advertisement in local newspaper Second advertisement in …………….

Second open house

▪ ▪ ▪

Second advertisement in local paper Third advertisement in ……………….

Third open house

▪ ▪ ▪

Final advertisement in local paper Final advertisement in ………………..

Fourth open house

▪ ▪ ▪

Auction flags or banners displayed at property Property open for inspection one hour prior to auction Auction

Week two:

Week three:

Week four:

Auction Day:

Total Cost

$2,951.00

Vendor Contribution $2,500.00

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

This program is for illustration purposes only. Additional to the program is the itemized schedule of costs for the various methods of advertising agreed upon which should also be provided to your vendors as part of their agency agreement. You therefore need to be familiar with the cost of various media and promotional materials used by your office in your location to be able to best advise your vendors.

There are many different ways to market a property and the sales agent must know which are the most effective for the type of property you are promoting and the market you are aiming to attract. The objective is to attract as many potential purchasers to the property as possible.

The skills for writing and preparing dynamic and successful advertising may come naturally to some agents. If that is not your forte then assistance from within the office, and your vendors themselves, should be sought. Remember, the aim of the auction is to create competition between the buyers at the auction to ensure a sale at the highest market realisation. Your marketing should fuel this competition.

As discussed, the marketing schedule outlines the procedures the agent is to follow.

It is imperative that the auction schedule is accurate and that the sales agent implements all promotion accordingly. Based on the marketing campaign in the previous example, the marketing schedule would be as follows:

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Marketing Schedule Auction May

11 Smith Street, Anytown $

15th Book auctioneer for 15th June Take photographs Prepare auction brochures (500 A4 size) Order sign board 6’ X 4’ Place advertisement SMH (12 lines) Publish photograph on Internet

200.00 16.00 175.00 280.00 295.00 no charge

18th First open house inspection 20th Place advert. In local paper (Display 2 columns)

320.00

Place 2nd advert in SMH (12 lines) Distribute brochures

295.00

22nd

25th Second open house inspection 28th Place 2nd advert in local paper

320.00

Place 3rd advert in SMH

295.00

30th

June

1st Third open house inspection 4th Place 3rd advert in local paper 320.00 6th Place 4th Advert in SMH

295.00

8th Fourth open house 16th Auction day notice in SMH Display Auction banner and sandwich board

140.00

AUCTION TODAY Total Marketing Costs

$2,951.00

Vendor Contribution

$2,500.00

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

All costs shown are for illustration purposes only and should not be used as an indication of an actual marketing schedule.

The sales agent should monitor the progress of the marketing campaign and in consultation with the vendor make any necessary changes to ensure maximum exposure has been achieved.

Depending on the location of the property and bearing in mind the normal office protocol, a suitable venue for the auction should also be discussed. The real estate agency may be part of a franchise organisation that holds auctions in regional rooms.

If the office is independent, it may hold regular auctions in their own rooms or on site. The sales agent should advise the vendor of the services that the office is capable of providing and should the situation warrant it, the alternatives made available.

The location of the auction should take into account what best suits the vendor and their property. For example, a waterfront property may best be auctioned on site with the water as the backdrop for the auction. On site auctions have the advantage of stirring emotions of the bidders because the property is real and visual.

Setting the Reserve As is evident in the example of the marketing campaign, advertising and marketing is costly and therefore must be well targeted and spent. It is also important for the vendor to set a realistic reserve on the property in order to achieve a result on the day.

Communication and feedback between the vendor and the sales agent leading up to auction day is vital. In fact, the more communication, the better. Your role as an agent is to inform the vendor about the results and feedback from inspections and local market trends. You need to educate the vendor so that they are in a position to make a realistic judgment of what the market is saying.

The same applies to potential purchasers. Keep them informed of what is happening in their marketplace. The greater the interest generated in the property, the better the likelihood of achieving above market expectations on auction day.

A meeting should be scheduled prior to the auction to discuss and set the reserve price. The feedback received at the open house inspections should have been relayed to the vendor, both verbally and confirmed in writing, following the inspections including both specific positive and negative comments and feedback.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Most real estate agencies write to the vendor and verbally communicate with them, advising of the number of parties attending the inspections, their opinions and any genuine interest. It is best to send regular written reports to your vendors. The written message is there for all to see. Remember, it is the marketplace that determines the value of a property at any given time, not the agent. Bad news must be relayed as well as good so that the vendor has an accurate and realistic picture of the current state of the market. The sales agent can only provide an estimate of expected sale price. The property is only worth what somebody is prepared to pay for it.

Once set, the reserve price will be submitted to the auctioneer in writing prior to the auction beginning. On auction day, if the property fails to reach the reserve, the property is “passed in�. However, directly after the auction itself the vendor may agree to reduce the reserve to accommodate the highest bidder and to get the property sold and exchanged on the spot. If the vendor is not willing to reduce their reserve price, then after the auction the highest bidder has the first right of negotiation on the property.

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

ELEMENT 2 - PREPARE AUCTION DOCUMENTATION 2.1 2.2

2.3

Purpose and content of auction documentation are explained to seller.

Auction documentation is prepared in a manner consistent with seller instructions, marketing plan used to manage the auction program, agency practice, ethical standards and legislative requirements.

Assisting professionals are followed up in a timely manner to ensure that auction documentation is completed prior to auction date.

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Preparing for an Auction Once the property has been listed for auction, the sales agent now works to a deadline. The auction date, time, and length of the campaign will have been negotiated and agreed to by your vendors. A marketing schedule should then be prepared, outlining the agreed promotion to be undertaken for the sale of the property.

The schedule should identify the dates that advertisements are to appear, the various publications selected, and the costs should be itemised (refer to part 7 Promotional Activities of the auction agency agreement here). The amount and time due for payment of the promotional costs by the vendor must be completed on the auction agency agreement at the time of listing the property (refer to part 8 Expenses here).

The auction agency agreement should also comply with the current legislation, the Property Stock and Business Agents Act 2002: Section 56 regarding the approved consumer guide provided to your principal; 56 Approved guide to be provided before agency agreement for residential property signed (1) A real estate agent must not enter into an agency agreement with a person for the sale of residential property unless the agent has provided the person with a copy of the approved guide not more than 1 month before the agreement is signed by or on behalf of the person.

Maximum penalty: 40 penalty units.

(2) In this section: approved guide means a guide with respect to the sale of residential property approved by the Director-General from time to time for the purposes of this section.

(3) A contravention of this section does not affect the validity of the agency agreement Section 57 regarding the disclosure of rebates, discounts or commissions 57 Agency agreement must disclose rebates, discounts and commissions (1) A licensee is not entitled to any expenses from a person for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person in connection with a real estate transaction unless the agency agreement pursuant to which the licensee performs those services contains a statement: (a) identifying the source of all rebates, discounts or commissions that the licensee will or may receive in respect of those expenses, and (b) specifying the estimated amount of those rebates, discounts or commissions (to the extent that the amount can reasonably be estimated).

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(2) This section does not apply in respect of a real estate transaction relating to commercial land, being land used or intended to be used solely or principally for commercial, business or industrial purposes, but not including land used or intended to be used solely or principally for agricultural or pastoral purposes.

Section 59 regarding the principal’s cooling off period.

59 Cooling-off period for residential or rural agency agreements (1) There is to be a cooling-off period for every agency agreement in respect of the sale of residential property or rural land.

(2) The cooling-off period commences when the agency agreement is signed and ends at 5 pm on the next day that is a business day or a Saturday.

(3) An agency agreement is signed when it is signed by or on behalf of the person (the client) for whom services are to be performed under the agreement. If there is more than one client, the agreement is signed when the last client to sign signs the agreement.

(4) The cooling-off period may be extended by a provision of the agency agreement, or by the agent in writing before the end of the cooling-off period.

(5) There is no cooling-off period if: (a) at least 1 business day before the client signs the agency agreement the agent provides the client with a copy of the proposed agency agreement together with (in the case of an agreement that relates to residential land) a copy of a consumer guide approved by the Director-General from time to time for the purposes of this section, and (b) before the client signs the agency agreement the client signs a form of waiver of cooling-off period in a form approved by the Director-General by order published in the Gazette.

It is necessary at the point of signing the agreement that these sections are adhered to. Your familiarity and compliance with the Act throughout the entire auction process is a legislative and professional responsibility that you must uphold.

As mentioned above, the auction agency agreement will document all promotional costs to be incurred by the vendor, the date of the auction and the terms of the agreement. Be aware that it is tactical to plan the termination of the agreement with your vendor to fall at least a few weeks after the auction date. This allows for the common scenario of the property being passed in at auction and subsequent marketing by the agency at an advertised price (private treaty). The agency will then have this crucial time to sell the property to a purchaser who may have been introduced to the property during the auction campaign or who shows interest after the auction date.

The primary purpose of the auction process is however to schedule the property to be sold on or before the nominated date of auction. Depending on the campaign agreed upon between the vendor and sales agent, there must be ample time for the marketing program to source prospective purchasers and ensure competition for the purchase of the property.

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The prospective purchasers will require a copy of the contract to take to their legal practitioners and if they are serious buyers they will commence performing the necessary searches. This enables the purchaser to be fully qualified to bid at the auction. The sales agent must coordinate the various inspections such as building, pest, council and valuations on behalf of the prospects and ensure all prospective purchasers are in a position to purchase prior to the auction.

These requests for contracts and organized searches and inspections by buyers provides the agent with valuable feedback for their principal regarding the degree of active, qualified interest re the property. Obviously the more contracts issued, the more searches completed via legal practitioners and the more building and pest inspections conducted prior to auction day provides a strong indication that there are qualified buyers and potentially the more active and competitive the bidding should be on auction day.

Prospective purchasers (Buyers) The auction process is made easier for the salesperson if they take the time to ensure that prospective purchasers are advised of the steps involved in bidding and buying at auction. It is a requirement under the Property Stock and Business Agents Act, 2002 Section 71 to provide prospective bidders with the consumer guide published by the Office of Fair Trading. The current guide called “Bidders Guide” sets out terms and conditions of sale by auction.

71 Approved consumer education guide for bidders at auctions (1) The Director-General may from time to time approve a consumer education guide for prospective bidders at an auction of residential property or rural land.

(2) A real estate agent or stock and station agent engaged to act in respect of the sale by auction of residential property or rural land must take all reasonable steps to ensure that a person who bids at the auction has been provided before the auction with a copy of the consumer education guide currently approved under this section.

