Reference no: EM131217544

Sell and finalise the sale of property by private treaty

PART A - Oral questioning and learning activities

You have been asked by your Sales Manager to give some advice to a new salesperson that only started working with the business this week. The new salesperson asks you the following questions. In detail, how would you respond to them?

Please consider and complete the following tasks in the space provided. The assessment tasks in Part A may also be assessed verbally by your trainer or tutor as part of your progressive assessment of competence during contact classes or as part of your distance education tutoring. The assessor will indicate in the right hand column if your response is satisfactory as a guide.

Question 1: As an agent why do we qualify buyers?

Question 2: The agent has been showing properties to a mature couple. They want to find a home that can accommodate visits from their adult children and grandchildren. They also need two-car accommodation as they have just purchased a campervan. The agent takes them to a home that has all of their preferred requirements.

However, they end up buying a property which has three bedrooms, a rumpus room and one-car garage in a beautiful beachside suburb which appealed greatly to the couple. Discuss how the family's needs and wants might have affected this decision.

Question 3: You have a new buyer from out of town who has made an appointment with you to inspect three of your listings (all units) at 4.00pm. You compile a list of properties to show the buyer. Discuss how you would arrange and conduct the property inspections.

Question 4: Later in the week you are working with your new colleague and they ask you for some advice, following some team training that you were both involved in. They ask;

What does "closing" mean and when should an agent be "closing" a customer (buyer)?

Question 5: You are in the middle of a property inspection with a buyer. They have indicated to you that the property you are showing them is absolutely ideal. However, they are concerned about its proximit to a train line.

Identify the type of situation you are in and explain how you would handle this situation.

Question 6: You have successfully negotiated a contract of sale. Now it is signed and completed by all parties your office is required to provide the clients with an account of sale. When they receive it from your office, the clients ask you to explain what it is for. Explain how you would respond to this.

Question 7: The clients also ask what a balance of deposit is as they notice this on the account of sale you provided them. How would ou explain this to them?

Question 8: During the sale of a different property, when you are presenting an offer to a buyer for them to sign. they ask you to explain what a contemporaneous settlement is? How would you explain this to them?

Question 9: Explain when you, as an agent, would be able to draw commissions from the Trust account for a sale? What do you need to consider before drawing commissions from Trust monies?

Question 10: A buyer has just come to your office and is anxious to move into their new home that settled at 3 pm this afternoon. The buyer's solicitor has already notified you that the settlement has been finalised and that the buyer will be coming to the office to collect the keys. Explain what an agent ;needs to consider before handing over keys to the buyer in this situation.

Question 11: As a salesperson, you have just had a buyer sign an offer (on a proposed relevant contract) and they have paid you a deposit, as per the terms of the offer. What must you do with this deposit and why?

Question 12: It's Monday and you are in the process of reviewing the feedback of an open house you conducted over the weekend. You need to prepare the information and present it to your client. List and provide a brief explanation of three (3) items of feedback you would want to discuss with your clients.

Question 13: A buyer and seller have agreed (and signed) all terms of a contract of sale. Now the contract is formed, the buyer asks you what allows them to inspect the property prior to settlement and also whether they are responsible for any insurance on the property before settlement. Explain how you would respond to this query.

Question 14: You are about to send the buyer and seller a copy of the contract now you have had both parties agree on its terms. Who else should you send the paperwork to and why?

PART B - Short answer section

Please consider and provide your responses in the space provided. The assessor will indicate in the right hand column if your response is competent.

Question 1: You are showing a buyer through a property and they ask you when does a contract of sale become unconditional as they overheard you use this term earlier in the inspection with another 1 buyer? Explain your answer.

Question 2: In a multiple offer situation, an agent must ensure that all offers are submitted to the seller for consideration. Outline the steps for dealing with multiple offers (8 steps required).

Question 3:  A buyer wishes to make an offer on a townhouse and signs an unconditional contract for $300,000. The agent meets with the seller who, after some consideration, decides to accept the 3 offer and signs the contract.

Because the contract is signed late at night, the agent feels it is unnecessary to disturb the buyer to inform her of the good news. Is the contract binding? Identify the risk associated with this situation.

Question 4: A contract has been formed between a seller and buyer through your office. The buyer contacts you asking for an extension of time to the settlement date. Should you refer the matter to the solicitor? Explain your answer.

Question 5:  Whilst showing a buyer through a property can you, as an agent, withhold information from the buyer that could affect their decision to purchase the property? Explain your answer.

Question 6: A buyer approaches you wanting to put an offer on a property. They advise that they do not wish to pay a deposit as part of the terms of offer. Are they able to do this by law? Explain your answer.

Question 7: You have been given a notice disputing entitlement to a deposit you are holding in trust. In accordance with the Agents Financial Administration Act what must you consider and how would you handle this situation?

