The Estate Agent, July 2014 by Real Estate Institute of Victoria

The journal of the real estate institute of victoria

reiv.com.au

Market update Investors all smiles caught in the web Net profits and losses

The Estate Agent July 2014

Going up

Median house prices hit new high

Great expectations

Young gun Sam Nokes is already reaping the rewards of his hard work

Rising Waters Robyn Waters at the top of her game

Spring into auction

Courses to help take charge of the entire sales process

In the spotlight Underquoting in the media

Kicking on

Former footy players target new goals

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Contents

12 ‘There will always be some men who regard you as subservient and expect you to serve the tea and coffee – take it in your stride and get them to serve it next time’ FIABCI world president Robyn Waters

Cover story FRENCH CONNECTION

From working a photocopier at a Coburg agency to the boardrooms of Paris, Robyn Waters has always kept one eye on the bigger picture

Features

Keys to a rapid rise Young gun Sam Nokes has moved up the property ladder fast. It’s all about knowing what you want

Former footy stars keen to make mark Social media is helping identical twins Ed and Nick Lower reach potential clients

Can I quote you on that? Underquoting is back in the headlines, but is it really as widespread as some people think?

Auctions speak louder than words Courses are available to help agents take charge of the entire sales process

Privacy Act: What you need to know With the risk of penalties of up to $1.7 million, it pays to be across recent changes to the Privacy Act

It’s how you say it, not what you say Body language is crucial to building rapport with potential clients

30 The Estate Agent ❘ July 2014

Contents

Regulars 5 President’s Report 7

CEO Report

10 Bulletin 16 Market Update 19 Technology 24 Member News 28 Training 32 Course Schedule 39 Events Calendar

41 Events 45 Lifestyle – Body Language 47 REIV Directory

41 43

EA The Estate Agent

Estate Agent is published for the Real Estate Institute of Victoria by LandEd Publishing.

The Estate Agent ❘ July 2014

Publisher REIV 335 Camberwell Rd, Camberwell, Victoria 3124 Editor Paul Bird pbird@reiv.com.au

Design and Production Pagemasters: Art Director Anita Belia Advertising Michelle Ross mross@reiv.com.au 9205 6601 Cover photograph Bill McAuley

The views and opinions expressed in articles and columns of Estate Agent are those of the writers and do not necessarily represent those of the Real Estate institute of Victoria or LandEd Publishing

President’s Report Neville Sanders President REIV

Are foreign investors really pricing out first-home buyers?

ictoria has the highest level of foreign investment in property in Australia and, over the past year, this investment has strengthened the state’s property market. So a parliamentary committee’s inquiry into foreign investment, underway at present, is of vital importance. In a submission to the inquiry, the Real Estate Institute of Australia (REIA) – which represents the REIV in Canberra – said foreign investors were not competing against “average” Australian investors and first-time buyers for homes; they are in a higher price bracket and there is no reason to change the existing policy. But while this policy was achieving the government’s aim of increasing housing supply, foreign investment could not solve Australia’s housing shortage, the REIA said. The Standing Committee on Economics’ inquiry into Australia’s foreign investment policy as it applies to residential real estate was initiated by Treasurer Joe Hockey in March. It followed suggestions that foreign investment in residential property was shutting out local buyers, in particular first-home buyers. The REIA submission, widely reported in the media, said the issue arose because Australia did not have enough houses: “Addressing housing supply would avoid any future questioning about impact of foreign investors in residential real estate,” it said. The committee, which received submissions by early May and had a public hearing later that month, is to report by October 10. It has been asked to consider the economic benefits of foreign investment in residential property and whether that investment is directly increasing the supply of

‘Addressing housing supply would avoid any future questioning about impact of foreign investors in residential real estate’ – REIA new housing and benefiting the local building industry and its suppliers. Its terms of reference also include how Australia’s foreign investment framework compares internationally and whether administration of the policy on foreign investment in residential property can be enhanced. The current rules require those without permanent residence to obtain prior approval to buy a home

in Australia. This is normally given for new units, townhouses and house-andland packages and for knockdownrebuild projects – that is, buying existing residences for redevelopment so long as this will increase housing supply. The REIA submission said that in 2012-13 real estate accounted for $51.9 billion of the $135.7 billion worth of foreign investment in Australia. China was the largest source country for investors with 11.4 per cent, ahead of Canada at 9.5 per cent. But it said this data took too long to be released – almost nine months after the close of the financial year – and called for a review. Continued on page 6

The Estate Agent ❘ July 2014

President’s Report

Continued from page 5

Detailed data made public sooner would help policy makers, it said. REIA said that in 2010 the Foreign Acquisitions and Takeovers Act 1975 was amended to provide wide-ranging powers for enforcement, as well as expanded monitoring and compliance. Despite this, since then there had not been any public evidence of significant non-compliance. REIA said it was not clear whether this was because foreign investors were law-abiding, the penalties discouraged non-compliance or there weren’t enough resources to monitor the rules. The reasons were unknown so a review of the effectiveness and appropriateness of these arrangements was needed. It noted that the maximum penalty for non-compliance with notification to acquire an interest in real estate is $85,000. It suggested this be changed to a fixed percentage of the price because, for a multimillion dollar purchase, this percentage was so small it might simply be considered part of the cost of doing business.

Signing in: Robyn Waters at the FIABCI 65th World Congress in May.

been reduced in 10 years – will save an estimated 39,000 employers $234 million over four years. The reduction will give Victoria the lowest payroll tax in Australia for payrolls of $4.7 million to $26.7 million. The Budget said while it expected

‘This is a momentous achievement for Robyn, but also for our industry, to which she has contributed enormously all her working life’ While this was underway in Canberra, the Victorian Government delivered its State Budget, also in May. This included two items of note for our industry: a payroll tax cut and details on the increased revenue flowing from the strong property sector. The government estimates its cut to payroll tax – which has not

The Estate Agent ❘ July 2014

government spending to grow at an average 2.6 per cent over the next four years, tax revenue would boom, rising at 3.7 per cent thanks largely to strong stamp duty collections. This had helped increase the size of Treasury’s surplus predictions, with the budget windfall rising from $1.3 billion next financial year to $3.3 billion by 2017-18, it said.

May was also a notable month for Australian real estate for another reason: at the 65th World Congress of FIABCI (the International Real Estate Federation) in Luxembourg an Australian, Robyn Waters, was inducted as world president. The first woman and first Victorian to be elected to this notable international role, Robyn is one of only three Australians to have held the post, along with Woodrow Weight and John Greig. This is a momentous achievement for Robyn personally, but also for our industry, to which she has contributed enormously all her working life. A former REIV board member, Robyn began helping in her parents’ Melbourne real estate agency from age 10. You can read our interview with her on pages 12-14.

CEO Report Enzo Raimondo CEO REIV

REIV action to retain commercial licensing pays off The importance of protecting the professionalism of our industry, and our customers from risk, were brought into sharp focus by a Victorian Government plan to allow inexperienced, unqualified and unlicensed operators to sell and lease commercial real estate. REIV lobbied strongly and successfully against this plan, which the government announced without consultation in January as one of 36 anti-red tape reforms. The changes would have created a two-tiered licensing system – the only such system in Australia. They were to have been introduced later this year and would have removed licensing requirements for agents involved in large commercial transactions. Our efforts on your behalf, driven by the REIV Commercial and Industrial Chapter, paid off and in mid-May we were told the government would not be proceeding with the plan to remove commercial agent licensing for “large transactions”. I was contacted by Consumer Affairs Victoria executive director Dr Claire Noone and a senior representative from the office of the Minister for Consumer Affairs with the news. This was an important win for us on an issue that posed significant risks for both business and consumers. Unlicensed operators would not be bound by the Estate Agents (Professional Conduct) Regulations and their customers would face increased risk because the operators would not be subject to probity checks or required to maintain an audited trust account. Without an agent, customers are exposed to high financial risk and the potential for unlawful behaviour. They would also not have been able to access the protections available through the Victorian Property Fund. Also, new entrants would not be bound by the REIV code of conduct which promotes ethical behaviour. And this move would reduce government

revenues – interest earned on agents’ trust funds flows to the State Government. Licensing was introduced in 1922 to protect consumers and create uniformity across the industry. Agents handling commercial sales undergo extensive training, including dealing with contracts, legal and ethical requirements, minimising consumer risk, private treaty sales and conflict management. Many vendors do not have experience with large transactions and using the services of a licensed agent provides a safety net. REIV held extensive negotiations with the government. We met the Treasurer and senior members of Parliament, including former Premier Ted Baillieu.

We also wrote to every Victorian Member of Parliament detailing our concerns about the detrimental impact of this plan. Throughout this period, we vigorously defended the requirement for commercial real estate agents in Victoria to be licensed. REIV is committed to a professional real estate industry in this state. We were disappointed that we were not consulted in advance of the announcement of these proposals and are gratified that the government has now taken a common sense approach to this issue. We hope these plans will not be revived in future. Should that happen, REIV will resist them. Continued on page 8

The Estate Agent ❘ July 2014

CEO Report

Continued from page 7

We acknowledge the hard work by the Commercial and Industrial Chapter on this issue – in particular, chairman Richard Simpson and committee member Joseph Walton. While commercial licensing has been a focus for our commercial and industrial sector, the strength of the residential market has provided a positive environment for agents across the state. More than 30,000 home sales were recorded by the end of April – up two per cent on the same time last year – and Melbourne’s auction market has been running hot. By the end of May, 10,000 homes had sold at auction across the state. As the shortest day approached and nights grew chillier, thousands of Melburnians took advantage of the final weeks of the autumn selling season to auction their homes. Two super Saturdays led up to Queen’s Birthday weekend and the start of winter, with close to 2500 homes going to auction over a fortnight.

‘As the shortest day approached and nights grew chillier, thousands of Melburnians took advantage of the final weeks of the autumn selling season to auction their homes’ Bumper auction weekends are not unusual – in the final three months of last year an average of 1000 auctions were held around the state every weekend. But what has changed is the proportion of homes sold by auction in outer suburbs, where traditionally private sale is favoured. By late May almost a third of all sales had been by auction, a significant increase on the same period in 2013. It has been middle to outer suburbs showing the highest clearance rates – Vermont South and Wantirna, Ashwood, Moorabbin, Bentleigh East and Oakleigh South, for example. In the north, as buyers who can no longer afford Carlton or Brunswick look further afield, almost all homes

auctioned in Coburg North have sold. With pressure on consumer sentiment in the wake of the budget, I am being asked to predict what the market will do for the rest of the year. Consumer sentiment – a leading indicator of the state of the market – fell slightly immediately after the budget was released. But it is unclear whether the usual bounce back within a couple of months will occur, given that polls are showing this budget is viewed by many in an unfavourable light. While it may have an impact on buyers’ willingness to commit to housing purchases, just how much of the budget the Federal Government succeeds in passing through both Houses of Parliament is also an unknown, particularly given the changes in Senate composition in the second half of the year. The positive element at present is low interest rates, which have helped to support the market over the past year. While these remain low, the auction market and broader property sector should remain strong, which is good news for members across Victoria.