An auction is synonymous with no advertised price however, in relation to price expectations, if a price guide is advertised, the buyers are entitled to enquire about the basis of your advertised estimate including comparable sales. Your attention to details of current comparable sales is vital here to justify the price guide you have provided to the buyers. Importantly though, they should also be advised to do their own research and to ascertain their bidding limit. Be honest and tell them that the idea of an auction is to create competition. In these circumstances, competition can lead to prices well above comparable sales and expectations.

Auction properties can be sold prior to the auction if an offer is presented that the vendors are prepared to accept. The agent’s close monitoring of the program and buyer interest up to this point is crucial. The agent must be able to report to their principal on the level of qualified, interested buyers, the stage within the marketing campaign, the contracts issued and inspections completed together with the current Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-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\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

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state of the market/economy. These factors combined will need to be considered carefully between the agent and principal to determine whether accepting an offer prior to auction is the best option for the vendor. Offers prior to auction should be presented to the vendor with a signed contract and a full 10% deposit. To protect your vendor’s best interests, an unconditional exchange must occur prior to the auction date, otherwise the auction must go ahead.

Advantages of Auction to the buyer The buyers: •

Have a predetermined timetable to work with.

•

Finance must be approved prior to the sale

•

If successful cannot be gazumped

•

Will have sellers who are usually motivated to sell within the time frame specified.

•

May have the chance of securing a bargain or paying less than they expected.

Disadvantages of Auction to the buyer •

There is no cooling off period.

•

Buyers must be organised beforehand and ready to bid on the day (finance etc.).

•

Auctions can be stressful.

•

The atmosphere can be competitive and high pressure.

•

Buyers can spend money on reports, conveyancing, finance etc and miss out.

•

May bid beyond the limit of their finance.

•

Can experience a number of near misses and become disillusioned.

The Bidder’s Guide publication will assist prospective buyers on preparing to bid and bidding with confidence. You should reiterate advice to buyers that they conduct their own research, attend several auctions to experience the atmosphere and be aware of their financial limit.

Forewarned is forearmed. Knowledge will prevent both the buyers and you from having problems afterwards because the buyers weren't educated regarding the auction process.

Remember the law - you must be honest, fair and reasonable to ALL parties in the transaction.

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Legislation The Property Stock and Business Agents Act 2002 and Regulation 2003 contain sections that relate specifically to the conduct of Auctions.

To auction residential or rural land or property in NSW you must be a licensed real estate or stock and station agent and have your license endorsed as an auctioneer.

The following qualifications apply: a) The completion of a course of study or b) The completion of a period of training in a particular activity (such as auctions) or c) The attainment of a standard of competency in a particular activity (such as auctions). d)

In other words, at the very least, you will be required to be deemed competent in this unit and hold a relevant licence.

Bidding, bids and bidders Section 66 of the Property Stock and Business Agents Act 2002 outlines the restriction on bidding on behalf of the seller or auctioneer; the sale is subject to the right of the seller (or anyone on their behalf) to make one (1) and only one (1) bid.

When the vendor bid is accepted by the auctioneer, the auctioneer must clearly state that the bid is made for, or on behalf of, the seller.

66 Prevention of dummy bidding (1) At a sale by auction of residential property or rural land: (a) the seller must not make a bid, and (b) a person must not make a bid on behalf of the seller unless the person is the auctioneer and makes only one bid on behalf of the seller, and (c) a person must not procure another person to make a bid on behalf of the seller in contravention of this section.

Maximum penalty: (a) 500 penalty units in the case of a corporation, or (b) 250 penalty units in any other case.

(2) For the purposes of this section, a bid can be found to have been made on behalf of a seller even though it is not made at the request of, or with the knowledge of, the seller.

(3) Without limiting what constitutes the making of a bid on behalf of the seller, a bid made with the dominant purpose of benefiting the seller in making the bid constitutes the making of a bid on behalf of the seller.

(4) An auctioneer must not sell by auction any residential property or rural land unless notice is given prior to the auction, in such manner and in such terms as may be prescribed by the regulations, of the material parts of this section.

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Maximum penalty: 20 penalty units.

(5) This section does not apply to the making of a bid by or on behalf of a seller in either of the following cases so long as the requirements of subsection (6) for bids by or on behalf of a seller as co-owner or as executor or administrator are complied with: (a) the seller is a co-owner of the land (whether as a joint tenant or tenant in common) and the bid was made to enable the seller to purchase the interest of another co-owner in the land, (b) the seller is the executor or administrator of the estate of a deceased owner of the land.

(6) The requirements for bids by or on behalf of a seller as co-owner or as executor or administrator are as follows: (a) the conditions under which the auction is conducted must permit the making of bids by or on behalf of a seller to purchase the interest of another co-owner in the land or to purchase as executor or administrator, (b) the auctioneer must have announced at the auction, before the start of bidding, that bids to purchase the interest of a co-owner in the land or to purchase as executor or administrator may be made by or on behalf of the seller

Section 66A imposes penalties upon auctioneers if in breach of knowingly accepting a bid not made, or from the seller or more than on bid on behalf of the seller.

66A Offences by auctioneers (1) At a sale by auction of residential property or rural land, the auctioneer: (a) must not acknowledge the making of a bid if the bid was not made, and (b) must not accept a bid if the auctioneer knows that the bid was made by or on behalf of the seller in contravention of section 66, and (c) must not make more than one bid on behalf of the seller.

Maximum penalty: 250 penalty units.

(2) An auctioneer at a sale by auction of residential property or rural land must not make a bid on behalf of the seller unless: (a) the conditions under which the auction is conducted permit the making of one bid by the auctioneer on behalf of the seller, and (b) the auctioneer announced at the auction, before the start of bidding, that the auctioneer is permitted to make one bid on behalf of the seller, and (c) immediately before, or in the process of, making the bid, the auctioneer announces that the bid is made on behalf of the seller or announces “vendor bid�.

Maximum penalty: 250 penalty units.

(3) Merely announcing the name of the person on whose behalf a bid is made (without stating that the person is the seller) is not sufficient to constitute announcing that the bid is made on behalf of the seller.

Section 67 of the Act states that bids may only be taken by the auctioneer from registered bidders. Registered bidders are persons who have been entered, before the bid was made, in the Bidders Record, and identified and issued with an identifying number.

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67 Bids may only be taken from registered bidders (1) The auctioneer at a sale by auction of residential property or rural land must not take a bid from a person unless: (a) the relevant details of the person have been entered before the bid is taken in a Bidders Record made in respect of the auction in accordance with section 68, and the auctioneer is in possession of that record when the bid is taken, and (b) the person is identified at the auction by the person displaying an identifying number allocated to the person for the purposes of the auction and recorded in the Bidders Record as the identifying number allocated to the person.

Maximum penalty: 100 penalty units.

(2) An auctioneer who refuses to take a bid from a person because of this section does not incur a liability to any person as a result of that refusal.

(3) The taking of a bid in contravention of this section does not affect the validity of the bid (or its taking or acceptance) and the bid (and its taking or acceptance) are as valid for all purposes as if this section had not been enacted.

Section 68 of the Act states that before any residential or rural land or property is offered for sale by auction a Bidders Record must be made of all people entitled to bid at the auction. If people are buying the property jointly, such as husband and wife, then only one person is required to register.

68 Bidders Record (1) Before residential property or rural land is offered for sale by auction, a record (the Bidders Record) must be made of the persons who will be entitled to bid at the auction and there must be entered in the Bidders Record in respect of each of those persons: (a) the relevant details of the person, and (b) the identifying number allocated to the person for the purposes of identifying the person at the auction, and (c) such other information as the regulations may require.

(2) The relevant details of a person are: (a) the person’s name and address and the number or other identifier of proof of identity for that person, and (b) in addition, in the case of a person bidding on behalf of another person, the name and address of that other person and the number or other identifier of proof of identity for that other person.

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(3) A real estate agent or stock and station agent engaged to act in respect of the sale of residential property or rural land by auction must make the Bidders Record required by this section for the auction unless some other agent engaged to act in respect of the sale or acting for or on behalf of the auctioneer has made the Bidders Record for the auction.

(4) An agent is to keep a Bidders Record made by the agent for at least 3 years and is to keep all the Bidders Records made by the agent together, in the form of a Register of Bidders Records.

(5) The regulations may make provision for or with respect to: (a) conferring an entitlement on a seller of residential property to inspect the Bidders Record for the sale of the property, and (b) the manner and form in which a Bidders Record is to be made and kept, and (c) requiring other information to be included in the Bidders Record.

Maximum penalty: 100 penalty units.

Code of Conduct 23. Setting aside minimum or reserve price at auction When the bidding at an auction does not reach the minimum or reserve price fixed for the property by the principal, the licensee conducting the auction must not set aside that price without the express permission of the principal or a person authorised to give that permission by the principal.

27. Bidding on behalf of a telephone bidder An agent must not bid at an auction on behalf of a person who is giving instructions to the agent by telephone unless: (a) the written authority on the basis of which the agent bids on behalf of the person contains an acknowledgement that the person has been given a copy of the conditions that are applicable in respect of the sale, and (b) the agent is satisfied that the person has been given a copy of those conditions.

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Bidders Record (register) Section 69 states that the Bidders record must contain: •

The person's name, address and number (or identifier) for the person

•

The person's identity must be checked by way of: o drivers licence; o Australian passport; or o other documents that adequately identify the person such as:

•

▪

a seniors card;

▪

vehicle registration papers;

▪

council rates notice

▪

Centrelink or Medicare card;

▪

ATM card;

▪

Credit or store card;

▪

Birth certificate

and one form showing the person's address such as o

a rates notice or

o tenancy agreement or o utilities bill etc

69 Details to be established by proof of identity (1) An agent must not enter a person’s name and address in a Bidders Record unless both the person’s name and their address details are established by the production to the agent of: (a) one or more proofs of identity for the person, and (b) in the case of the details of a person on whose behalf another person is to bid, a letter of authority to bid on the person’s behalf specifying the person’s name and address and the number or other identifier of one or more proofs of identity for that person.

Maximum penalty: 100 penalty units.

Note. Both name and address must be established by proof of identity but need not be established by the same proof of identity. For example, an Australian passport could be used to establish a person’s name and another proof of identity allowed by subsection (2) used to establish the person’s address.