Question 8: You are reviewing how your agency records information relating to a contract of sale. Would you recommend recording information about the contract of sale on the front cover of the contract file? The support team thinks this is a great idea as it makes it easy to access the information. Explain ;your answer.

Question 9: You have shown a buyer through some properties but they haven't found anything they want to purchase just yet. Identify and describe 4 ways you would keep in touch with them.

Question 10: You have been appointed to sell a tenanted residential property. Your agency is not managing the property. The tenant has been notified of the Lessor's intention to sell via the RTA Form 10 by the managing agent.

Prior to you showing a prospective buyer through the property what do you need to? Your answer should include the statutory form that is required to be issued to the tenant.

Question 11: You have just completed an open house. How would you update your client of the results of the open house? Your answer should identify 3 communication methods.

PART C - Case study section

Please consider and provide your responses in the space provided.

Case Study information

Sellers background

The property is currently owned by Lloyd and Thelma Brown who have recently retired and both in their mid-70's. The home has been the Browns family home for 50 years and has been maintained to a superior standard until the last few years. The Browns have decided to sell the property as the upkeep and general maintenance is becoming too big of a job for the both of them.

The Browns have decided to move to a retirement village on the northern coast of New South Wales but are not in a hurry as the villa they have purchased will not be completed for 6 months.

Your CMA reveals that the property falls into a price range of $850,000 to $900,000. The Browns decide to list the home for sale exclusively with your agency at $910,000.

Suburb background

The area is upwardly mobile and appeals to young professionals and investors who like to renovate older homes. The area is also one of the region's best performers in capital growth over the last 3 years. It is well located to the city being only a 10 minute drive to the heart of the CBD in peak hour. Train, bus and water transport across the river is also very handy to this particular property.

The street that this property is located in is quiet and generally comprises of homes that are being renovated or have been recently renovated. The suburb also has a wide variety of shops, restaurants and a nearby supermarket.

Prospective Buyers Background

Kyle and Rebecca Casper have recently sold their property and are now searching for a new home. Since selling their property a couple of months ago they have decided to rent an apartment to allow them time to find the right property. They have been looking in a number of inner city suburbs as they need a property that is no more than a 15 minute commute to the CBD.

Kyle is a solicitor and Rebecca is an accountant based in the same company. They have already checked suitable finance packages and have indicated that they can purchase a property up to the amount of about $870,000.

The Casper's are very educated with current market trends as they have been researching for a little while now. They are conscious that they may have to invest additional money into a property for renovations to buy a property in the area that suits their lifestyle needs. If needed, they have indicated that they would be willing to spend another $20,000 to $25,000 on renovations.

Question 1: Describe the preparation you would undertake 24 hours prior to conducting an open for inspection of a property that you have listed.

Question 2: The Smiths are concerned about the security of their home during an open for inspection. How can you reassure them that the open for inspection will be well controlled?

Question 3: The Smiths have asked you to hold an open house for 3 hours, believing that this will attract more buyers to inspect. How would you respond to this request?

Question 4: Before you can gather information from people at an open house, by law what information should you be providing them first and why?

Question 5: If a visitor refuses to give you their details, should you let them into the property? Explain your answer and describe what you would say to try and overcome their objection.

Question 6: You meet the Casper's at an open for inspection you are holding on the Brown's property. How would you greet them at the property, what would you ACTUALLY say to them and what questions would you ask?

Question 7: Later that day the Caspers phone you and ask if they can meet you back at the Brown's property as they would like to have another inspection.

It is very important to find out as much as you can about the Caspers so that you can establish their motivation, their ability to purchase, and what properties to show them.

Identify the five (5) essential qualification elements that you should discuss with the Caspers to determine their buying situation.

Question 8: You observe the Caspers discussing how they would furnish the living area and where they would construct a large entertainment deck.

Question 9: The Casper's are definitely interested in the home.

However, before they commence negotiating they want to look at other properties in the area to make sure there is not something in their price range more suitable. They ask you to show them other properties.

Question 10: During your earlier discussions with Kyle and Rebecca Casper, they mention they are renting a unit and their lease still has 4 months to run and therefore are in no hurry to do anything.

Lloyd and Thelma Brown have decided to move to a retirement village on the northern coast of New South Wales but are not in a hurry as the villa they have purchased will not be completed for 6 months.

The Casper's suggest that if the property is still available in a couple of months time, they might put an offer on it.
In the best interest of our client (seller) to get a contract today what would be a viable solution to suit both parties needs?

Question 11: After some discussion, the Casper's wish to offer $860,000 subject to finance and the terms of settlement suggested by you previously.

Your initial discussions with the Browns lead you to believe that your clients may not accept the offer of $860,000.

What should you attempt to do with the Casper's offer before presenting the offer to your client? What could you encourage the buyers to do?