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The Estate Agent ❘ July 2014

Bulletin

Plan for growth The Victorian Government’s plan for the growth of Melbourne over the next 40 years was released in late May. The blueprint, which says Melbourne’s population will hit 7.7 million by 2051, advocates a permanent urban boundary and sets up a mechanism to determine it. Plan Melbourne was released for comment in October last year. The government said the final version was amended after two years of public consultation and revisions, during which 10,000 people contributed ideas and recommendations. It defines areas of urban renewal and establishes reformed residential zones. It also incorporates

the government’s transport strategy. “Twenty minute neighbourhoods”, where jobs and facilities are a 20-minute trip from home, are to be established by a State Government-local council co-operation, according to the plan. With urban renewal projects such as Fishermans Bend intended to have up to 80,000 residents by 2050, the strategy envisages expansion of the central city to become Australia’s largest commercial and residential centre by 2040. Plan Melbourne had a mixed reception – criticised by the Opposition and “cautiously” welcomed by the Planning Institute of Australia.

Taking care of business

Business Victoria has redesigned its website to make it smartphone and tablet-friendly, after the State Government agency discovered more than 35 per cent of its customers accessed its website that way. With its previous site designed for desktop computer use and Business Victoria expecting more than four million web visits this year, it wanted its site to be simpler, faster and easier to use. So www.business.vic.gov.au was revamped in a partnership with a local web design company. Numerous areas relevant to the real estate agent and property industry are addressed on the new site, including hiring and managing staff, developing good financial procedures, resolving disputes, succession planning and selling a business, marketing, sales and online business, and technology. The site includes links to Facebook and Twitter and to subscriptions to its newsletters. State Minister for Technology Gordon Rich-Phillips said it was expecting more than 71,000 social media interactions, 75,000 online subscribers and more than 30,000 e-mails and phone calls. State Minister for Small Business Russell Northe said the website would make it easier for small businesses to access information for growing their business, solving problems and simplifying regulatory compliance.

The Estate Agent ❘ July 2014

Done deal: From left, Frank Valentic, The Block winners Chantelle and Steve and Michelle Valentic.

valentic’s been around the block REIV member Frank Valentic, of Advantage Property Consulting, was again an active participant in The Block auctions this year, bidding in all four and securing the final Albert Park apartment sold. For Valentic it was a repeat of last year in South Melbourne, when he was the underbidder in the first three Park St auctions, then secured the fourth. This was his fourth year bidding in The Block auctions, but he said this time there were no bargains – the eight participants made a combined profit of $2.426 million – a far cry from 2011 when he secured Polly and Waz’s Richmond house for $858,000 for an investor. With a rental of $995 a week and an extra $30,000 per annum in depreciation, it still returns 12 per cent rental, year on year, he said. This year, Valentic missed out on the first three apartments. He was bidding for investors on two, but one was for a professional couple in their 30s – an

intensive-care surgeon and a marketing manager – who actually preferred the fourth apartment because of its views. “I have bid at over 2000 auctions over the last 19 years as a buyer’s advocatebuyer’s agent and attend many auctions each weekend and I have never been more nervous at an auction as it was our client’s first choice and our last roll of the dice,” Valentic said. “My client was performing operations at his hospital and his female partner was too emotional and nervous to be anywhere near The Block so she was waiting with family nearby.” After jumpstarting the bidding on Steve and Chantelle’ s apartment early from $1.9 million to $2.2 million, he fought it out with another buyer’s agent bidding for an overseas Chinese investor. “It literally came down to the wire and we finally secured the apartment for our homebuyers on our last bid of $2.47 million.”

Bulletin

webb walks the walk When long-time real estate agent Philip Webb, principal of Philip Webb Real Estate, decided to undertake one of the world’s most noteworthy and challenging pilgrimages, he was doing it not only for himself, but for his brother. Webb, and his son David, undertook the 800km Camino De Santiago pilgrimage across northern Spain on foot in April, for Vicdeaf, a charity close to Webb’s heart because his brother, Martin, has been deaf since infancy. “This wonderful organisation has been tremendous in its care for my brother, and for deaf people of Victoria, and I wanted to help raise funds and awareness for Vicdeaf,” Webb said. As well as family and friends, much of the money came from the real estate industry – in particular, the team at Webb’s agencies, realestateview.com.au and REIV. The pair began their walk in SaintJean-Pied-de-Port, France, on March 30, finishing a month later, on April 30, at Santiago De Compostela, Spain, where relics of the apostle James lie in the historic cathedral. But Webb, who

had long wanted to undertake the walk, continued for an extra 100km to reach the ocean. The walk, a pilgrimage to the relics since the ninth century, was the subject of the Martin Sheen movie The Way and Webb said it makes an appearance on those things-to-do-before-I-die “bucket lists”. His motivations: a personal challenge, time out to recharge away from the cut and thrust of the business, and to improve his fitness. Donations remain open – and the walk has already raised more than $14,000 for Vicdeaf. To donate, visit give.everydayhero.com/au/philip-6

Philip Webb and son David on day 31 of the walk.

Progress after crisis

They filled our TV screens nightly during the Global Financial Crisis: those views of street after street of empty homes, abandoned when US lenders foreclosed on their owners’ mortgages. Now, though, the Mortgage Bankers Association reports that in the first quarter of this year new loan foreclosures in the US fell to their lowest level since mid-2006. But while the percentage of loans 90 days or more past due or in the process of foreclosure was also down, three-quarters of those originated in 2007 or even earlier. MBA chief economist Mike Fratantoni told World Property Channel: “The portfolio of loans made pre-crisis is steadily being resolved.”

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The Estate Agent ❘ July 2014

Profile

The Estate Agent â?&#x2DC; July 2014

Oc, opo Profile

French connection From a Coburg agency to the boardrooms of Paris, Robyn Waters has always kept one eye on the bigger picture

obyn Waters’ real estate career began at a photocopier in an agency on Sydney Rd, Coburg. It’s quite a climb to the boardrooms of Paris, but one Waters completed when, in May this year, she became the first woman and first Victorian world president of FIABCI, the International Real Estate Federation. Waters was born into real estate. “There was never any intention that I might do anything other than (work in) a real estate agency,” she says. Her parents founded and owned Barry Waters and Associates, with offices on Sydney Rd, Coburg and Bell St, Pascoe Vale. By 10, young Robyn was making the tea, emptying bins and working the photocopier. School holidays and Saturday mornings found her at the agency. After school she studied accounting and started in the firm’s accounts department, then changed her course to start studying for her real estate licence, a two-night a week course for four years. A year after she started, one of the first computerised accounting machines became available and, under Waters’ auspices, the family firm was one of Australia’s first agencies to have computerised accounting. It was a huge step forward; the vendor terms available postwar meant some clients paid off their properties weekly for decades. Waters had clients managing term payments for up to 30 properties. Focusing on accounts, administration and property management rather than sales, she would become a partner in

Moving up: FIABCI world president Robyn Waters.

the firm and officer in effective control until it was sold to Brad Teal when her father retired and Waters, mother to two young boys, thought she might stay at home (she didn’t). More than a decade on it is still clearly close to her heart: “On March 19, 2001, we sold the family business. I started on February 3, 1973, with Barry Waters and Associates,” she says. “I will never forget them (those dates), either of them. We had owned the business for 51 years.”

‘There will always be some men who regard you as subservient and expect you to serve the tea and coffee – take it in your stride and get them to serve it next time’ Waters was installed for her year-long term as the FIABCI world president at its Luxembourg conference after a year as president-elect. But her involvement with it began long before – in her first year at her parents’ firm in fact, when she accompanied them to its conference in Sydney. She then became involved in its young professionals section and, later, its committees, including education, membership development and professional and education exchange committee – having done an exchange with a US real estate office she knows first-hand how invaluable its international exchange and networking opportunities for agents are. Her election is a feather in her cap and in Australia’s. But down-to-earth Waters is reluctant to be portrayed as a

pioneer, saying real estate is no longer the “boys’ club” it used to be. Interviewed recently by a FIABCI public relations person about women in the industry, she said she had faced gender-related challenges but “have overcome these challenges by being well-prepared and informed and welleducated – so well-equipped to face the challenges”. She told her interviewer: “In all industries and professions there will always be some men who regard you as subservient and expect you to serve the tea and coffee – take it in your stride and get them to serve it next time.” It’s a no-nonsense response typical of Waters who tells EA: “I call a spade a spade. There is no grey area with me, I am black and white.” She is also unconcerned about being tarred with a gender stereotype brush. Waters, (who does not speak French) is now commuting to Paris, overseeing implementation of the FIABCI’s new strategic plan. She is involved in FIABCI’s work with the UN through FIABCI’s NGO consultative status to the Economic and Social Council. ECOSOC supports the Millennium Development Goals around the world and, in particular, United Nations committees on sustainability and development of financial stability in emerging financial markets. FIABCI is also involved in its work towards universal measuring standards, at present calculated differently in different parts of the world. For Waters, it’s a case of having her cake and eating it too, after many years in the industry. And, indeed, in her time at the REIV she became famous Continued on page 14