(2) The only proof of identity that may be used for a person for the purposes of an entry in a Bidders Record is: Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-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\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

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(a) a motor vehicle driver’s licence issued in Australia that displays a photograph of the person, or (b) an Australian passport, or (c) such other proof of identity as may be prescribed by the regulations.

(3) An agent must not enter the relevant details of a person in a Bidders Record if the agent knows or has reasonable cause to suspect that the details are false in a material particular.

Maximum penalty: 100 penalty units If someone is bidding on behalf of another person then their details must also be recorded along with their letter of authority to bid and proof of identification for both parties.

In some instances you may need to have confirmation of date of birth to ensure that the person who intends to bid has the legal capacity to enter into a contract, i.e. they must be at least 18 years of age.

The record must also show the name, address and licence number of the selling agent, the auctioneer and any buyer's agents involved.

The successful bidder’s name is then entered into the Bidder’s Record at the conclusion of the auction. Section 70 states thathe entire record must be kept confidential and cannot be used for any other purpose, such as marketing other properties to unsuccessful bidders. It cannot be shown to anyone (not even the seller) and must be kept by the agent together with all their other bidding registers/records for a period of 3 years.

70 Confidentiality of Bidders Record (1) An agent who makes a Bidders Record, and any auctioneer to whom the contents of a Bidders Record are disclosed under this Division, must not: (a) divulge any information that the Bidders Record contains except as authorised or required by this Division, and (b) must not use the Bidders Record or the information that it contains for any purpose not authorised by this Division.

Maximum penalty: 100 penalty units.

(2) This section does not prevent the divulging of information to an authorised officer in accordance with a requirement imposed by or under this Act.

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False entry in auction record Section 79 makes it an offence to make false entries into a bidders record.

79 False entry in auction record (1) An auctioneer and an employee of an auctioneer must not knowingly enter in any record kept or required to be kept by the auctioneer as the purchaser of any land or livestock sold by auction any name other than the name of the actual successful bidder for the land or livestock.

Maximum penalty for a first offence: In the case of a corporation, 50 penalty units or, in the case of an individual, 20 penalty units.

Maximum penalty for a second or subsequent offence: In the case of a corporation, 100 penalty units or, in the case of an individual, 50 penalty units.

(2) Any auctioneer who employs any person, being a person who enters, in any record required to be kept by the auctioneer, as the purchaser of any land or livestock sold by auction any name other than the name of the actual successful bidder for the land or livestock, is guilty of an offence unless the auctioneer establishes that the auctioneer did not know that a name other than the name of the actual successful bidder was entered.

Maximum penalty for a first offence: In the case of a corporation, 50 penalty units or, in the case of an individual, 20 penalty units.

Maximum penalty for a second or subsequent offence: In the case of a corporation, 100 penalty units or, in the case of an individual, 50 penalty units.

(3) If the actual successful bidder at a sale by auction of any land or livestock, as soon as practicable after the auctioneer conducting the sale has indicated the actual successful bidder but not in any case later than the day of the sale, informs the auctioneer that the bidder bid on behalf of another person and informs the auctioneer of the name of that person, the auctioneer or employee is not guilty of an offence under this section by reason of the name of that other person being entered in a record as purchaser of the land or livestock

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ELEMENT 3 - PLAN AUCTION DAY PROCEDURES 3.1 3.2 3.3 3.4

Auction day procedures are confirmed with seller in line with agency practice, ethical standards and legislative requirements.

Property is inspected by auctioneer prior to auction day according to agency practice and legislative requirements.

Reserve price is confirmed with seller in line with agency practice, ethical standards and legislative requirements.

Staff, equipment, promotional materials and other requirements for auction are identified and arrangements are made to ensure their availability on auction day.

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Best time to sell your house at auction

by Danielle Cahill 17 JUN 2016

When it comes to selling your home, the early bird catches the buyers.

While Saturday remains the most popular day for auctions, new data shows early morning auctions achieve a higher clearance rate than those held later in the day.

An analysis of realestate.com.au data for more than 60,000 auctions held between 1 May 2015 and 15 May 2016 in Melbourne, Sydney and Brisbane reveals the most successful time to auction a property.

The analysis compared the clearance rates in all three cities against the most common auction times, days and seasons to discover which combination is most likely to result in a sale.

Adelaide, Canberra, Perth, Hobart and Darwin were excluded from the results as they did not meet the data requirements, as most properties in these cities are not sold via auction.

Best time to sell your house Saturday remains the most popular day to sell a home at auction. While this can be a boon for sellers, it often means more competition for buyers.

Of the over 60,000 auctions analysed, 89.6% went under the hammer on a Saturday and 1.6% were auctioned on a Sunday.

Winter is the season with the highest clearance rates.

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Mid-week auctions in Sydney and Brisbane also achieve high clearance rates, though there are far fewer properties auctioned at that time.

Getting in early appears to be the best sales strategy, with auctions and 9am and 10am delivering higher clearance rates than at other times of the day.

In Sydney 75% of 9am auctions result in a sale and in Melbourne 73.2% of properties auctioned at 10am are sold.

In Brisbane 49% of properties auctioned at 9am result in a sale and 42.45% of 10am auctions end in a sale.

REA Group Chief Economist Nerida Conisbee says the decline in clearance rates in the middle of the day suggests early sales have an impact on properties auctioned later in the day.

“It may be that as houses sell throughout the day, there are fewer buyers in the market,” Conisbee says.

“For example, if a purchaser has two properties they are interested in and the first is at 9am and the second is at 11am, then if they are successful at auction at the first, they are no longer interested in the 11am purchase.”

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The varied Saturday clearance rates associated with different times did surprise LJ Hooker Head of Research Mat Tiller.

“In some states, there’s as much as a 12% point difference between whether you sell early in the day, in the middle of the day or at the end of the day – that variance is quite significant,” he says.

However he says the numbers may also reflect more what individuals are doing on weekends, rather than their interest in auctions.

“People like to attend auctions first thing, get it over and done with. But the middle of the day is probably the busiest time of the weekend given things like kids going to sport, some might have lunches (to attend) and things like that,” he says.

The results for Sunday follow a similar pattern, with auctions held at 10 and 11am associated with much higher clearance rates than those held during the middle of the day.

Best season to sell your house So if Saturday is the day most choose to auction their house what is the best season to sell?

While most think of spring when auctioning a home, the data shows that buyers see things differently says Conisbee.

“Winter came up as the season in which clearance rates were the highest. The amount of stock in the market is slightly less, so this is a factor, however it does show that if you want to sell, the season should not be a restriction,” she says.

Video: Auctions bounce back Average clearance rates across Sydney, Melbourne and Brisbane for winter were 74%, while autumn came in second with an average clearance rate of 69.8%. Spring, which most think of as the traditional selling season, had an average clearance rate of 61.8%, while summer was slightly lower at 61.1% Public holidays and school holidays can also have an impact, according to Tiller.

“If you’re selling a family house, it’s probably not good to do it on a long weekend or during school holidays as families tend to be away,” he says.

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Is an auction right for you?

In places like Melbourne and Sydney auction volumes are much higher and buyers are therefore more likely to respond to an auction than a private sale.

“Right now the markets achieving the strongest clearance rates are all in Sydney and Melbourne. This also reflects the strong performance of the housing market in these areas,” says Conisbee.

“The suburbs in Melbourne with the highest clearance rates were the middle and outer suburbs of Bellfield, Croydon South, Viewbank and Scoresby. In Sydney, inner suburbs tended to see the highest clearance rates with Millers Point, Balmain East, Bondi Junction and Ultimo.” http://www.realestate.com.au/blog/best-time-by-australian-city-to-sell-your-property/

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Property, Stock and Business Agents Regulation 2003 The Regulations impose the following with regard to a bidders record state: 15 Making the Bidders Record (1) The Bidders Record for an auction of property that is made and kept for the purposes of section 68 of the Act must: (a) be in the English language, and (b) record the date and place of the auction, and (c) record the address of the property, and (d) record the name and licence number of the auctioneer conducting the auction, and (e) record the name of the owner of the property at the time of the auction, and (f) record the name and licence number of the selling agent for the auction, and (g) if the property is sold at the auction, indicate which of the persons named in the Bidders Record is the successful bidder and the sale price, and (h) if the property is not sold at the auction, record the highest bid accepted, and the vendor bid (if any), at the auction.

Note. A Bidders Record made by a licensee is one of the licensee’s records for the purposes of Part 8 (Records) of the Act and is to be kept by the licensee. There are no restrictions on the technology that can be used to make and keep a Bidders Record. A Bidders Record can be made and kept on paper or by electronic means.

(2) If a person who is registering to bid on behalf of another person will be bidding for the other person as a buyer’s agent: (a) the Bidders Record must also record the agent’s licence number, and (b) the Bidders Record may record the address of the agent’s registered office as the agent’s address.

(3) If a person is registering to bid on behalf of a body corporate: (a) there is an exemption from the requirement under section 68 (2) of the Act that the relevant details of the person bidding include the number or other identifier of proof of identity of the body corporate as referred to in section 68 (2) (b) of the Act, and (b) there is an exemption from the requirement under section 69 (1) (b) of the Act that the letter of authority to bid on behalf of a body corporate specify the number or other identifier of proof of identity for the body corporate if the letter of authority specifies the Australian Business Number of the body corporate.

(4) If a person who is registering to bid on behalf of another person will be bidding for the other person under a power of attorney, there is an exemption from the requirement under section 68 (2) of the Act that the relevant details of the person bidding include details of the other person as specified in section 68 (2) (b) of the Act. (5) If a person who is registering to bid on behalf of another person will be bidding in the capacity of a buyer’s agent, there is an exemption from section 69 (1) (b) of the Act if details of the person on whose behalf the agent is to bid are established by the production of a copy of the agency agreement pursuant to which the agent will be bidding.

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(6) An entry in a Bidders Record may only be made by the agent who makes the Bidders Record or by an employee of that agent acting on behalf of the agent. An agent who makes a Bidders Record must not permit a person to make an entry in the Bidders Record unless the person is authorised by this subclause to make the entry.

Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units in any other case.

(7) If more than one property is to be offered for sale at an auction sale, a single Bidders Record may be made so as to apply to more than one (or all) of the properties to be offered so that the required details of a person who will be entitled to bid at the auction of any of the properties concerned need only be entered in the Bidders Record once, but without otherwise affecting the requirement for the separate recording in respect of each of those properties of the details required by subclauses (1) and (2).

Note. When an auction involves a number of properties and a number of different licensees, subclause (7) gives the licensees concerned the option of each making their own Bidders Record for the properties they are auctioning or relying on a single Bidders Record made by or on behalf of the auctioneer for all of the properties to be auctioned.

16 Keeping the Bidders Record (1) A licensee who acts on the sale of property that is offered for sale by auction must make and keep as part of the records that the licensee is required to make by section 104 of the Act in respect of the sale a record of the name, business address and licence number of the licensee who made the Bidders Record for the auction.

Note. The licensee who makes a Bidders Record is responsible for keeping it.

(2) A licensee who keeps a Bidders Record in electronic form must also keep, as part of the licensee’s records with respect to auction sales to which the Bidders Record relates, a record of such details as will enable the Bidders Record to be located and accessed in the electronic records of the licensee.

17 Proof of identity for Bidders Record (1) Any of the following forms of proof of identity may be used for a person for the purposes of an entry in a Bidders Record: (a) a card or document that is issued by the government or a statutory authority of New South Wales, the Commonwealth, another State or a Territory, or by an authorised deposit-taking institution, and shows the name and address of the person, (b) a combination of cards or documents: (i) that show the name and address of the person, and (ii) one of which is issued by the government or a statutory authority of New South Wales, the Commonwealth, another State or a Territory, or by an authorised deposittaking institution,

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(c) a card or document that is issued by the government or a statutory authority of New South Wales, the Commonwealth, another State or a Territory, or by an authorised deposit-taking institution and that shows the name of the person, together with a statutory declaration by the person as to the person’s address, (d) a passport issued by another country that shows the person’s name, together with: (i) a card or document that is issued by an organisation or person other than the person concerned and that shows the person’s address, or (ii) a statutory declaration by the person as to the person’s address, (e) a motor vehicle driver’s licence issued in another country that shows the person’s name, together with: (i) a card or document that is issued by an organisation or person other than the person concerned and that shows the person’s address, or (ii) a statutory declaration by the person as to the person’s address.

(2) If the relevant details of a person are entered in the Bidders Record for an auction of property before the day of the auction or otherwise than at the place the auction is held, the person must not be provided with the identifying number allocated for the purposes of identification at the auction unless the person’s identity is established by means of proof of identity that may be used for the purposes of any entry in the Bidders Record under section 69 of the Act. (3) An agent or employee of an agent who provides an identifying number to a person in contravention of subclause (2) is guilty of an offence.

Maximum penalty: 20 penalty units.

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Price Guides Sections 72 and 73 state that an agent cannot falsely represent their estimate of selling price to the seller or prospective seller, they cannot falsely represent their estimate of selling price to a prospective purchaser either. The legislation is specific in this area due to the practice of agents drawing prospective buyers to attend auctions by quoting low estimates of selling price when the property actually sold for substantially more at the auction.

The reasons for drawing prospective buyers to attend the auction is to swell the crowd to create an impression of much interest in the property and the hope that the prospective purchaser has deeper pockets and more money than they had indicated to the agent. The other angle here is that due to the pressure of competition, a bidder may go well beyond their limit.

Therefore, an agent quoting likely selling prices at auction should quote the same estimated price or range as they have written in the Sales Inspection Report that they provided to their principal at the time of listing the property. Section 73 of the Act deals with false representations to buyers. An agent must not falsely understate the estimated selling price of the property to prospective buyers.

72 False representation to seller or prospective seller A real estate agent or employee of a real estate agent must not make a false representation to a seller or prospective seller of residential property as to the agent’s or employee’s true estimate of the selling price of the property.

Maximum penalty: 200 penalty units.

73 False representation to prospective buyer (1) A real estate agent acting pursuant to an agency agreement for the sale of residential property or the employee of such an agent must not, by a statement made in the course of marketing the property, falsely understate the estimated selling price of the property.

Maximum penalty: 200 penalty units.

(2) An agent or employee is considered to falsely understate the estimated selling price of residential property if the agent or employee states as his or her estimate of that selling price a price that is less than his or her true estimate of that selling price.

(3) A statement is considered to be made in the course of marketing residential property if the statement is made: (a) in an advertisement in respect of the property that is published or caused to be published by the agent, or (b) to a person (orally or in writing) as a prospective purchaser of the property.

(4) A statement in the agency agreement of the agent’s estimate of the selling price of residential property is evidence for the purposes of this section of the agent’s true estimate of that selling price.

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An agent can be investigated by the Office of Fair Trading to justify their estimate of price as quoted to a buyer or seller to ensure they are adhering to the Act. Your agency agreement is taken to be evidence of your estimate, so take this into account when talking to anybody about expected prices.

As mentioned previously in this unit, the agent engaged to act in respect of a sale by auction must take all reasonable steps to ensure that a person who bids at auction has been provided with a copy of the consumer education guide currently approved by the Office of Fair Trading, known as “The Bidders Guide�.

The current guide can be obtained by visiting: www.fairtrading.nsw.gov.au You should ensure you have the up to date guide available.

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ELEMENT 4 - IMPLEMENT AUCTION DAY PROCEDURES 4.1 4.2 4.3 4.4 4.5

Auction area is prepared, including deployment of staff, and promotional materials and equipment consistent with agency practice.

Auction documentation is prominently displayed consistent with agency practice and relevant legislation.

Property inspection is facilitated on auction day prior to the commencement of the auction.

Questions from interested parties are answered or referred to informed sources in line with agency practice and ethical standards.

Auction day procedures are implemented in line with agency practice and legislative requirements.

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Standard Conditions for Auctions The Standard Conditions for auctions MUST be displayed before and during the auction. They are: 1.

2.

(a)

The principal's reserve price must be given in writing to the auctioneer before the auction commences.

(b)

A bid for the seller cannot be made unless the auctioneer has, before the commencement of the auction, announced clearly and precisely the number of bids that may be made by or on behalf of the seller

(c)

The highest bidder is the purchaser subject to any reserve price.

(d)

In the event of a disputed bid, the auctioneer is the sole arbitrator and the auctioneer's decision is final.

(e)

The auctioneer may refuse to accept any bid that, in the auctioneer's opinion, is not in the best interest of the seller.

(f)

A bidder is taken to be the principal unless before bidding, the bidder has given to the auctioneer a copy of a written authority to bid for and on behalf of another person.

(g)

A bid cannot be made or accepted after the fall of the hammer.

(h)

as soon as practical after the fall of the hammer the purchaser is to sign the agreement (if any) for sale.

(a)

All bidders must be registered in the Bidders Record and display an identifying number when making a bid.

(b)

One bid only may be made by or on behalf of the seller.

This includes a bid made by the auctioneer on behalf of the seller.

(c)

When making a bid on behalf of the seller or accepting a bid made by or on behalf of the seller the auctioneer must clearly state that the bid was made by or on behalf of the seller or auctioneer.

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The following obligations are imposed by the Property, Stock and Business Agents Regulation 2003 18 Conditions of sale by auction (1) The following conditions are prescribed as applicable to and in respect of the sale by auction of land or livestock: (a) The principal’s reserve price must be given in writing to the auctioneer before the auction commences. (b) A bid for the seller cannot be made unless the auctioneer has, before the commencement of the auction, announced clearly and precisely the number of bids that may be made by or on behalf of the seller. (c) The highest bidder is the purchaser, subject to any reserve price. (d) In the event of a disputed bid, the auctioneer is the sole arbitrator and the auctioneer’s decision is final. (e) The auctioneer may refuse to accept any bid that, in the auctioneer’s opinion, is not in the best interests of the seller. (f) A bidder is taken to be a principal unless, before bidding, the bidder has given to the auctioneer a copy of a written authority to bid for or on behalf of another person. (g) A bid cannot be made or accepted after the fall of the hammer. (h) As soon as practicable after the fall of the hammer the purchaser is to sign the agreement (if any) for sale.

(2) The following conditions, in addition to those prescribed by subclause (1), are prescribed as applicable to and in respect of the sale by auction of residential property or rural land: (a) All bidders must be registered in the Bidders Record and display an identifying number when making a bid. (b) Subject to subclause (2A), the auctioneer may make only one vendor bid at an auction for the sale of residential property or rural land and no other vendor bid may be made by the auctioneer or any other person. (c) Immediately before making a vendor bid the auctioneer must announce that the bid is made on behalf of the seller or announce “vendor bid”.

(2A) The following conditions, in addition to those prescribed by subclauses (1) and (2), are prescribed as applicable to and in respect of the sale by auction of co-owned residential property or rural land or the sale of such land by a seller as executor or administrator: (a) More than one vendor bid may be made to purchase the interest of a co-owner. (b) A bid by or on behalf of an executor or administrator may be made to purchase in that capacity. (c) Before the commencement of the auction, the auctioneer must announce that bids to purchase the interest of another co-owner or to purchase as executor or administrator may be made by or on behalf of the seller. (d) Before the commencement of the auction, the auctioneer must announce the bidder registration number of any co-owner, executor or administrator or any person registered to bid on behalf of any co-owner, executor or administrator.

(3) The following condition, in addition to those prescribed by subclause (1), is prescribed as applicable to and in respect of the sale by auction of livestock:

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The purchaser of livestock must pay the stock and station agent who conducted the auction (or under whose immediate and direct supervision the auction was conducted) or the vendor the full amount of the purchase price: (a) if that amount can reasonably be determined immediately after the fall of the hammer—before the close of the next business day following the auction, or (b) if that amount cannot reasonably be determined immediately after the fall of the hammer—before the close of the next business day following determination of that amount, unless some other time for payment is specified in a written agreement between the purchaser and the agent or the purchaser and the vendor made before the fall of the hammer.

19 Notification of auction conditions (1) A stock and station agent or real estate agent who offers land or livestock for sale by auction must notify the conditions of the sale by means of a notice that: (a) sets out the conditions of the sale clearly and legibly written or printed in the English language, and (b) is exhibited in a conspicuous position so as to be clearly visible to, and available for inspection by, any person attending the auction before and during the auction.

(2) If a stock and station agent or real estate agent conducts an auction sale of land or livestock comprising more than one lot, or a stock and station salesperson conducts an auction sale of livestock comprising more than one lot, and one or more of the conditions of sale for any one or more of those lots are different from the conditions of sale for all or most of the other lots, the agent or salesperson concerned may notify the different conditions by reciting those conditions aloud in a clear and precise manner immediately before offering that lot for sale. Maximum penalty: 40 penalty units in the case

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Warnings about Bidders Obligations 1.