The Estate Agent ❘ July 2014

Profile

Continued from page 13

for excellent cakes she produced – while serving on the board and as REIV vice-president, a position she attained after long and invaluable service to its committees, including its professional standards committee and conference committee, and its northern branch. She pays generous tribute to the women mentors who helped her along the way, such as REIV past presidents Di Baker and Valda Walsh and the late Vicky Burnham. She also, unusually, pays tribute to the influence of her late mother-in-law, Adrienne, mother of her supportive husband Michael Herrod who manages his family’s speciality printing business. “She was a very fine example of how to be a woman in a family business,” Waters says. “She was collecting debts the day before she died (in her late eighties). She was a major influence in my life.” As well as her involvement with the family firm, REIV and FIABCI, realestateview.com.au has played a key role in Waters’ career. From 2001, under the direction of Sam Emerson, she began the task of selling the benefits of the industry-owned online portal, in which REIV was a shareholder along with a group of agencies. REIV would later buy back shares from the agencies

to become the major shareholder. “It was created to provide an alternative, competitive agency advertising edge for the real estate industry, and to be in control of their own destiny,” she says. “This saw realestateview go into competition with the major newspaper conglomerates – realestateview.com.au still holds its own in the market place and I am proud of how far it has developed from its humble beginnings.” Waters told her FIABCI interviewer it was an advantage being a woman in real estate: “We possess a lot of skills which ensure success, multitasking, organisation, people management, listening skills and finding creative solutions to problems.” These skills are being put to the test in her business, Get Robyn, around which she will juggle her FIABCI commitments. It is a business name she registered about six years ago, not quite knowing what it would be but thinking of a change from real estate, taking a new direction including event organising and helping people move

in and out of their homes. Inevitably though, this work has steered her back in the direction of real estate. For example, an elderly client recently moved to a higher level of retirement village care leaving a stressed daughter to cope with a house full of a lifetime’s belongings and memories. The sorting and selling have fallen to Waters. Another elderly client left home for aged care with nothing but a suitcase and a walking frame, leaving it to Waters to sort what she left behind. She is overseeing a building project for an overseas investor and project managing a major renovation, including the design choices and materials, for another overseas owner. Her website describes her as providing “niche real estate services” and she says, “I thought I was going to move away from real estate, but it is totally real estate work, drawing on my knowledge of how real estate works and how agencies work, and providing practical solutions to real estate dilemmas for those who are time short or skill deficient.” Her website says: “Moving on, moving up, moving out – Get sorted … get Robyn.” Waters herself is moving up to a major role on the international real estate stage and getting people sorted has been a lifelong career strength. But moving away permanently from real estate? Not likely!

individual members, making it the most representative real estate industry organisation in the world. All disciplines are represented among its membership: property management, property development, valuation, appraisal, brokerage, consulting, law, finance, architecture and urban planning. Its memberships are organised into newly-formed world councils of experts, developers and investors, managers and brokers. Each works to share information, network and do business together based on its area of expertise. All property types are also represented,

including luxury, leisure, commercial, residential, rural and hotels. The FIABCI mission is to open the international community to its members, enabling them to develop a broad base of contacts and to translate those into increased business opportunities and financial success. To increase these networking opportunities it meets in locations around the world, holding world congresses, running a scholarship foundation and exchange program and global competitions, including the Prix d’Excellence competition with The Wall Street Journal.

‘I call a spade a spade. There is no grey area with me, I am black and white’

What is FIABCI? Fédération Internationale des Administrateurs de Biens Conseils et Agents Immobiliers (FIABCI ) is the International Real Estate Federation. Based in Paris, this business network of real estate professionals in 55 countries was founded in France in 1949 and as well as English and French has three other official languages – German, Spanish and Japanese. It is an umbrella organisation for real estate business people around the globe. Its membership includes more than 100 professional associations, 65 academic institutions and 3000 14

The Estate Agent ❘ July 2014

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Market Update

Growth spreads, but slows down The additions of Bentleigh and Templestowe took the total number of suburbs with a median house price of more than $1 million to 52

elbourne’s median house price reached a new peak in the first three months of this year, with price growth in a broader spread of suburbs and more joining the milliondollar club – 52 now have a median house price of more than $1 million. But despite record-low interest rates, the level of growth did not bear out media hype about a price boom. This first-quarter growth was more moderate than in the past two quarters – a median of $662,500, up 3.7 per cent, compared with 5.3 per cent in the December quarter and 9.1 per cent in

Despite record-low interest rates, the level of growth did not bear out media hype about a price boom the September quarter. This represented year-on-year growth of 13.7 per cent. In regional Victoria, there was continued but moderate growth. The median house price grew 1.3 per cent to $322,000 – 2.4 per cent yearon-year. However, the median unit and apartment price was up 8.2 per cent

to $262,500, year-on-year growth of 2 per cent. In Melbourne, where some areas such as the CBD and Docklands have an oversupply of apartments, house demand continues to outstrip demand for units. The unit and apartment median of $499,000 was up just 1.1 per cent on the previous quarter – year-on-year growth of 8.4 per cent. Two suburbs topped the $1 million mark for the first time: Bentleigh, with a median house price of $1.05 million, up from $995,000, and Templestowe, with $1.033 million,

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The Estate Agent ❘ July 2014

Market Update

compared with $964,000 in the December quarter. This took the total suburbs with a median of more than $1 million to 52. The city’s most expensive suburb remains Toorak, with a $2.43 million median – down from the December quarter’s $2.875 million, which was boosted by multiple sales of more than $3 million. In second place was Kew, with a $1.944 million median, up from $1.7 million. Surrey Hills, with an 11.4 per cent rise in the past three months lifting its median to $1.551 million, was new to the list of more than 15 $1.5 million-plus suburbs in Melbourne. Toorak and East Melbourne topped the $2 million mark. While the top growth suburbs in the previous quarter were mostly in

inner Melbourne, there was growth this quarter further from the CBD including in Beaumaris, Brighton, Kew, Epping and Sorrento. The auction market stayed relatively healthy with a surge in auction numbers even before the two preEaster super Saturdays. By March 31, there had been 6739 auctions across Melbourne, up from 4952 the previous year – up across all areas of Melbourne including the outer suburbs, which traditionally favour private sales. There was a clearance rate of 72 per cent in the March quarter, falling to just below 70 per cent in April. But if surging auction numbers, higher prices and million-dollar suburbs have buyers wondering whether there is such a thing as

a cheaper house in Melbourne, the answer is a resounding yes. In Melbourne’s cheapest suburbs such as Melton it is still possible to buy a house for less than $300,000 and several suburbs, including Frankston North, Melton South and Millgrove, recorded a median below $250,000 in the March quarter. In Melton South, the median house price was just $222,500. In Melton West, with substantially more sales, the median was $290,000. And although Cranbourne just tipped over the $300,000, at $313,750, 25 per cent of all sales in the suburb were for less than $291,250. Others on the affordable list were: Wyndham Vale, Hoppers Crossing, Truganina, Carrum Downs, St Albans, Pakenham and Craigieburn.

Regional homes still on the rise Regional Victoria’s median house price continued its steady rise in the first three months of this year, up 1.3 per cent on the December quarter to $322,000 – 2.4 per cent year-on-year. This was a further increase on the record statewide high achieved in the final three months of 2013, which were up by more than 6 per cent on the same quarter in 2012. House price growth in Ballarat and Bendigo was ahead of that statewide, with Geelong slightly less so. Bendigo, with a $325,000 median, was the standout of Victoria’s major regional

cities, with house price growth of 1.6 per cent for the quarter, with Ballarat close behind – it rose 1.4 per cent to a median price of $299,000. Geelong grew 1.2 per cent to $415,000. The state’s north-east was a hot spot, with Benalla growing 11.4 per cent in the quarter to a $235,000 median, and West Wodonga recording a 7 per cent growth to a median price of $283,500. In central Victoria, Creswick grew strongly, up by 8.9 per cent for the quarter to a median price of $288,500. The increasing embrace of apartment living, extending beyond Melbourne city

to regional centres, meant growth in the median unit and apartment price for the first three months of this year outstripped that for houses. It grew by 8.2 per cent to $262,500, year-on-year growth of 2 per cent. Unit and townhouse construction in regional centres has grown to meet demand from downsizers and firsttime buyers priced out of the house market. Apartments there are becoming increasingly popular, with more than 500 unit and apartment sales across regional Victoria during the quarter. The Estate Agent ❘ July 2014

Market Update

Investors live it up after solid quarter High apartment rents and low vacancy rates were good news for the market

here was welcome news for investors in Melbourne and across the state as vacancy rates remained low and continued to decline in the first three months of this year. REIV’s median rental figures were a further plus, showing Melburnians embracing apartment living, with two and three-bedroom apartments and townhouses commanding higher rents than three-bedroom houses. The $452-a-week median rent for a three-bedroom unit was higher than all median house rentals, with the highest house rent $425 a week for four bedrooms. The rental return on one-bedroom units improved most in the quarter, with a weekly median of $340, up 2.7 per cent on the December quarter. The two-bedroom median was $390 a week, up 1.3 per cent, $20 more

The Estate Agent ❘ July 2014

than for a three-bedroom house. The trend is also being taken up in regional Victoria, where apartment construction is increasing. The $310 median weekly rent for a three-bedroom unit was up 1.6 per cent on the December quarter and higher than for the $290 for a three-bedroom house. The median weekly rental for two-bedroom houses was $250, up 2 per cent on the previous quarter. The overall Melbourne rental vacancy rate was 2.8 per cent, down from 2.9 per cent in the December quarter

The middle suburbs improved most – 2.8 per cent, down from 3 per cent in the December quarter and 3.6 per cent in the March quarter

and 3.2 per cent in the same quarter last year. The outer suburbs, including the Mornington Peninsula, had the lowest rate at just 1.9 per cent – good news for outer suburban landlords. But the middle suburbs improved most – 2.8 per cent, down from 3 per cent in the December quarter and 3.6 per cent in the March quarter last year. While the inner city still had Melbourne’s highest vacancy rate – 3.8 per cent – with an oversupply of apartments in the CBD and Docklands, longer-term prospects look brighter. Latest figures show Victoria’s population growth above the national average with most new residents overseas migrants. Many favour high-rise living and the location and amenities offered by inner-city apartments. Regional Victoria’s overall vacancy rate remained slightly lower than in the city. It was 2.7 per cent, down from 2.8 per cent in the final three months of last year and 3.2 per cent a year ago. Vacancy rates were down in every part of the state surveyed by REIV except Ballarat and the Central Highlands, where the increase was just 0.2 per cent to 2.2 per cent – still very low in an area facing a housing shortage.

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Net power: use it or lose it Agents must use the internet to their advantage

eal estate agents have been warned the internet is not only a valuable tool to help them do business, it has the potential to disrupt their businesses. REIV chief executive officer Enzo Raimondo says unless agents develop a strategy for the internet, the industry could suffer the fate of the travel industry, with the middleman removed from transactions. “While the internet has given us some advantages, it also presents other big challenges,” he says. Some real estate portals want to match buyers and sellers together without the use of agents and be the

source of all property information. Financed by high online advertising rates, they are cashing in on a resource agents are giving them for free: their data. “The strategy of the old media, who own all or some of the new media, is to transition the revenues they used to get

‘Unfortunately, agents are aiding their own demise by creating a monster like this that is driving the agenda for internet advertising’

from the print to online. Consumers pay a lot more for advertising when there is no good reason for this, with the lower costs the internet provides,” Raimondo says. “So agents find themselves selling advertising for a third party while discounting their fees. Unfortunately, agents are aiding their own demise by creating a monster like this that is driving the agenda for internet advertising.” With a recent survey showing most Australians spend up to a day a week on the internet, buying and selling houses Continued on page 20

The Estate Agent ❘ July 2014

Technology

Continued from page 19

will increasingly focus online rather than on traditional print media. Already, many agents recommend clients minimise print advertising to spend more on internet marketing. And small or solo agents, previously disadvantaged without multiple shopfronts, say online advertising means everybody is equal. The rapid growth in online internet advertising and Australians’ fervent adoption of online shopping – up by 11.3 per cent to $14.9 billion in the year to January, according to the NAB – make it clear agents must embrace this new way of doing business. If real estate portals boost their offerings to include research data, matching buyers and sellers and services from listing to settlement, agents could find themselves cut out of the transaction and doing little more than conducting open homes. Recently, agents responded to a Real Estate Business online story in which it was predicted more of them would operate from virtual offices. One asked whether ‘virtual’ open homes and online auctions would be next, others said an actual shopfront was no longer necessary.

The Estate Agent ❘ July 2014

In its 2014 Australian Connected Consumer Report, Nielsen found 38 per cent of Australian households today have four or more devices that connect to the internet. And it said online advertising is now 27 per cent of total advertising spend, up from 3 per cent in 2003. Accompanying this has been app development enabling house-hunters to search on the run. And Consumer Affairs Victoria’s free RentRight app means renters can send template emails to property managers. Smart business educator Peter Brewer has praised the DocuSign app, which enables signing documents using IOS, Android and Windows devices. REIV established its real estate portal realestateview.com.au to enable agents

Shifting trends: Aussies spend a day a week online.

Jump aboard: REIV chief executive officer Enzo Raimondo embraces the power of the internet.

to take an active involvement in online property sale and rental processes. Raimondo said realestateview.com.au is an industry-owned online portal offering buyers a genuine alternative to those owned by media companies. Technology means agents must also devise ways to value-add services which the internet cannot offer. If buyers are confused and overwhelmed by the wealth of listings, who better to guide them than an agent? Supporting this, The Australian recently reported that online searching was prolonging and widening property searches. Raimondo said agents needed to embrace technology and adopt their business processes to take advantage of technology, to add greatest value to clients and bolster their future.

Express every Saturday. The final word on real estate results

Profile

The keys to a rapid rise Despite his youth, Sam Nokes has moved up the property ladder fast. It’s all about knowing what you want

am Nokes knows where he is heading and isn’t shy about saying so. “I want to own the place. This place,” he says, pointing through the cafe window across High St, Armadale. In his line of sight is the elegant headquarters of Jellis Craig Bennison Mackinnon where he heads the property management department. For Nokes, property management is “not just something the receptionist helps with between phone calls, which it used to be”. Nor is it a bus stop en route to a “real” estate agent job as a sales consultant. Rather, it is the destination, a career leading to directorship and business ownership. At just 26 he knows what he wants. But then, he has since his Year 10 work experience at Jellis Craig Hawthorn. His sister Kristy worked there in sales but it was not her department that most inspired the Trinity Grammar School boy. “I spent a couple of days with the property management ladies and I thought that was quite cool,” he says. By 21 he was running the property management department at Buxton in Ashburton, despite a brief, postschool diversion from his career path. Deciding he should see what else was

The Estate Agent ❘ July 2014

out there, Nokes began work in event management and studied at William Angliss Institute – his most enduring memory of which was making cocktails and drinking them. “Essentially I was trying a few different things. But I wanted a new car and thought, I probably need a full-time job now. I went on the agent’s representative course at REIV.” Nokes is passionate about raising property management education standards and, while at Buxton, began working with REIV’s young agents chapter, which he now heads. He is also involved in the property management chapter. “I started getting really involved in property management, I loved the idea of improving the industry in general.” It is a tough job, he says, trying to balance the interests of tenants wanting a well-kept home and investors, some of whom don’t want to spend a dollar. The average tenure in Victoria is just 18 months. Nokes began in the industry on $25,000 a year, but an assistant property manager now begins on at least $40,000. And, while some directors are keen to offer their property managers equity to retain

them, many resist performance bonuses. With 15 staff managers and 1200 properties under management – more than $1 billion worth of real estate – Nokes compares his department to a managed fund. These days he manages a team, not a portfolio, which is a long way in seven years from his first job with a “oneman band” agency. “I learned a lot of really good stuff and a lot of what not to do,” he says. Then came three-and-a-half years with Hodges in Bentleigh, where he

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Young gun: Sam Nokes, head of property management at Jellis Craig Bennison MacKinnon.

began with three days in property management and two on reception. “It was the right way to learn. I realised that all the things I had learned so far were wrong,” he says. Nokes quickly became an assistant property manager, then a manager and says, “It was during that time that I decided I quite liked the technicalities and the intricacies of property management and it is there I started to become what I term a property management nerd. “I was hungry for learning, I would go to every single course I possibly

‘I was hungry for learning, I would go to every single course I possibly could, I did my licence while I was there’ could, I did my licence while I was there.” While at Buxton he undertook REIV’s auctioneers course and called about 150 auctions, volunteering for the extra weekend work just for the experience. From there he was headhunted to Jellis Craig in Ivanhoe as head of

property management. Then, when the business sold to Nelson Alexander, he moved briefly to Biggin & Scott. But a year ago the Jellis Craig Bennison Mackinnon opportunity, including merging three offices – Richmond, Armadale and South Yarra – into a cohesive business, was too good to resist. Nokes has an irresistible enthusiasm for his work, with barely a breath between swigs of his latte as he talks property management. “That young fellow lives and breathes property,” an REIV committee colleague said. But for Nokes, his career success is as much about those he learns from as his own abilities and he is generous with praise for them. They include his first property manager at Hodges, Jody Virgona, former REIV president John Grabyn, Matt Nicholls and Metro Property Management director Leah Calnan. “The whole point of having mentors is to broaden the scope of people you can learn from,” he says. “You don’t have to change businesses to get an insight into other businesses.” He also recommends young agents who are looking for promotion and opportunities to talk to their directors first. “I have moved several times, I am a poor role model for that,” he says. “Young people are very quick to see something else when they should have hung round and asked for opportunities.” Now, when selecting his own staff, he checks for their loyalty to the business. “That loyalty is worth more than anything,” he says. Nokes is tipped as a future REIV board member and agrees that is in his sights, although not immediately. “I have a young, new team, I need to be hands-on. But I am interested in standing for the REIV board in future.” That would include increasing the profile of property management. It is seen as most important when the sales market crashes, but when the market booms sales gain all the attention, Nokes says. “I want to see more balance.” The Estate Agent ❘ July 2014

Member News

Show up, be nice and get the balance right Young agents given inside scoop on how to be winners

eading agent Spiro Drossos says the two Ps – passion and persistence – are among the keys to his success. Drossos, three-time REIV Residential Salesperson of the Year, went from real estate beginner in 2003 to buying his own business in 2009. He spent the first 10 years of his working life in hospitality and, at the May 15 REIV Young Agents Chapter event, told more than 70 agents he applied lessons from that to real estate when he began. “What I quickly realised is, it is not about the scripts and dialogues, you just had to be up-front with people and be nice to people and they told their friends about it and all of a sudden you built a business,” the owner and principal of Barry Plant Manningham said. “I tell people that really it is about being yourself, being nice to people, and a lot of hard work; there are no secrets.” Drossos said it was important to stay in “the green zone” – that is, dollarproductive activities – for at least 50 per cent of the week because despite administration’s importance it did not generate income. Real estate work included rejection, he said. “When you get knocked down you have to know why you are getting back up. I speak a lot about being focused.” Drossos, who also has a Ringwood office, advised starting work early, learning from failures, having a to-do list and being passionate about the work. Personal goals were also important, even just working and planning for a weekend away. He bought his business from Barry Plant and said Plant was still a valued mentor. “You want to do your best and you want to do it on your own, but the advice I give to people is, if you call on

The Estate Agent ❘ July 2014

GETTING TO THE Heart of the matter The Young Agents Chapter was inspired by another winner earlier in the year: former elite sportsman and now HeartKids Australia ambassador Christian Williams, speaker at its March 20 cocktail party. Williams, Australia’s 2008 Beijing Olympics torch bearer, represented Victoria and Australia in archery, lacrosse, hammer throwing and the luge. But a diagnosis of dilated cardiomyopathy, a genetic heart condition, relegated him to walking and gentle yoga. About 60 agents heard Williams, who gives motivational talks about confidence and self-esteem at schools,

discuss the importance of living a healthy lifestyle and his commitment to mentoring teens. His message of battling the odds, harnessing the power of the mind and overcoming physical challenges provided a powerful message. Multiple award-winning auctioneer and chapter member Adrian Butera conducted a charity auction, at which more than $2000 was raised for HeartKids. The event was held at BMW Melbourne and BMW’s corporate sales manager, Simon Reid, spoke about the importance of brand and promotion and unveiled the new BMW 4 Series, giving attendees the first glimpse in Melbourne.

Inspirational: Former multiple-sport star Christian Williams shares his story of overcoming heart disease.

other people you can fast forward your success.” Andrew Paterson, in real estate for 25 years, won REIV Best Property Manager (Principal) in 2012 and has been a finalist four times. He told the young agents he first entered to set himself a challenge.

But Paterson, a director at Fletchers Canterbury for 10 years, said: “I also wanted a bit of personal recognition because it tends to be, in the industry, all about sales.” For him, working in property management was a deliberate decision – a factor in his success, he believes.

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Leading by example: Last year’s Young Agent of the Year, Daniel Wolman with Sam Nokes, Renee Reynolds, Andrew Paterson and Spiro Drossos.

“What I could see was it was an area that people really did not stay in for a long time,” he said. “I thought if I stay in it and become good at it I could become valuable. “I always had a dream to find the right firm and buy in.” Paterson said other factors included hard work, determination, honesty, loyalty, learning from others and visualising future success. No surprises there, perhaps, but he also adds waking early for a run, coaching AusKick, which his two boys enjoy, and supporting Collingwood. In short: work-life balance and fitness. “If you feel good in body and mind you do better,” he says. “I was asked, how have you done what you have done, and for me it has been a combination of how to go about doing your business but outside the business, it has been about fitness.” It is a philosophy he applies to his team, with the company providing

a wellness session incorporating nutrition, fitness and mental health. Paterson says too many agents eat badly, drink too much and are unfit, and eventually pay the price in relationships and health.