Penalty for collusive practices It is an offence under section 78 of the Property Stock and Business Agents Act 2002 for a person to do any of the following as a result of a collusive practice, or to induce or attempt to induce another person by a collusive practice to do any of the following: (a) To abstain from bidding, or (b) To bid to a limited extent only, or (c) To do any other act or thing that might prevent free and open competition at the auction.

78 Collusive practices at auction sales (1) A person must not, in relation to the sale by auction of any land or livestock, by a collusive practice induce or attempt to induce any other person: (a) to abstain from bidding generally, or (b) to abstain from bidding for any particular lot, or (c) to bid to a limited extent only, or (d) to do any other act or thing that might in any way prevent or tend to prevent free and open competition.

Maximum penalty: (a) 500 penalty units in the case of a corporation, or (b) 250 penalty units in any other case.

(2) A person must not as a result of a collusive practice, at a sale by auction of any land or livestock: (a) abstain or agree to abstain from bidding generally, or (b) abstain or agree to abstain from bidding for any particular lot, or (c) bid or agree to bid to a limited extent only, or (d) do or agree to do any other act or thing that might in any way prevent or tend to prevent free and open competition.

Maximum penalty: (a) 500 penalty units in the case of a corporation, or (b) 250 penalty units in any other case.

(3) An auctioneer must not sell by auction any land or livestock unless notice is given prior to the auction, in such manner and in such terms as may be prescribed by the regulations, of the material parts of this section.

Maximum penalty: 20 penalty units.

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(4) In this section: collusive practice means a promise, express or implied, made by a person that if the person is the successful bidder at auction for land or livestock: (a) the person will give the person to whom the promise is made the right to elect to take over as purchaser through the auctioneer all or any of the land or livestock at the auction price, or (b) the ownership of all or any of the land or livestock will be determined by tossing or the drawing of lots or any other method.

2.

Successful bidders The actual successful bidder at an auction sale must give the auctioneers or an employee of the auctioneer: (a) The bidders name, or (b) The name of the person on whose behalf the successful bid was made.

These obligations are to be found in the Property, Stock and Business Agents Regulation 2003: 20 Warnings about bidders’ obligations (1) The notice required to be given by section 78 (3) of the Act is to be in the following form: Penalty for collusive practices It is an offence against the Property, Stock and Business Agents Act 2002 for a person to do any of the following as a result of a collusive practice, or to induce or attempt to induce another person by a collusive practice to do any of the following: (a) to abstain from bidding, or (b) to bid to a limited extent only, or (c) to do any other act or thing that might prevent free and open competition.

Severe penalties may be imposed on persons convicted of collusive practices.

(2) The notice required to be given by section 83 (2) of the Act is to be in the following form:

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Successful bidders The actual successful bidder at an auction sale must give to the auctioneer or an employee of the auctioneer: (a) the bidder’s name, or (b) the name of the person on whose behalf the successful bid was made.

(2A) The notice required to be given by section 66 (4) of the Act is to be in the following form: Penalty for dummy bidding It is an offence against the Property, Stock and Business Agents Act 2002 for a person to do any of the following: (a) make a bid as the seller, (b) make a bid on behalf of the seller (unless the person is the auctioneer), (c) procure another person to make a bid on behalf of the seller.

Any bid made with the dominant purpose of benefiting the seller constitutes a bid made on behalf of the seller.

A bid may be found to be a bid made on behalf of the seller even though the seller did not: (a) request the bid, or (b) have any knowledge of the bid.

Severe penalties may be imposed on persons convicted of dummy bidding.

(3) Each notice must: (a) have its contents clearly and legibly written or printed in the English language, and (b) be exhibited in a conspicuous position so as to be clearly visible to, and available for inspection by, any person attending the auction before and during the auction.

Note. A notice under this clause may be combined with the notice of auction conditions

Documentation The auction agency agreement is subject to the same regulation as all agency agreements and you must provide the vendor with a copy of the approved guide for agency agreements, not more than 1 month before the agreement is signed.

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Marketing statements about vendor bids when property passed in Section 76A makes it an offence for an agent (or agent’s employee) when marketing residential property or rural land after it is passed in at auction and where the last bid was the vendor’s bid, not to state that the amount of the last bid accepted at the auction was a vendor bid.

76A Marketing statements about vendor bids when property passed in (1) When residential property or rural land is passed in at auction and the last bid accepted at the auction was a vendor bid, a real estate agent or stock and station agent, or an employee of such an agent, must not, by a statement made in the course of marketing the residential property or rural land, indicate the amount of the last bid accepted at the auction unless the statement also clearly indicates that the bid was a vendor bid.

Maximum penalty: 200 penalty units.

(2) A statement is considered to be made by a person in the course of marketing residential property or rural land if the statement is made: (a) in an advertisement in respect of the property or land that is published or caused to be published by the person, or (b) to a person (orally or in writing) as a prospective purchaser of the property or land.

(3) It is a defence to a prosecution for a contravention of this section if the defendant satisfies the court that the defendant did not know and had no reasonable cause to suspect that the bid concerned was a vendor bid.

(4) Residential property or rural land is passed in at auction if the auction is stopped without the property or land being sold at the auction.

(5) In this section: vendor bid means a bid made by the auctioneer on behalf of the seller

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ELEMENT 5 - COMPLETE FOLLOW-UP PROCEDURES AFTER AUCTION SALE 5.1 5.2 5.3 5.4 5.5

5.6

Follow-up procedures are implemented if property is sold in line with agency practice, ethical standards and legislative requirements.

Sales documentation is accurately completed in line with agency practice and legislative requirements.

Follow-up procedures are implemented if property is passed in consistent with agency practice, ethical standards and legislative requirements.

Accurate sales data is compiled that reflects auction outcomes for use in follow-up procedures.

Appropriate records of attendance or interest are compiled to expand agency contact lists of potential clients identified through the auction process.

Publication of auction results and post-auction information is arranged in line with agency practice and legislative requirements

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Contract for the Sale of Land If the auction is successful then, as auctioneer or agent, you may be required to complete and exchange contracts on the spot. As sales agents you represent your client, the principal. It is your responsibility to ensure the legal practitioner has correctly prepared the contract on behalf of the principal.

The usual particulars, such as the following, need to be correctly recorded: *

The vendor’s name *

The purchaser’s name

*

Particulars of respective legal practitioners

*

Vendor’s agent

*

Deposit

*

Stakeholder

*

Description of property and improvements

*

Settlement date

*

Inclusions

*

Date of contract (exchange date)

The Vendor Disclosure and Warranty regulations require other documents to be attached to the contract. These are: *

A copy of the Register Folio issued by the Land Titles Office (Title Search)

*

A copy of the plan of sub-division (Deposited Plan [DP])

*

A copy of the Strata Plan (if Strata Titled)

*

Copies of easements or covenants affecting the land

*

A 149 Certificate (zoning certificate from local council)

*

A sewage or drainage diagram

Legislation also stipulates that the vendor provide other prescribed warranties as to any affectations that do or do not affect the property. These include: *

Breaches of the Public Health Act

*

Any notice from local council regarding illegal building work on the property

*

Any encroachments on adjoining properties

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*

Any proposal from any Government Authority that may have an effect on the property

It is essential that the sales agent know what is contained in the contract and, where possible, has confirmed its accuracy. This includes confirming any furnishings, fittings and fixtures that are included or excluded, and that the documentation attached is consistent with the property as currently offered for sale. The sales agent must be diligent in ensuring that all photocopies of the contract are identical to the original.

There have been legal cases where problems have occurred due to incorrect or incomplete copies of contracts being relied upon by prospective purchasers. EVERY copy of the contract issued MUST be identical and, of course, correct as prepared by the vendors legal representative.

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ELEMENT 6 - CONDUCT AUCTION 1.1

1.2 1.3 1.4 1.5 1.6

1.7

Implementation of auction day procedures is confirmed to ensure that auction is conducted in a manner that is consistent with agency practice, ethical standards and legislative requirements.

Auction arrangements are confirmed in briefing with selling agent in line with agency practice.

Auction process is professionally conducted to establish the optimum price possible for the property from the buyers in attendance.

Appropriate communication and presentation skills are used in conducting the auction.

Price movements are monitored during the auction process.

Questions from bidders and others engaged in the auction are answered honestly in line with agency practice, ethical standards and legislative requirements.

Auction is conducted in a manner consistent with agency practice, ethical standards and legislative requirements

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What happens on auction day?

By the time auction day arrives you should have some important things prepared.

But how will things run on the big day itself?

Step-by-step guide to auction day • The property is usually opened for one final inspection just before the auction is scheduled to start. This is your last chance to check the property, the contract and auction rules before committing to bidding • If you decide to bid, then depending on what state you are in, you may need to register if you haven’t already, and be provided with a registration number • After describing the property and announcing a series of required legal disclosures about the auction, the auctioneer usually kicks things off by inviting bids. If no buyer offers one, the auctioneer will usually suggest one as a starting point • The auctioneer is entitled to make one bid on behalf of the seller, known as a ‘vendor bid’, provided they clearly announce when they’re doing so • Once bids hit or pass the reserve price – the minimum price for which they’re prepared to sell – the auctioneer should then declare that ‘the property is on the market’. Any subsequent bid is itself a legally binding offer on the property • After a few seconds (or minutes) of bidding and counter-bidding, potential buyers may no longer be prepared to offer higher bids. Here, the auctioneer will announce the most recent bid followed by ‘Going once…’ At this point existing bidders may jump back in or new bidders may bid, in which case the auction process recommences • When the final bid is reached and the seller is happy with the price, the auctioneer will announce “Going once, twice, three times…” and if no more bids are offered the auctioneer will then bang the hammer, yell ‘Sold!’ and specify the successful bidder in the crowd. The auctioneer cannot accept any bid after the ‘fall of the hammer’ • The successful bidder will then be taken into the property (assuming the auction has been held outside) for the next stage of property purchase – exchanging contracts What happens if the reserve price isn’t reached?

If the highest bid is below the reserve price then the property is ‘passed in’, meaning it’s no longer subject to auction. The vendor’s agent may then try negotiating a sale post-passing in with interested bidders. The bidder who put in the highest unaccepted bid usually has first right of negotiation.