‘You just had to be up-front with people and be nice to people and they told their friends about it and all of a sudden you built a business’ He knows: “I got away with it till I was probably about 35, 36. I was really pushing the envelope with going out, going to the footy and having drinks and then I realised I could not get away with what I was doing.” Now he goes for that run – “I find if I achieve something early in the day it sets me up really well for the day” – and said he had learnt to manage himself and his people, incorporating fitness in his life by delegating things

he does not need to do. “We all want to retain control, but I felt that I had to let go; I used to want to do everything.” Now he works hard, but also spends time with friends and family. A touching conclusion to his wellprepared PowerPoint were photographs of his wife and boys. “I was proud to show my family,” he said. Work ethic and developing relationships were also addressed by Renee Reynolds, winner of the 2013 REIV Small Residential Agency of the Year and 2014 REIA Small Residential Agency of the Year. A former professional ballroom dancer, Reynolds also talked about employing the right staff. The final speaker at the event on the theme What It Takes to Be a Winner, was last year’s Young Agent of the Year, Daniel Wolman. He spoke about the importance of mentors, working in a team and networking, including within the profession. The Estate Agent ❘ July 2014

Member News

Hitting the road in style easier than you think Members make the most of discounts on cars, computers, gyms and golf

ena Molinaro was a Toyota driver. Whenever Lena – a director of Stockdale & Leggo Blackburn with husband Frank – upgraded from one model Toyota, it was to the next. However, husband and co-director Frank Molinaro, in real estate 37 years and an REIV member since 1983, was a Mercedes driver, regularly upgrading each model. His car is leased through the business and when he decided recently to upgrade to an E250 Cabriolet, he approached Mercedes-Benz Melbourne on Kings Way, South Melbourne, which offers a special deal for REIV members. At the same time, Mercedes-Benz Melbourne’s Patrick Latin offered a reluctant Lena the chance to test drive a Mercedes B200. “I thought he meant go round the block but they said, ‘No, take it home’,” Lena says. After driving it for a week she was sold and amazed Frank by renouncing her Toyota allegiance. “This is a big deal for me,” she says of her change of brand. “They gave me such a great price.” Frank says: “Certainly REIV members should take advantage of it.” The couple is now flying high – Mercedes-Benz Melbourne threw

Geelong celebrates at Past Presidents lunch The annual Geelong Past Presidents luncheon highlights the efforts of the division’s previous officeholders. This year, 18 past Geelong division presidents, secretaries and chairpeople attended the May 16 event at Ripples on the Bay in Geelong.

The Estate Agent ❘ July 2014

Comfortable cruising: REIV members Frank and Lena Molinaro were given a great deal on new luxury cars.

in helicopter flights to the airport next time they travel – having taken advantage of REIV members’ favourite member benefit. REIV membership manager John Mitchell says the member discounts on cars are the most popular REIV benefit on offer. Last year, REIV helped more than 200 members gain discounts on Mercedes, BMW, Audi and Volkswagen and other makes. Mitchell says the discounts available to members include: z Preferential pricing on new vehicles and options; z Reduced dealer delivery fee; z Complimentary pick-up and drop-off, or access to a loan vehicle; z Complimentary membership of road care services;

z Complimentary scheduled servicing for three or four years (depending on the dealership); z Preferential finance rates and tailored financial solutions. REIV also offers a huge range of other discounts through the Member Rewards program. These include discounts on office products and services such as web hosting and computers, gym and golf club memberships, travel products including insurance, personal image and styling and telecommunications and business solutions. For more information about REIV member benefits, please visit www.reiv.com.au/MemberRewards Annual gathering: Left to right, John Grabyn, Bill McEwan, Tony McManus, Graeme Sanders, Gina Tobolov, Wayne Mackay and Anne Grabyn.

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Training

New goals: Former footy stars keen to make mark Social media is helping Ed and Nick Lower reach potential clients

ith more than 350,000 followers on social media, Ed and Nick Lower represent a new generation of real estate agent. The high-profile 26-year-old identical twins, former AFL players, are among almost 1200 new agents to undertake REIV’s agent’s representative course this year. Their new suit-and-tie careers – Ed with Savills commercial leasing, Nick with CBRE residential projects – are a far cry from a muddy footy field or Ed’s three months in the public eye on Big Brother. But the pair bring to their new role ready-made databases on Facebook, Instagram and Twitter – property buyers of the future following their every move. Ed eating chocolate, drinking coffee, driving an Audi – it’s all there for his followers to like. “The day I started at Savills I tweeted and everyone was very, very supportive,” he says. “The engagement with them is really warming.” Ed hopes they will follow him in his new role and that he will be able to help them in future. The five-day agent’s representative course, the basic requirement for real estate work in Victoria, is REIV’s most popular. Last year, 1800 students undertook it; 1597 the year before, up from 865 in 2010. Slightly more women than men are entering the industry – 51.9 per cent of women compared with 48.1 per cent men since 2010. And there is no age restriction; REIV’s youngest students are 18, the oldest to date, 80. While some come straight from school, with only a little work experience under their belts, others come from all walks of life.

The Estate Agent ❘ July 2014

Ed, who undertook a business degree at Victoria University while playing football, had his career with North Melbourne cut brutally short by a knee injury in 2011. He then worked in financial planning, mortgage broking and sports management. “I was a bit lost as to what I wanted to,” he says. So when approached to enter the Big Brother house last year, he thought, “Why not?” He lasted 94 days in the house, leaving a week before the grand final and placing sixth, during which time he built a national profile.

‘I like chatting with people and getting to know people and that, hopefully, will hold me in good stead down the track’ “I loved it, it was so different to what I normally do,” he says. “It was an experience for me to look back on when I am 60 and say, ‘I did that’. It led to where I am now. I have had time to do a few things and have fun.” Ed had a long-standing interest in property. When he left the Big Brother house, Nick – who undertook the course in January – started work with CBRE. So he enrolled and a week after finishing he started at Savills, spending a month doing its databases – “a great way to learn about its clients and the industry”, he says. “I was keen to work for a big global company and Savills seemed a great fit for me. And I am really surprised how many transferable skills there are, not only from AFL football but from sports management,” he says. “I like chatting with people and getting

to know people and that, hopefully, will hold me in good stead down the track. “In real estate you have to have a good relationship with clients.” The experience of working as part of a team and with people from all over the country also helps, he says. Nick, who has been selling Studio Nine apartments in Richmond, played AFL for Port Adelaide, Fremantle and the Western Bulldogs over eight years. When delisted by the Bulldogs last year he “came to a crossroads” and decided it was time for Plan B. Thanks to the AFL’s Next Goal program, which helps players prepare for life after football, he had spent time shadowing commercial agents. So he approached CBRE, then immediately enrolled for the course. Both twins found it relevant to the industry, with teachers upfront about the challenges and with stories from their own experiences to tell. Nick, planning to study for his full licence, says: “You get the experience of people who have been in the industry for 25 years and hope to remember some of that when you are in the field.” Added Ed: “I appreciated the fact they were honest with us about the tough aspect as well as their own great stories. “I came out of it feeling as though I had been given amazing tips. I felt great walking out of the REIV course.” For information about REIV’s agent’s representative course, Certificate IV in Property Services (Real Estate), required for a full real estate agent’s licence, and advanced courses go to www.reiv.com.au/Training

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Grabbing their chance: Twins Ed and Nick Lower are among almost 1200 new agents to undertake REIV’s agent’s representative course this year.

The Estate Agent ❘ July 2014

Best Practice

Can I quote you on that? Underquoting is back in the headlines, but is it really as widespread as some people think?

uoting a prospective price to a vendor is, without doubt, one of the most demanding aspects of any real estate agent’s role. Not only must the agent take account of the house on offer – location, quality, special features – and of prices in the area, but must combine trends analysis with an element of psychic power: how far will prices rise between appraisal and auction day? In early June, the perennial issue of underquoting again had an airing in the media after the launch of a petition by a small group of Melbourne agents on website change.org calling on the State Government to compel agents to publish the reserve price at the start of a pre-auction sales campaign. The issue is not confined to Victoria: the petition followed a push by New South Wales agent Patrick Bright to require public advertising of reserve prices seven days before auction. And in Queensland, the government is looking to remove price guides for properties going to auction. Neither REIV nor Consumer Affairs Victoria support the push for the publication of reserves, with CAV director Claire Noone quoted as saying this could “distort the market and

The Estate Agent ❘ July 2014

jeopardise the auction-selling process”. The issue, always guaranteed to garner headlines, was first reported by The Age, with the claim that “underquoting is rife in Melbourne”. However, REIV has no evidence of this and investigations by CAV have also failed to substantiate such claims. A CAV spokeswoman says it received 745 complaints about real estate agents during 2012-13, about 80 per cent relating to underquoting. Most were unsubstantiated. “Consumer Affairs Victoria takes enforcement action where it finds evidence of underquoting,” she says. While REIV would not claim that no agents ever underquote, CEO Enzo Raimondo says it is far from widespread and the vast majority run fair and ethical sales and marketing campaigns. He responded to reports of the petition by saying any member of the public who has an issue with price quoting should refer the matter to CAV.

‘Agents should be clear and quote as accurately as possible when advertising property prices’

Underquoting is illegal, with REIV member agents also bound by the code of ethics requiring fair and honest dealings with property buyers. “Agents should be clear and quote as accurately as possible when advertising property prices,” he says. The CAV spokeswoman says Australian Consumer Law – Schedule 2 of the Competition and Consumer Act 2010 – prohibits a salesperson from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive (section 18) and making false and misleading representations regarding the price of the property (section 30). There are civil and criminal penalties for a breach of s30, including a fine of up to $220,000 for an individual and up to $1.1 million for a corporation. But while talkback radio on the issue of underquoting is guaranteed to draw callers who believe they have been a victim, it is important to note that a sale price higher than the initial advertised price is not evidence of underquoting. Consumer Affairs Victoria says underquoting is when an agent misleads a prospective buyer about the likely sale price of a property on

Best Practice

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‘If a vendor’s expectations were the only driver of the quote range, then almost every home would be over-quoted. Equally, buyers have a champagne taste on a beer wallet’ the market – for example if agents advertised or advised amounts less than the seller’s asking price or auction reserve, or less than the agent’s estimate of the selling price or less than a genuine offer or expression of interest already rejected by the vendor. Raimondo says agents who deliberately mislead or deceive buyers will lose business, or go out of business, with social media ensuring bad word-of-mouth. He says underquoting emerges as a hot topic during improving property markets. Melbourne’s median house price increased by 13.7 per cent last year and the trend continued in the 2014 first quarter with a 3.7 per cent

increase. And in May alone there were almost 10,700 sales transacted. Strong demand and competitive bidding at auctions can easily push up property prices beyond the advertised price range or reserve. There are times when results exceed everyone’s expectations. Vendors are happy, buyers less so. Real estate agent Brad Teal says his company’s policy is to include the reserve price in the quote range. “We don’t get it right every time – that’s impossible,” he says. “But our statistics show we get it right more than 90 per cent of the time.” He may lift or drop a quote range during a marketing campaign

depending on the level of interest in a property and says establishing a price range before selling can be difficult, particularly when agent and vendor differ on what the property is worth. “If a vendor’s expectations were the only driver of the quote range, then almost every home would be overquoted,” he says. “Equally, buyers have a champagne taste on a beer wallet. If I quote a price range of between $600,000 and $660,000, then the vendor hears $660,000, but the buyer hears $600,000. So there’s a communication issue – people hear what they want to hear.” Teal says most agents try to quote price ranges accurately. “Underquoting wastes everyone’s time. A small percentage of agents underquote to try to build their databases. But the public isn’t silly and will catch them out.” The Estate Agent ❘ July 2014

Course Schedule

Get an REIV qualification UPCOMING LEADERSHIP & BEST PRACTICE COURSES 2014: Class

Date of Class

Time of Class

Coaching & Mentoring

Thursday, July 17

9am – 5pm

Gender Sales

Wednesday, July 23

9am – 12.30pm

Managing Performance at Work

Wednesday, July 23

1.30pm – 5pm

Customer Service

Thursday, July 24

9am – 5pm

Safety Risks in Estate Agency Practice

Tuesday, July 29

1.30pm – 5pm

Effective Meetings

Wednesday, July 30

9am – 5pm

Time Management

Thursday, August 7

9.30am – 12.30pm

Recruit to Retain

Thursday, August 7

1.30pm – 5pm

Personal Productivity

Monday, August 25

9am – 5pm

Managing Stress

Tuesday, September 2

9am – 5pm

Sales Fundamentals

Wednesday, September 10 9am – 5pm

Administrative Support

Friday, September 19

9am – 5pm

Safety Risks in Estate Agency Practice

Friday, September 26

1.30pm – 5pm

UPCOMING LEADERSHIP AND BEST PRACTICE COURSES IN JULY: Personal Productivity (NEW) Many people spend their days in a frenzy of activity, but achieve very little, because they’re not concentrating their effort on the things that matter the most. This workshop will help you learn new ways to organise your time for a more productive life. It will also show you some techniques for rebalancing your energy levels. It’s time to exhale stale, old ideas. And, inhale new inspiration for joyful living that produces quality outcomes.

Customer Service During this workshop we look at all the different types of customer service. It is a misunderstanding that only employees who have direct involvement with customers need these skills, such as a receptionist or a telesales marketer. Perhaps you are a company owner, in which case you would be serving customers and your staff.

Sales Fundamentals By the end of this course, participants will be able to understand the language of sales, prepare for a sales opportunity, begin the discussion on the right foot, make an effective pitch, handle objections and seal the deal. You will also gain knowledge on how to follow up on sales, set sales goals, manage sales data and use a prospect board. Course offerings dates and time subject to change.

The Estate Agent ❘ July 2014

Managing Stress We have all experienced stress at some point during our day to day life. It can be brought on by a myriad of reasons, whether it is in the workplace or in our personal life. In the workplace employees at all levels can feel stressed out, anxious, and misunderstood. In our personal life the stresses can be even greater due to finances, family and responsibility. There are two types of stress: positive and negative. The key is to maximise the positive stress and to minimise the negative stress. This course will offer participants a three-option approach for addressing any stressful situation, including the use of routines, techniques for relaxation, and how to log stress.

Effective Meetings Meetings are expensive – the fewer of them you have, and the shorter and more effective you can make them, the better for the company. This course will provide grounding in the fundamental requirements for all meetings, including details on agenda, preparation, conduct of meetings, and some tools and techniques to help you make your meetings productive.

Administrative Support Administrative skills are essential whatever your position or role is within an organisation. Being punctual, organised and effective in your written and verbal communication is crucial. During this workshop, you will learn skills that will help you manage your time, communicate and collaborate with others effectively.

Effective Conflict Resolution There are many ways to resolve conflicts – surrendering, running away, overpowering your opponent with violence, filing a lawsuit, etc. Conflict resolution grew out of the belief that there are better options than using violence or going to court. Today, conflict resolution is used in a wide range of industries covering an array of different situations. This course will demonstrate the six-step process to resolve conflicts of any size. You will also learn crucial conflict resolution skills, including dealing with anger and using the Agreement Frame.

Course Schedule

UPCOMING SPECIALIST COURSES 2014: Class Date of Class

Time of Class

Class

Date of Class

Career Kickstart – Business Broking Tuesday, August 12

9am – 5pm

Career Kickstart – Business Broking Wednesday, August 13

9am – 5pm

Career Kickstart – Business Broking Thursday, August 14

9am – 5pm

Introduction to Commercial Property Sales

Friday, August 22

9am – 5pm

Time of Class

Career Kickstart – Residential Property Sales

Tuesday, July 1 – Friday, July 4

9am - 5pm

Preparing for, and Presenting at VCAT

Monday, July 7

9am - 5pm

Commercial Property Management Fundamentals

Thursday, July 10

9am - 5pm

Introduction to Auctioneering

Monday, July 21

9am - 5pm

Intermediate Commercial Property Sales

Introduction to Auctioneering

Monday, September 1

9am – 5pm

Tuesday, July 22

9am - 5pm

Residential Sales Refresher

Monday, September 8

1.30pm – 5pm

Tuesday, September 9

9am – 5pm

Intermediate Owner’s Corporation Management

Wednesday, July 23

9am - 5pm

Advanced Residential Property Management

Residential Property Management Refresher

Tuesday, July 29

9am - 5pm

Career Kick-start - Residential Property Management

Monday 15 September – Thursday 18 September

9am – 5pm

Commercial Property Management Fundamentals Part 2 Lease administration

Wednesday, July 30

9am - 12.30pm

Leasing Commercial Property

Tuesday, September 16

9am – 5pm

Intermediate Residential Property Management

Friday, September 26

9am – 5pm

Friday, August 1

9am - 5pm

Residential Property Management Refresher

9am – 5pm

Monday, August 4

9am – 5pm

Commercial Property Management Fundamentals

Friday, September 26

Advanced Auctioneering Career Kick-start – Residential Property Management

Monday, August 4 – Thursday, August 7

9am – 5pm

Advanced Owner’s Corporation Management

Monday, September 29

9am – 5pm

Listing Commercial Property for Lease

Friday, August 8

9am – 5pm

REIV Certificate IV in Property Services (Real Estate) FRIDAY CLASSES – Beginning July 2014

WEDNESDAY CLASSES – Beginning September 2014

9am - 5pm at the Camberwell Campus

Cluster

Classes Start

Date of last class

Cluster

Classes Start

Date of last class

Property Management

July 25

August 15

Agency & Risk

September 3

September 17

Property Sales

August 22

September 12

Property Management

September 24

October 15

Appraisal & Auction

October 3

October 24

Property Sales

October 22

November 12

Agency Management

November 7

November 28

Appraisal & Auction

November 19

December 10

Agency Management

January 28, 2015

February 18, 2015

EVENING CLASSES – Beginning July 2014

TUESDAY CLASSES – Beginning October 2014

6.30pm - 9.30pm at the Camberwell Campus

9am - 5pm at the Camberwell Campus

Cluster

Classes Start

Date of last class

Cluster

Classes Start

Date of last class

Property Management

Tuesday, July 22

Thursday, August 14

Agency & Risk

October 28

November 18

Property Sales

Tuesday, August 19

Thursday, September 11

Property Management

November 25

December 16

Appraisal & Auction

Tuesday, September 30

Thursday, October 23

Property Sales

January 27, 2015

February 27, 2015

Agency Management

Tuesday, November 11

Tuesday, December 2

Appraisal & Auction

February 24, 2015

March 17, 2015

Agency Management

March 24, 2015

April 14, 2015

Using REIV’s flexible Rolling Enrolment options, you can design your own class schedule, picking any of the classes within or across the timetable so long as you attend and complete one class set for each unit. Visit www.reiv.com.au/training/qualifications for more information

The Estate Agent ❘ July 2014

Course Schedule

REIV Certificate IV in Frontline Management Beginning August 2014 9am - 5pm at the Camberwell Campus Cluster

Classes Date

Workplace

Wednesday, August 13, Thursday, August 14

Customer Service

Thursdays, August 21, 28

Safety

Thursday, September 4

Management

Thursdays, September 11 & 25 , October 2

Marketing

Thursdays, October 9 – 16

Presenting

Thursdays, October 23 – 31

Beginning October 2014 9am - 5pm at the Camberwell Campus Cluster

Classes Date

Workplace

Monday, October 20, Tuesday, October 21

Customer Service

Mondays, November 10, 17

Safety

Monday, November 24

Management

Mondays, December 1, 8, 15 & Feb 2, 2015

Marketing

Mondays, February 9, 16, 2015

Presenting

Mondays, February 23 & March 2, 2015

Traineeship: The ultimate win/win fOR employers Imagine being able to train, mentor and support your staff while the REIV provides their education and as an employer you get paid by the government. The Learning and Development Department has been working alongside the government to make this a reality and has been running a successful traineeship program for several years. Under a traineeship scheme, employers have the opportunity to sign new staff members up for their chosen professional course. On the basis that they meet eligibility criteria and fulfil both on and off the job requirements the government will pay a total of $4000 in employer incentives. The trainee benefits by having a structured but flexible learning program with the choice of face to face learning or distance education. They will learn and grow with their employer and the business whilst they gain a qualification that will help them excel both personally and professionally. The Certificate IV in Property Services is the ultimate educational requirement for anyone forging a career in real estate but as the industry moves forward there are many more career options and people are building successful careers as administration professionals within our industry. For more information on the scheme, visit the traineeship page on our website www.reiv.com.au/Training/Traineeships or contact our traineeship officer Lucinda Savidis on (03) 9205 6640 or email lsavidis@reiv.com.au

SHAYNNA BLAZE WRAPS UP THE 2014 WOMENS SERIES EVENTS! Shaynna Blaze is an Award-Winning Interior Designer who has created stunning interiors in residential homes and commercial spaces for over twenty years. Join us for the final Womens Series event of the year and find out how Shaynna transforms commercial, private and retail premises from the most modest budgets to million dollar projects! Date: Time: Venue: Cost:

Friday 22nd August, 2014 7.00am to 9.00am Hilton on the Park, 192 Wellington Parade, East Melbourne $110 for REIV Members | $130 for Non-members

FIND OUT MORE: www.reiv.com.au/inspiring Email events@reiv.com.au Call (03) 9205 6604 34

The Estate Agent ❘ July 2014

Oc, opo Conference

Expert advice to help you stay out in front

August’s REIV annual conference promises to inform, inspire and entertain

s the face of the Seven Network’s Sunrise program, David “Kochie” Koch is in many Australians’ homes from the moment they wake up. AFL fans know him as the chairman of Port Adelaide football club. Before becoming a TV presenter, Koch was a respected business and finance commentator for more than 20 years. A Money Management survey recognised him as one of the 10 most influential people in establishing the retail financial services industry. Koch, sought after on the speakers circuit, will be one of four keynote speakers at REIV’s annual conference in August, with his address on the second afternoon guaranteed to inspire, inform and of course, entertain. He served as a director of the NSW Small Business Development Corporation for more than six years, is a former business owner, operator and company director. His speciality is highly relevant to our industry: success in small business and investment issues. The conference, which has the theme “R You Ready for More”, has three other high-powered keynote speakers: Tim Reid, James Kane and Felicity Harley. Reid, better known as The Ideas Guy, is a marketing and branding expert with practical ideas for attracting customers. Kane, speaking on the second morning, takes on big topics: loyalty and human behaviour. A US-based researcher and consultant on the science of loyalty, Kane specialises in “the brain science behind loyalty and relationships”. The author of two forthcoming books, The Loyalty Switch and Virtually Loyal, Kane has served as a guest

Industry experts: Tim Reid and David Koch will deliver keynote speeches at this year’s REIV conference.