Know your limit It’s easy to get caught up in the excitement and suspense of an auction, so it’s important to set and stick to your maximum limit so that you don’t end up overextending yourself financially. https://www.commbank.com.au/home-buying/education-content/now-you-ve-decided-tobuy/what-happens-on-auction-day-.html

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Buying property that's been passed in at auction What does it mean for you as a buyer if the property you're interested in is “passed in” at auction?

‘Passed in’ explained A property is passed in when the bidding at an auction does not reach the vendor’s reserve (the minimum price for which they’re prepared to sell).

In most states, if this happens then the first right to negotiate further with the vendor goes to the person who placed the highest bid during the auction. If this is you, then the vendor’s agent will likely take you aside once the bidding has finished and the property has been passed in so you can negotiate in private.

Your first step should be to ascertain the reserve price from the agent. They may refuse to disclose this, in which case it’s probably best not to deviate from the highest bid you made during the auction.

If, however, the agent does disclose the reserve, you’ll only maintain your exclusive first rights to negotiate if you’re prepared to at least match the reserve with your offer. If you don’t, the agent is free to negotiate with other interested buyers (though if none exist, the ball is back in your court).

Provided you’ve done your research prior to auction day you should have a solid understanding of the true value of a property given the current market conditions.

What happens if your offer is accepted?

If you do make an offer on a passed-in property on the same day as the unsuccessful auction, and it’s accepted and actioned – ie contracts are exchanged that day – the cooling-off period still does not apply, as per the usual conditions for auction.

You’ll also need to be able to pay your deposit on that day too, just as you would if you’d successfully bid at auction.

What happens if your offer is not accepted?

If the vendor does not accept your offer on the day of the auction after it’s passed in, they’ll likely re-list the property for sale, typically for a higher price than the reserve.

At this point all auction conditions are off the table and private sale treaty terms and conditions apply. You’re free to continue negotiating with the vendor and their agent, but at this point you’re not in any unique situation (other than of course now being known to both the agent and vendor). Get confidence buying property https://www.commbank.com.au/home-buying/education-content/now-you-ve-decided-tobuy/buying-property-that-s-been-passed-in-at-auction.html

How to make an offer on a property Making an offer is one of the final steps towards owning your first home or investment property. It may seem complicated, but once you understand what’s involved, you’ll feel more confident about negotiating the best price for your new home.

The process can vary between states and territories, but usually involves the following steps.

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Review the contract The vendor (or seller) must have a contract of sale prepared and available for inspection before offering a property for sale. The contract usually includes: • A zoning certificate from the local council • A copy of the title to the property as recorded in the Land Titles Office • Copies of documents outlining other registered interests over the property.

After several inspections of the property and discussions with the real estate agent or vendor, you can ask for a copy of the contract and review it with your conveyancer or solicitor to ensure it’s acceptable.

Make an offer Next, put your offer in writing to the real estate agent. This should include how much you’re willing to pay, any conditions such as repairs or deposit amount and a timeframe for moving in. Your solicitor or conveyancer will help you prepare a letter of offer for the property you want to purchase.

Start negotiations Your expression of interest will be passed onto the vendor and they will respond, kick-starting the negotiation process. You may be required to pay a holding deposit at this stage, to prove your offer is serious.

The vendor can receive expressions of interest from other people and even exchange contracts with them if they can get a better deal. If this happens, your holding deposit is refundable. Asking if anyone else has made an offer on the property can help assist with your negotiations.

Exchange contracts Once you have agreed on a price with the vendor, you will need to exchange contracts and pay the full deposit, which is usually 10% of the purchase price. Your home lender and solicitor or conveyancer will support you through this process.

You should also arrange for home insurance at this time, as you’re the owner of the property from the date contracts are exchanged. Your contents insurance can begin from the time you move in.

Cooling-off period In most states, there is usually a cooling-off period after contracts are exchanged, unless you’ve bought a residential property at auction. During the cooling-off period, you can cancel the contract but you may lose your deposit. It’s important to check with your solicitor or conveyancer about whether a cooling-off period applies to your contact before you sign.

You should also check the property during this time to make sure the condition of the building and inclusions are as per the contract.

Settlement Settlement time is determined by the vendor but can be negotiated. Usually it’s around four to six weeks. This is when you pay the balance of the property using your home loan, including stamp duty. You’ll then receive the keys and title deed to your new home. Happy days! https://www.commbank.com.au/home-buying/education-content/making-an-offer/how-to-makean-offer-on-a-property.html

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How much should you pay for the property?

Working out exactly how much to offer on a property can be one of the most daunting tasks in the home buying journey. But by taking the following steps you should be in a position to make a competitive offer with confidence.

Learn about the market No matter what the advertised sales price may be, it’s the recent sales of comparable properties that should give you the best idea of a property’s ‘fair market value’ – a solid ballpark of what it’s truly worth.

And ‘comparable properties’ doesn’t just mean other apartments in the same suburb – it should be an apartment with the same number of bedrooms, bathrooms, parking spaces and features (for example air conditioning), in similar condition in a similar complex and with a similar total floor space.

Learn about the property A home lending specialist can often help you find out how long the property you are interested in has been on the market. If it has been sitting unsold at a certain price for many weeks that may be an indication it’s overpriced – particularly if properties in that suburb are typically listed for a much shorter time before being sold.

You could also check for ‘vendor discount’ trends in the suburb you are buying in – this tells you whether and by what percentage the average vendor has cut the original listed price of a property in order to make a sale.

Learn about the vendor It’s not unusual for prospective buyers to ask the real estate agent why the current owners are selling the property.

This is because if, for example, the vendor is selling on behalf of the property’s owner who has passed away (what’s known as a ‘deceased estate’), then maximising the sale price won’t necessarily be the vendor’s top priority. In cases like this, you may then be able to snap up the property for less if you are willing to offer a shorter settlement than usual.

Know what you can afford Make sure any offer you make isn’t above an upper limit you’ve set yourself. This means your offer should not be more than that for which your home loan has been conditionally approved, and should also take into account both your upfront and ongoing property costs, which can vary.

You should also be prepared to negotiate. Be conscious that even if you are not willing to offer more money for a property, you may still be able to negotiate on conditions of the sale, such as settlement period, if you are able to be flexible with this.

Know your competition Ask the real estate agent if any other interested buyers have put in offers, and if so for how much. Keep in mind that some agents may prefer not to disclose other offers but it may be worth asking to try and gauge the level of interest. It’s not uncommon to see properties listed with ‘offers above ($X)’ as the sale price. Under both federal and state laws, real estate agents must not falsely represent the price at which the vendor is willing to sell the property. https://www.commbank.com.au/home-buying/education-content/making-an-offer/how-muchshould-you-offer-on-a-property-.html

How much should you offer on a property?

Working out exactly how much to offer on a property can be one of the most daunting tasks in the home buying journey. But by taking the following steps you should be in a position to make a competitive offer with confidence.

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Learn about the market No matter what the advertised sales price may be, it’s the recent sales of comparable properties that should give you the best idea of a property’s ‘fair market value’ – a solid ballpark of what it’s truly worth.

And ‘comparable properties’ doesn’t just mean other apartments in the same suburb – it should be an apartment with the same number of bedrooms, bathrooms, parking spaces and features (for example air conditioning), in similar condition in a similar complex and with a similar total floor space.

Learn about the property A home lending specialist can often help you find out how long the property you are interested in has been on the market. If it has been sitting unsold at a certain price for many weeks that may be an indication it’s overpriced – particularly if properties in that suburb are typically listed for a much shorter time before being sold.

You could also check for ‘vendor discount’ trends in the suburb you are buying in – this tells you whether and by what percentage the average vendor has cut the original listed price of a property in order to make a sale.

Learn about the vendor It’s not unusual for prospective buyers to ask the real estate agent why the current owners are selling the property.

This is because if, for example, the vendor is selling on behalf of the property’s owner who has passed away (what’s known as a ‘deceased estate’), then maximising the sale price won’t necessarily be the vendor’s top priority. In cases like this, you may then be able to snap up the property for less if you are willing to offer a shorter settlement than usual.

Know what you can afford Make sure any offer you make isn’t above an upper limit you’ve set yourself. This means your offer should not be more than that for which your home loan has been conditionally approved, and should also take into account both your upfront and ongoing property costs, which can vary.

You should also be prepared to negotiate. Be conscious that even if you are not willing to offer more money for a property, you may still be able to negotiate on conditions of the sale, such as settlement period, if you are able to be flexible with this.

Know your competition Ask the real estate agent if any other interested buyers have put in offers, and if so for how much. Keep in mind that some agents may prefer not to disclose other offers but it may be worth asking to try and gauge the level of interest.

It’s not uncommon to see properties listed with ‘offers above ($X)’ as the sale price.

Under both federal and state laws, real estate agents must not falsely represent the price at which the vendor is willing to sell the property.

Paying a holding deposit on a property Paying a holding deposit or an amount as an ‘expression of interest’ can be an effective way of showing a vendor that you’re serious about buying their property.

What does paying a holding deposit involve?

In a private treaty sale, after a potential buyer has made a verbal offer on a property that the vendor verbally accepts, the vendor’s real estate agent may ask you to pay a holding deposit which may be a few hundred dollars.

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Paying this holding deposit can confirm you’re a serious buyer, but it will not secure the property for you. This only happens once the contracts of sale have been exchanged, the cooling-off period has passed andsettlement is reached.

What is gazumping?

Say you pay a holding deposit to a vendor after they’ve verbally accepted your offer on their property. But after you’ve done this, and before contracts are exchanged, the vendor’s agent informs you that the vendor has accepted a higher offer.

This is known as ‘gazumping’. It can be very frustrating for buyers but is not illegal, even if you’ve made your offer in writing. In fact, an agent is legally obliged to pass on any further offers received for the property to the vendor right up until the exchange of contracts, which usually involves payment of your full deposit.

Is a holding deposit compulsory?

A holding deposit is not compulsory and should not be treated as an additional upfront cost. Should your offer be accepted and contracts exchanged, the holding deposit can then be deducted from the full deposit you pay on the property.

Is a holding deposit refundable?

Yes, the holding deposit is fully refundable. Make sure when you pay it that you get a written receipt from the agent confirming they’ve received your holding deposit, as well as written confirmation that they’ll refund it to you within a specified timeframe should the vendor accept a higher offer.

Keep in mind, however, that if you do happen to be gazumped, while your holding deposit will be refundable, any other money you’ve spent as a result of having your offer verbally accepted – on legal fees, loan applications and building and pest inspections, for example – will not.

You’ll likely lose any holding deposit you’ve paid if you withdraw from the sale during the cooling-off period. https://www.commbank.com.au/home-buying/education-content/making-an-offer/how-muchshould-you-offer-on-a-property-.html

How does a real estate auction work?

It’s natural that auction day can cause some anxiety. You can minimise stress by understanding the auction procedure.

Here’s how the day’s proceedings will unfold: Before auction day: An auction can happen very fast – so it’s really important you and your agent are clear and agreed on the process of your auction day. Things like your reserve price and whether you will be making vendor bids through your agent are critical and have legal implications. Don’t be afraid to ask questions.

Rules of engagement: At least 30 minutes before the auction, your agent is required by law to display documentation regarding the property. As the auctioneer begins he/she will make an announcement detailing the information: the state laws applying to auctions in general; the rules applying to this particular auction, including whether vendor bids and/or co-owner bids will be used. Auction laws may vary from state to state so discuss the legal requirements with your agent.

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Opening bids: The auctioneer will then ask for an opening bid, setting an amount by which all bids must rise, such as in $5,000 increments. Alternative amounts can be bid – such as $1,000 – however it is up to the auctioneer’s discretion if the amount is accepted.

Going once: Once the reserve price has been reached the property is considered to be ‘on the market’ and will be sold to the highest bidder. If the reserve price isn’t reached the auctioneer will privately ask the seller if they wish to sell at a lower price. When the final bid is reached and the seller is happy with the price, the auctioneer will announce “going once, twice, three times…” and if no more bids are offered he will then call, “SOLD”.

Show me the money: An immediate deposit – usually 10% of the purchase price – is required after the auction. The balance is paid on settlement, normally set by the seller at 30, 60 or 90 days. It’s important to note that being flexible with the length of settlement to suit your buyer can help sell the property. The sale is finalised when the contract has been signed by both seller and buyer and all relevant cheques and transfers have been made. Once this has been completed and the balance of the purchase price paid, the property is officially considered sold. http://sellingguide.realestate.com.au/presentation/on-auction-day/

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AUCTION CHECKLIST SAMPLE PRIOR TO AUCTION Talk to the vendor about the bidders registration requirements: • confidentiality of the register • one vendor bid only Talk to the prospective purchasers about the registration requirements: • hand them pre-registration forms (optional) • proof of identification • confidentiality • OFT Bidder’s Guide • check to see if they will be bidding on auction day, or if they will be nominating someone to bid on their behalf • if someone else is bidding for them, a letter of authority is required • telephone bidding Nominate agent who will take the registrations, if a multiple auction Nominate and authorise ‘responsible’ agent to keep the record, if a multiple auction Pre-registration forms in office (optional) Pre-registration forms at open house (optional)

BEFORE AND AT AUCTION Agent must ensure record is kept CONFIDENTIAL Do not leave bidders record or bidders registration forms unattended

Hand out OFT Bidders Guide

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SIGNAGE AT AUCTION

Bidders Registration sign Prescribed Conditions of Sale Warning Notices Take bidders record and pens/pencils Set up bidders registration table and/or identify agent taking registration Bidders record – pre-registrations and blank forms

AUCTIONEER Comply with Prescribed Conditions of Sale Reserve price to be received in writing before auction commences If the vendor or a person on their behalf is making a bid for the vendor, announce that it is a vendor’s bid when the bid is made Only take bids from registered bidders All bidders must display their registration number when making a bid Have agent available with clipboard to take new registrations from the floor Bidders register must be kept for at least three (3) years This checklist should not be used without a full understanding of the legal requirements and should be used in reference to the Property, Stock and Business Agents Act 2002 (NSW) and the Regulation.

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The Auction The agent's role is to ensure the prospective purchasers attend the auction on the day and to encourage them during the bidding. Agents may even offer to pick up prospective purchasers and drive them to the auction to ensure their attendance.

The agent and fellow staff (if necessary) will need to assist both prospective purchasers and your vendors during the auction itself. This may mean circulating between various bidders and the vendor to offer encouragement.

The auctioneer must be proficient with the legislation and conduct the auction according to the terms set out by the Property, Stock and Business Agents Act 2002 and Regulation 2003 and the Contract of Sale.

The auctioneer's role is to extract the best possible price from bidders and may use a mix of facts, figures and humour to do so. The auctioneer is the key "actor" in this play and they may have to put on a show to excite the crowd.

Sales agents are expected to attend and assist the auctioneer with spotting of the bids, the recording of bids, as well as offering assistance to the prospective purchasers. The auctioneer reads out the terms and conditions of sale by auction and the special conditions pertaining to the property. A copy of the contract is on display, together with the terms and conditions of sale by auction. It is the responsibility of all parties to ensure compliance with the act in this regard.

Attributes of a successful Auctioneer Leading, professional auctioneers will have the following attributes: •

Public speaking skills.

•

Thorough knowledge of the Property Stock and Business Agents Act 2002 and Regulation 2003.

•

Ability to think on their feet and to act quickly and decisively.

•

Good sense of humour.

•

Honesty and Integrity.

•

High-level communication skills.

•

Sound knowledge of the real estate market.

•

Ability to use a quick retort to questions.

•

Committed professional.

•

Solid command of language and speech.

•

Driver's licence.

•

Real estate or stock and station agent's licence.

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•

Ability to show empathy and relax people.

•

Ability to excite and control a crowd.

•

No fear of rejection

Auctioneers should not use the misleading term or announce that the "Property is on the Market. Experienced auctioneers avoid this term. This statement was designed to counteract the advice given to prospective purchasers not to bid until the property is announced as "on the market”. In other words, that the bidding has reached the reserve. The property is on the market when both the auction contract is available and agency agreement has been signed by relevant principals and agent from this moment on the property is for sale!

In the majority of auctions the sales agent should be aware of all prospective purchasers attending. These clients have inspected the property and have indicated their interest as previously discussed. Occasionally, an unpredictable buyer may have registered at the last minute to bid at the auction without having been introduced during the auction marketing campaign.

This type of bidder is more difficult to interpret to your vendor because you may not have been able to qualify them prior to the auction starting. Assisting them during the bidding process, along with all the other qualified registered bidders, is important though. The sales agent should make himself or herself available to speak with all the prospects and offer any assistance they require.

Once the auction has been successfully concluded, the sales agent will assist in the execution of the contracts for sale and receipting of the deposit. The particulars of the successful purchaser are to be recorded in the Bidders ‘Record and the sales agent should be left with a number of prospective purchasers who will require assistance in locating alternative properties.

These unsuccessful bidders have proven themselves to be qualified buyers and should not be neglected. A “sold by” sticker can now be attached to the signboard. A sale at auction is an unconditional exchange of contracts, thus excluding the opportunity for a cooling off period .The property is now sold, and off the market.

The next role for the sales agent is to assist all parties during the weeks leading up to settlement.

After the auction, the deposit must be banked into the office sales trust account. The contracts should also be immediately forwarded to the legal practitioners representing both parties. A sales advice or letter may accompany the contracts.

Communication doesn’t stop here. This is now the opportunity for the agent to make contact with all the leads they gained during the auction campaign. The sales agent has a list of prospective purchasers who have a more educated knowledge of market Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-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\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

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value and are poised to buy. This follow-up service is vital as some may have incurred expenses by initiating searches and are feeling disappointed in missing out on a purchase.

It is important to work hard at trying to match these buyers to a suitable property, thus maximising the opportunities available to the agent and the client. Be aware that there are several provisos to follow up with prospective purchasers. You cannot use the Bidder’s Record for this purpose as it may only be used as a bidders’ record and not for any other purpose. Details obtained at open houses can be used if the person agrees to this and has been given the opportunity to decline further contact.

The provisions of the Privacy Act 2000 apply.

The associated records of attendance, clearance rates and sold prices of auctioned properties are a valuable source of data for the competitive office. Those who utilise this market research will stay abreast of market forces and change. A database of potential clients for both listing and purchasing can be created, the active agent will now be making contact with these clients and the cycle continues!

Anti-money laundering and counter-terrorism financing (AML/CTF) laws Australia has implemented new anti-money laundering and counter-terrorism financing (AML/CTF) laws to meet international standards and to help protect businesses from being misused for money laundering and terrorism financing.

As a real estate agency provides certain services which may involve financial payments, you may be required to collect customer information. By collecting customer information you are helping to protect your business from being misused for the purpose of criminal activity.

What is money laundering and terrorism financing?

The goal of most criminal acts is to generate a profit. To enjoy their ill-gotten gains, criminals commonly seek to disguise the illegal source of those profits. Money laundering is the processing of criminal profits to disguise their illegal origin.

Terrorist groups also move funds to disguise their source, purpose and destination.

Terrorism financing includes the financing of terrorist acts, terrorists and terrorist organisations.

Both money laundering and terrorism financing are serious crimes.

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What are the new AML/CTF laws?

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) received Royal Assent on 12 December 2006 and forms part of a legislative package that will implement reforms to Australia's AML/CTF regulatory regime.

The reforms are a major step towards: •

•

bringing Australia into line with international standards, including standards set by the Financial Action Task Force (FATF), and https://www.legislation.gov.au/Details/C2016C00770 preventing and detecting money laundering and terrorism financing by meeting the needs of law enforcement agencies for targeted information about possible criminal activity and terrorism.

The AML/CTF Act covers the financial sector, gambling sector and bullion dealing and any other professionals or businesses that provide particular ‘designated services’.

The

AML/CTF Act imposes a number of obligations on businesses when they provide these designated services. These obligations include: • • • •

customer due diligence (identification, verification of identity and ongoing monitoring of transactions) reporting (suspicious matters, threshold transactions and international funds transfer instructions) record keeping, and establishing and maintaining the AML/CTF program

The Government has introduced new laws in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

The new laws require businesses that provide certain financial or gambling services, or those involved in bullion dealing, to: • • •

identify their customers before providing a service report certain transactions, and report suspicious matters

The Government is now working on the second tranche of reforms. The aim of these reforms is to extend regulatory obligations to specified transactions conducted by a range of businesses and professions, including dealers in precious metals and stones, lawyers, accountants, real estate agents and trust and company service providers.

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Why has new legislation been introduced?

The new laws were introduced to: • • •

bring Australia’s AML/CTF system into line with international standards reduce the risk of Australian businesses being misused for the purposes of money laundering or terrorism financing, and meet the needs of law enforcement agencies for targeted information about possible criminal activity and terrorism.