REIV is helping conference participants get the edge on technology with sessions devoted to digital and social media and marketing skills instructor at Harvard University, and has advised organisations from Global 1000 companies to not-for-profits and professional associations. With increasing recognition of the importance of work-life balance and wellness, Harley, who successfully launched Women’s Health magazine and is a co-host of the Seven Network series Live Well, will have much to offer those living on snacks and takeaways. The program is designed to enable you to build your own conference. Both days offer a choice of sessions led by inspirational speakers and those experienced in practical, how-to advice

for auctioneers and sales consultants, property and owners’ corporation managers, commercial and industrial agents and business brokers. As well, REIV is helping conference participants get the edge on technology with sessions devoted to digital and social media and marketing skills. US-based Tara Christianson, technology and training director for Century 21 Redwood Realty, will offer advice on using social media to build your business. This year’s conference is an industry must, offering practical tools to remain at the industry forefront. It includes the latest trends and developments as well as the chance to be informed, entertained and inspired. REIV Annual Conference, August 5-6, Crown Conference Centre, Melbourne. Free parking, free wi-fi and discount accommodation available. Discount registration fees for REIV members. For information and to register go to www.reiv-ryouready.com.au The Estate Agent ❘ July 2014

Auctions

Really sell it: Auctions speak louder than words Courses are available to help agents take charge of the entire sales process

elbourne is Australia’s auction capital and it is living up to that reputation with a succession of 1000-plus auction “super Saturdays” and with the spread of auctions to outer suburbs where private sale is traditionally favoured. By mid-May, 23 per cent of all Melbourne sales had been by auction – up from 18 per cent in the same period last year. And in the March quarter there were 7647 auctions, compared with 5376 in the same quarter last year. Auctions mean auctioneers – a senior Sydney agent predicts growing demand for auctions there and admiration for the Melbourne model (an agent managing the entire sales and auction process) will mean more Sydney agents becoming auctioneers. In Victoria, demand for skilled auctioneers to get the highest prices for vendors means REIV’s beginner and advanced auctioneering courses are running several times a year and are almost always full. The classes have a maximum of 15 students, so the trainer can tailor them to students’ needs. REIV also runs annual auctioneering competitions, with the title of Senior Auctioneer of the Year one of its most prestigious. The winner joins those from other states and New Zealand in the Australasian championships, this year in New Zealand in October. After losing in the 1993 Australasian finals, Peter Batrouney, auctioneer with Jellis Craig Hawthorn, hired a voice and drama coach for his 1995 bid and won. “At the elite level, there is only a fine line between you and the next bloke and you have to develop an edge,” he says. “That was my way of getting an edge and around it was a lot of practice.”

The Estate Agent ❘ July 2014

Springing into auction: Jeremy Tyrrell at the REIV Auctioneers Competition.

REIV also runs competitions for residential newcomers as well as commercial and industrial novices, offering the chance to test their skills on a live audience. Batrouney keeps the advice of his first boss in mind when auctioneering: “He always said, and I think this is a vital thing, you have to make the crowd feel you are on their side even though they know you are not.” Peter Hawkins, of Pat Rice &

Hawkins, a former Australasian auctioneering champion, says three ingredients make an expert auctioneer: voice projection, confidence in public speaking and product knowledge. “The worst thing an auctioneer can do is arrive at the property five minutes before,” says Hawkins, who auctions some of Victoria’s leading rural properties. “Good research is necessary, putting some time into it before the actual auction.”

‘The worst thing an auctioneer can do is arrive at the property five minutes before. Good research is necessary, putting some time into it before the actual auction’

Oc, opoAuctions

Hawkins, a member of REIV’s auctions committee, says courses are essential for beginners: “I think it is a must, the grounding before you start doing public auctions is an essential ingredient of what you’re going to do. “If you don’t do it properly from the start it is very hard to get the old habits out of your system.” He recommends the introductory course, designed for those who have done up to 10 auctions, even for those not planning to become auctioneers. Those enrolled understand the regulatory requirements of signing up an auction but need to gain confidence and skills in calling one. The practical program includes communication techniques, auction-calling skills and tips, developing a personal style and dealing with challenging conditions. Advanced Auctioneering, for those who have completed 20 or more

Peter Batrouney’s auctioneering tips: z An extroverted personality is needed; z Work on your language to ensure you can use strong and meaningful words with impact; z Less is more – don’t go on too long; z Be as direct as possible about the three most significant aspects of the property; z Create empathy with the crowd – make them feel you are there to help them buy the property; z Where possible and appropriate, make it witty.

auctions, takes skills to the next level. It updates participants on the latest techniques and gives them the opportunity to improve by conducting

mock auctions critiqued by the trainer. REIV recommends also taking the auction units in the Certificate IV in Property Services: Prepare of Auction & Complete Sale and Conduct Auction. Introduction to Auctioneering begins Monday, July 21, at REIV. 9am-5pm. For information go to www.reiv.com.au/ Training or contact the REIV specialist course officer on 9205 6666. See the website or contact REIV for details of the next Advanced Auctioneering course. REIV Senior Auctioneers Competition final, Wednesday, July 16. Residential Novice Auctioneers Competition, heats, September 2 and 3; final, September 30. For information contact Erin Livingston phone 9205 6666 or email elivingston@reiv.com.au

REIV LEADERSHIP LUNCH SERIES Join us for part two of the Leadership Lunch Series featuring Tom Panos, the General Manager of Sales – Real Estate at News Corp Australia and freelance Sydney Auctioneer, conducting an average of 10 auctions every Saturday. Join us in conjunction with the Sales Chapter and learn from one of Australia’s leading real estate coaches! Date: Friday 12th September, 2014 Time: 12.00pm - 2.00pm Venue: Park Hyatt, 1 Parliament Place, East Melbourne Cost: $130 for REIV members $150 for Non members Includes 2-course lunch & beverages

FIND OUT MORE: www.reiv.com.au/leadership The Estate Agent ❘ July 2014

Qualifications Jodi Sanders, GM Learning and Development REIV z Sends out the right message to

The importance of qualifications

ccording to the Australian Bureau of Statistics, “over recent years, the proportion of Australians who have gained a qualification has been steadily increasing. Between 2001 and 2011, the proportion of all Australians aged between 15 to 64 with a qualification ranging from a Certificate I to a postgraduate degree, increased from 47 per cent to 57 per cent. Increasing levels of education reflect the broad structural changes in Australia’s labour market in recent decades, including increases in service industries, which often require qualifications for employment, and concurrent reductions in the manufacturing

industry, which may not require qualifications for employment.” As a client-driven industry, property services is reliant on a mastery of skills to ensure customer engagement and satisfaction. There are continuing pressures to constantly measure your relationships, and refine your processes, and proactively solve and prevent issues that may arise. Further education and development will impress any current or potential employer. Upskilling or reskilling not only enhances your CV and makes you more marketable, but it also: z Shows employers you have the drive and determination to achieve your career goals;

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GENERATE MORE REFERRAL BUSINESS Give your clients an API gift subscription

current or prospective employers that you are someone who is taking control of your career; z Makes you more valuable to your current employers, and in the event of downsizing it is less likely you will be considered; z Keeps you up to date with developments in your field and demonstrates to employers that you are committed to continuing professional development; z If you are an employer, demonstrating your commitment to professional development by showcasing or enrolling in your own formal qualifications will increase motivation among your team and enhance productivity. The opportunity to upskill creates many benefits that will open pathways that you may not have considered when embarking on additional training. You’ll find more information on our qualifications at: www.reiv.com.au/Training

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The Estate Agent ❘ July 2014

Events Calendar

Reiv events to put in your diary

JULY

SEPTEMBER

15th

Southern Division Lunch

2nd-3rd Novice Auctioneers Competition – Heats

16th

Senior Auctioneering Competition – Final

10th

Buyer’s Agents Knowledge Network Event

23rd

Sales Knowledge Network Event

12th

Leader Lunch Series – Tom Panos

25th Commercial & Industrial Economic Forecast Luncheon

17th

Young Agents Knowledge Network Event

AUGUST

18th Commercial & Industrial Marketing Awards and Novice Auctioneers Competition Final 30th

5-6th REIV Conference 13th Property Management Knowledge Network Event – Geelong 15th

Young Agents Knowledge Network Breakfast Event

22nd

Womens Series Breakfast – Event 3

27th Commercial & Industrial Novice Auctioneers Competition – Heats

Novice Auctioneers Competition Final

OCTOBER 23rd

REIV Awards for Excellence

To find out more about upcoming REIV events or to make a reservation, please visit www.reiv.com.au/events. Events are listed there by category as well as in the full 2014 calendar, which can be downloaded as a PDF.

28th Property Management Knowledge Network Event – Melbourne Metropolitan

The Estate Agent ❘ July 2014

TO BE THE LOCAL REAL ESTATE EXPERT YOU NEED VICTORIA’S BEST SALES DATA. Great offers available for REIV Members. Call 1300 695 645 or email success@propertydata.com.au to find out more.

Oc, opo Events

Itâ&#x20AC;&#x2122;s not just what you know, but who you know AFL star Shane Crawford and media personality Tracey Spicer led inspirational networking events Photos: Stu Morley

Familiar face: Above left, Shane Crawford with guests at the REIV Leadership Lunch Series, which was held at the MCG, above right.