How is privacy to be protected?

Reporting entities and Australian Government agencies who collect personal information are subject to the Privacy Act 1988 (Privacy Act). The Privacy Act regulates the collection, use, disclosure, quality and security of personal information.

For more information on how your privacy will be protected, please contact the Office of the Privacy Commissioner on 1300 363 992 or visit www.privacy.gov.au/business/aml.

What are the new reporting obligations?

The AML/CTF Act imposes obligations on new reporting entities, including identification, verification and ongoing monitoring of customers; reporting suspicious matters and transactions above a set threshold; ensuring customer information accompanies international funds transfer instructions; and record keeping obligations.

The keystone of the regime is a requirement for a reporting entity to know its customer.

What is AUSTRAC? The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia’s AML/CTF regulator and financial intelligence unit.

AUSTRAC currently oversees compliance with the reporting requirements of the Financial Transaction Reports Act 1988 by certain financial service providers, the gambling industry and others.

AUSTRAC’s role is extended to regulate businesses who provide designated services covered under the AML/CTF Act. How is this different to existing identification and verification obligations under the Financial Transactions Reports Act 1988 (FTR Act)?

Under the FTR Act customers opening certain accounts with ‘cash dealers’ are required to provide identification under either the 100 point test, using documents such as a passport, drivers licence and utilities notice, or have their identify confirmed by an ‘acceptable referee’. Under the new legislation, businesses Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-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\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

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determine the appropriate level of required identification and verification subject to the money laundering and terrorism financing risk. The identification obligations are extended to a wider number of services than currently covered by the FTR Act. Under the new legislation, reporting entities also have to monitor customer transactions during their provision of the designated service. Reporting entities must monitor customer transactions with a view to identifying, mitigating and managing the risk that the provision of the designated service may involve or facilitate money laundering or terrorism financing.

Proposed definitions for insertion into Section 5 of the AML/CTF Act conveyancing service includes a service that, under the regulations, is taken to be incidental to a conveyancing service. real estate agency service has the meaning given by section ‌ .. Real estate agency service (1) This section sets out the 2 situations in which a person provides a real estate agency service to another person.

Service provided to vendor (2)

For the purposes of this Act, a person (the agent) provides a real estate agency service to another person (the vendor) if there is an agreement between the agent and the vendor, and:

(a)

the agreement provides for the agent to introduce, or arrange for the introduction of, a prospective purchaser of land of the vendor (whether or not the prospective purchaser is specified in the agreement); or

(b)

the agreement provides for the agent to negotiate with, induce, or attempt to induce, a third person (whether or not specified in the agreement) to: buy land off the vendor; or

(i) (ii)

enter into, or make or accept an offer to enter into, a contract to buy land off the vendor.

(3)

The agent begins to provide the service when the agent enters into the agreement.

Service provided to purchaser (4)

For the purposes of this Act, a person (the agent) provides a real estate agency service to another person (the purchaser) if there is an agreement between the agent and the purchaser, and:

(a)

the agreement provides for the agent to introduce, or arrange for the Introduction of, a prospective vendor of land (whether or not the prospective vendor is specified in the agreement); or

(b)

the agreement provides for the agent to negotiate with, induce, or attempt

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to induce, a third person (whether or not specified in the agreement) to: (i)

sell land to the purchaser; or

(ii)

enter into, or make or accept an offer to enter into, a contract to sell land to the purchaser.

(5)

The agent begins to provide the service when the agent enters into the agreement.

How can I find out more information?

For more information please visit AUSTRAC www.austrac.gov.au or call the AUSTRAC Help Desk on 1300 021 037 or e-mail help_desk@austrac.gov.au

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CONCLUSION

You now have completed the content and assessment for these two units CPPDSM4019A – Prepare for Auction and Complete Sale and CPPDSM4004A – Conduct Auction. This has provided an overview of preparing for an auction and the auction itself. This will assist you with an understanding of what is expected of you to be a responsible and ethical real estate practitioner.

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ACTS REGULATIONS AND FORMS No.1 Fact Sheet – Auction Laws No. 2 Fact Sheet – Bidders Guide No. 3 Fact Sheet – REIA Guidelines to the Trade Practices Act

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REIA Guidelines to the Trade Practices Act (TPA) Auctions Prepared in collaboration with the ACCC ACCC Statement of Concern The key for understanding the difference between legal and illegal bidding under the Trade Practices Act (TPA) s not one of vendor versus ‘dummy’ bidding, or bidding below versus above the reserve price, but rather whether other potential bidders are liable to be misled that a bid is genuine when it is not. Any bid that is not a genuine bid made by or on behalf of an intending purchaser is likely to mislead other bidders unless effective steps are taken to ensure that bidders are not misled. Full disclosure made to all prospective bidders both at the commencement of an auction and prior to each relevant bid would be such a step. In doing so, care must be taken to ensure that such disclosure is not rendered ineffective by it being disguised by the expressions used or by the way they are given. For example, expressions such as ‘the bid is with me’ that may not be understood by inexperienced bidders would not amount to effective disclosure.

Dummy bidding at auction involves an agent, or a person acting on the agent’s behalf, making bids on a property, on an undisclosed basis, as if they are genuinely interested in purchasing the property, in order to artificially inflate the price of the property. The ACCC considers all vendor bidding to be misleading unless fully disclosed both at the start of the auction and at the time of the bid. The ACCC is concerned that such practices may mislead genuine bidders for the property. The ACCC would be concerned about such conduct regardless of whether it was organised by agents, auctioneers or vendors.

REIA Guidelines Whilst there is no national statutory code of practice that applies to the regulation of auctions in the real estate industry, the TPA (and the Fair Trading Acts in each state and territory) will apply to any misleading or deceptive practice in the conduct of auctions. Further, some individual states in Australia have introduced regulations that apply to the conducting of auctions in those states, and some state Real Estate Institutes have introduced codes of practice for auctions. Real estate agents should ensure that those Acts, statutory regulations and any codes implemented by state Institutes are complied with at all times. In addition, the REIA provides the following guidelines with respect to the avoiding of misleading or deceptive conduct in relation to auctions: • Dummy bidding is fictitious or false bidding at an auction by non-genuine bidders in the audience with no real intention to buy the property. Such conduct is misleading or deceptive and shall not be engaged in by agents or auctioneers.

• When properly declared, vendor bidding is a legal and ethical process. Vendor bidding (the practice of counter-bids being made by or on behalf of a vendor to ensure a property reaches a reserve price at which it can be sold) that is not fully disclosed to bidders is also likely to mislead or deceive other bidders and thus contravene the TPA and other legislation. Consequently, the following procedures must be followed at all times.

• The fact that bids are being made by or on behalf of a vendor and the identity of the person making such bids must be announced by the auctioneer both at the commencement of the auction and contemporaneously with each such bid being made, and in a form and manner that will be understood by all potential bidders.

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• Where state law limits the number of vendor bids, the auctioneer shall announce prior to the commencement of bidding for a property the maximum number of bids which will or may be made during the auction by or on behalf of the vendor.

• Where state law makes no specific provisions, no agent or sales person engaged by an agent shall make or assist any other person in making a bid on behalf of the seller unless those bids have been identified in the manner referred to in these guidelines.

• No agent or auctioneer shall permit a bid to be made by or on behalf of a vendor at or in excess of the vendor’s reserve price. Further, if a property is being sold at auction without a reserve price being set by the vendor, no agent or auctioneer shall allow any bid to be made by or on behalf of a vendor.

• A real estate agent shall not provide a potential purchaser of a property to be sold by auction an estimate of the value of that property; or advice as to the amount that the vendor might be prepared to sell the property for; when the real estate agent is aware that the value or amount referred to by that real estate agent is less than the reserve price that the seller has set for that auction, unless instructed otherwise by the vendor.

Real Estate Institute of Australia 16 Thesiger Court I PO Box 234, Deakin ACT 2600 Phone 02 6282 4277 I Fax 02 6285 2444 www.reia.com.au I reia@reia.com.au

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DRAFT LETTER TO SET AUCTION RESERVE Date The Manager / Auctioneer Xxxxx Real Estate Xxxx Xxxxx NSW xxxx

Dear Manager/Auctioneer, AUCTION RESERVE PROPERTY: XXXX AUCTION DATE: XXXX I/We hereby set the reserve price of the above property at: $xxx in words xxxxxxx Should the auction bidding not reach the above figure, please refer to us/me for further instructions.

Yours faithfully,

__________________ VENDOR NAME(S)

_________________________________________________________ I/We above instruct the auctioneer to vary from our above reserve to: $_____________ Signature Vendor (s)

_______________________________________________________________________ XXXXX Real Estate BIDDER REGISTRATION NO.

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DRAFT Confidential AUCTION BIDDER REGISTRATION XXXX Real Estate Corp Licence No. xxxxxxx 1 xxxx St, xxxx NSW xxxx PROPERTY: AUCTION DATE: PROPERTY: VENDOR(S): AUCTION LOCATION: AUCTIONEE(S):

Licence: Licence: Licence: Licence:

SELLING AGENT(S)_:

BIDDER: FULL NAME: Licence.COR (if Agent) ADDREESS: PHONE: IDENTIFICATION DETAILS: PRINCIPAL:

NSW DRIVERS LICENCE NO:

(TO BE COMPLETED WHERE BIDDER IS BIDDING ON BEHALF OF ANOTHER PERSON OR

CORPORATION)

FULL NAME: ADDRESS: IDENTIFICATION DETAILS (ABN/ACN IF COMPANY)

AUTHORITY SIGHTED:

YES

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SAMPLE LETTER AUTHORITY TO BID LETTER

Date The Manager / Auctioneer Xxxxx Real Estate Xxxx Xxxxx NSW xxxx

TO WHOM IT MAY CONCERN

PROPERTY ADDRESS: AUCTION DATE:

I (we), (Insert client name) nominate (insert bidder’s name) to bid on (my/our) behalf at the above property address on above date.

If he/she is the successful bidder, I/we (insert client name) will sign the contract for sale and pay the deposit.

Attached to this document are copies of the required identification required to register and bid at the auction, for both myself and our nominee.

Yours faithfully,

CLIENT NAME(S)

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___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 94 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 95 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 96 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 97 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 98 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 99 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc

___________________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

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Doc ID: CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 100 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\9. CPPDSM4004A\CPPDM40004A-LG-SM-2016-XXXXX-ASTC_WRD-eLearning.doc