Meet and greet: Media personality Tracey Spicer, right, was the keynote speaker at the REIV Womens Series Lunch, where guests enjoyed networking opportunities with other industry professionals.

The Estate Agent â?&#x2DC; July 2014

Best Practice

Privacy Act: What you need to know With the risk of penalties of up to $1.7 million, it pays to be across recent changes to the Privacy Act 1988

weeping reforms to the Privacy Act 1988 which took effect on March 12 have had a significant impact on most real estate businesses and have meant they not only need to be aware of the ongoing reputational risk arising from a breach of privacy, but also the increased legal and financial risks. After the reforms the Australian Information Commissioner has increased powers, including the power to seek penalties of up to $1.7 million against a business found to be in breach of the Privacy Act. The reforms, among other things, introduce the 13 Australian Privacy Principles, which impose several obligations. These include: z the requirement for comprehensive privacy policies and processes to be in place, including policies and processes for access to, and correction of, personal information and privacy inquiries and complaints; z the requirement to ensure businesses collect only personal information reasonably necessary for their legitimate functions and activities, and use and disclose that personal information only for, and if relevant to, those purposes; z r estrictive rules about how businesses can use personal information for direct marketing purposes; zm ore onerous responsibilities when disclosing personal information to an overseas entity including taking reasonable steps to ensure the overseas entity does not breach the APPs, to avoid being found liable for any act or omission by the overseas entity that is not in accordance with the APPs;

‘Businesses not only need to be aware of the ongoing reputational risk arising from a breach of privacy, but also the increased legal and financial risks’ z t he obligation to maintain the accuracy of personal information held; and z the obligation to protect and secure personal information held, whether

it be held in hard copy or on an electronic database, including from external interference such as hackers or viruses. To ensure compliance with the new privacy obligations, real estate businesses should take the following steps: z c onsider current privacy policies and processes to determine gaps with compliance; z r eview and update current privacy policies to ensure they comply with the APPs; z r eview and amend contracts with third party suppliers, particularly with overseas suppliers; z r eview direct marketing processes – can people opt out?; z a ppoint a Privacy Compliance Officer; and z e ducate and train staff on the new privacy obligations.

Alison Baker, Partner, Hall & Wilcox Ph: (03) 9603 3568 E-mail: alison.baker@hallandwilcox.com.au

VCAT LOWDOWN A change to the legislation governing the Victorian Civil and Administrative Appeals Tribunal (VCAT) which came into effect on June 1 has had tenants gaining media traction with their concerns it will disadvantage those who lose against their landlords at the tribunal. Tenants have been concerned they will have to pay the other party’s costs if they lose. But REIV’s corporate solicitor Peter Lowenstern said while the change means losing parties may be ordered to reimburse the fees of the successful party, each party will continue to pay its own costs. Lowenstern was consulted after member queries in the wake of media

coverage of Tenants Union of Victoria complaints. The union told AttorneyGeneral Robert Clark the VCAT Amendment Act was a switch to a user pays system. However, Lowenstern advised that while the amendment introduced a presumption that an order for reimbursement of fees would apply in proceedings under the Residential Tenancies Act 1997, with VCAT able to order otherwise, it did not apply to costs. The fee for proceedings under this legislation is $44.90, except in relation to part 10, relating to bonds, which is free.

The Estate Agent ❘ July 2014

Best Practice

A tricky business sorting chattels from fixtures Vendor checklist form can help ensure disputes are avoided

hen is a chattel a fixture? This is a vexed question faced by many agents when a property is settled and disputes arise between vendor and buyer over what stays and what does not. With agents reporting vendors occasionally removing everything from fireplaces and built-in speaker systems to digging up prized rose bushes, REIV member councillor John Keating prepared a discussion paper for the council on this tricky topic. He warned: “The chattels versus fixtures debate is a very grey area of real estate law.” Keating said vendors’ obligations were covered by clause 24 of the General Conditions of Sale specified in the Estate Agents Act 1980 – in particular, clause 24.2, requiring the vendor to deliver the property to the purchaser in the same condition it was in on the day of sale, fair wear and tear excepted. The contract usually requires vacant possession, with the vendor removing all chattels not specifically nominated as sold with the property.

“The issue of chattels often involves a dispute at settlement, a chattel generally being defined as being any personal property that is a movable and tangible article,” Keating said. “If a chattel is annexed to the freehold (land) it may lose its status as personal property and become a fixture, and its ownership then rests with the owner of the land.” This can be complex, with technology adding to the complications. For example, a freestanding fridge

would be a chattel, but some of the latest fridges are plumbed in and would likely qualify as a fixture. Similarly, a wired-in sound system versus a freestanding stereo. Outdoor furniture resting on a deck would be a chattel, but furniture bolted to a deck would be a fixture. “If a chattel is fixed to land, by any means other than its own weight, prima facie it is a fixture,” Keating said. “If the removal of a chattel causes any damage, even a screw hole in the wall or a hole in the ground, it could be regarded as a fixture.” It is essential for vendors and purchasers to record what is included and excluded from the sale, or to include special conditions in contracts to try to avoid disputes at settlement. Keating recommends agents “err on the side of being thoroughly pedantic” about what is and is not included. He suggests applying the following simple test: “If the property could be tipped upside down and shaken, if an item would fall off, it’s a chattel. If the item would stay attached to the property, it is a fixture.” REIV has a vendor checklist form which, if adequately completed by the vendor, is a useful aid to a problem-free transaction. Keating says this applies to both the condition of the property and items being sold with it.

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The Estate Agent ❘ July 2014

Oc,Presentation opo

It’s how you say it, not what you say that gets results Body language is crucial to building rapport with potential clients

hether it is notes on a pad or a full script learned and rehearsed, most agents have spent an evening planning what to say to an important client. But does that include thinking about how to stand, where your hands will be and how to hold your shoulders? If not, it should, says body language expert Julie-Anne Black. After all, body language researchers have discovered there’s more than a grain of truth in that tired marketing phrase: it’s not what you say, it’s how you say it. More than 90 per cent of our communication is non-verbal – more than half based on body language, almost 40 per cent on the tone of our words and just 7 per cent on what we say, according to the late American anthropologist Ray Birdwhistell. “If a real estate agent did not know the buyer but was trying to tell them this is a fabulous house, they might be saying it with a tone the buyer would not believe,” Black says. “So they are already breaking rapport. Body language is all about building rapport with another person.” So how do we know whether our body language is wrong? “It’s about communication ... If you are not getting the responses you want, then something is off,” Black says. A former television producer, Black lived what some would regard as a dream life, but she found she was on an emotional roller-coaster. “I wanted to do something about it and hungered to have a voice of influence and be confident,” she says. Years of studying the functioning of the mind followed and now she travels the world running dynamic training courses. Black runs courses at Melbourne’s CAE and says most enrol because they want to be able to read others. But they leave after a journey of self-discovery, because “being comfortable in your

‘If someone wants to be happy and confident the best thing they can do is stand upright, put their shoulders back, their hands by their sides, smile and look a person in the eye’ own skin and projecting yourself with confidence and ease is what body language is about”, she says. That means working on body language by working on feelings and emotions, rather than trying to artificially create an impression. For example, Black says an agent needs to have happy, open, welcoming body language. “If someone wants to be happy and confident the best thing they can do is stand upright, put their shoulders back, their hands by their sides, smile and look a person in the eye.” But that may be difficult if you are feeling down or uncertain, so to

become more confident, Black has this tip: “Remember a time when you were happy and confident, see what you saw, remember how you felt and allow your body language to reflect those feelings.” Clients judge us on body language, even if we don’t realise it. Change the thought, change the feeling and the body language will change too. Julie-Anne Black is an international speaker, author and founder of Be Brilliant Now, which shows emerging leaders how to present themselves with superstar appeal. See www.bebrilliantnow.com for more information and course details. The Estate Agent ❘ July 2014

Obituary

Remembering an industry mentor and pioneer

hen Germany invaded Poland in 1939, nine-yearold George Kerry’s life changed forever. George, born Jerzy Kiryczuk, in Baranowicze, Poland, lived with his mother and brother through the occupation, while their father, a Russian Orthodox priest and army chaplain, was held prisoner in Hungary for three years. The family was eventually able to flee to American-occupied Germany where George drove trucks for the Americans before, at 19, following his brother Alexander to Australia. Here, he was to make a life in real estate. When he died on February 17 at 83, he had been an REIV member for more than 50 years. After fulfilling his two-year immigration contract by working on the South Australian Railways, George settled in Melbourne, encouraging his parents to immigrate. He worked in real estate for EW Hales, making such an impression that, more than 60 years on, the family of his first boss sent flowers to his wife Sika when he died. Three years after starting in real estate in 1954, George opened his own Yarraville agency George & Company. It would become a family business: his wife, a social worker, was also a director and obtained her licence, as did son George Jr who worked in the business for 23 years. Daughter Natasha is a valuer. The agency at 98 Somerville Rd was one of the first in Yarraville, in the days when it was a working-class suburb without today’s cafe culture and gentrification. George was to open other branches, including in Northcote and Strathmore,

The Estate Agent ❘ July 2014

George Kerry leaves behind a legacy of honesty, advice and a love of real estate

‘He was a valued mentor to young agents who have since forged their own successful careers in real estate’

George Kerry April 10, 1930February 17, 2014

but Sika says his love of real estate, for dealing with people in an honest and friendly way meant he preferred to run his own small show rather than leave others in charge. The first migrant to become president of a branch of the REIV-forerunner RESI (Real Estate Stock Institute) – George was twice president of the Western Suburbs branch. REIV chief executive officer Enzo Raimondo says George was an REIV pioneer and made an invaluable

contribution to the industry he loved and to which he devoted his life. “He was a valued mentor to young agents who have since forged their own successful careers in real estate.” George died just a few months before his 60th wedding anniversary. He and Sika built a hilltop home in Pascoe Vale South soon after they married in November 1954. They met in church when Sika was just 15 and, after an 18-month engagement, were married by George’s father. In 1968 the couple and their children moved to West Footscray to be closer to the agency. With his wife the first woman elected to Footscray Council, George became an active supporter of her extensive volunteer work. His passions included skiing – he still skied in Australia and overseas in his 70s – chess, bridge, fishing, and soccer. But his family says his main passion was his four grandchildren: 30-year-old Michael, twins Catherine and Charles, 21, and Marina, 16. Today, George & Co is Nicholas Scott Real Estate. It was taken over in 1997 by Nicholas Skapoulos, who had started with the business 10 years earlier and was one of those young agents mentored by George in the industry he loved.