课 cppdsm4014a market property for lease

____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

CPPDSM4014A (Elective) Market Property for Sale

Learner Guide © The Australian Salesmasters Training Co Doc ID: CPPDSM4014A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e |1 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\17. CPPDSM4014A\CPPDSM4014A - Workbook (L) eLearning.docx

____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Contact Page

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

Phone: Fax: Email: Mail:

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

www.thesalesmasters.com.au

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____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

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

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____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Table of Contents

Contents COURSE DESCRIPTION ......................................................................................................... 5 LEARNER ACTIVITIES ........................................................................................................... 7 ELEMENT 1 – DEVELOP MARKETING PLAN FOR PROPERTY ................................................... 9 ELEMENT 2 – CHECK MARKETING MATERIALS.....................................................................38 ELEMENT 3– IMPLEMENT MARKETING ACTIVITIES ..............................................................47 ELEMENT 4 – REVIEW AND REPORT ON MARKETING ACTIVITIES AND PLAN ........................52 CONCLUSION .....................................................................................................................55 ACTS LEGISLATIONS AND FORMS .......................................................................................56 OUR MOST SOUGHT AFTER PRODUCTS AND SERVICES .......................................................66

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____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

CPPDSM4014A Market Property for Sale Course Description This unit of competency specifies the outcomes required to market all types of property and businesses for sale. It includes planning, developing a marketing plan, preparing marketing materials, implementing marketing activities, and reviewing and reporting on marketing plans and activities.

The unit may form part of the licensing requirements for persons engaged in real estate activities in those States and Territories where these are regulated activities.

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Reference list Helpful Websites www.fairtrading.nsw.gov.au Office of Fair Trading – legislation www.reinsw.com.au

Real Estate Institute of NSW

www.reia.com.au

Real Estate Institute of Australia

www.bestpractice.com.au

Advice and information from Robert Bevan

www.accc.gov.au

Australian Competition and Consumer Commission

www.abs.gov.au

Australian Bureau of Statistics

www.austlii.edu.au

Australian Legal Information Institute – legislation, case law etc.

www.domain.com.au

Promotion and advertising, links to agents

www.realestate.com.au

Information and links to agents

www.property.com.au

Information and links to agents

Relevant legislation: Property, Stock and Business Agents Act 2002 and Regulations 2003 (NSW).

Crimes Act 1900 (Commonwealth).

Privacy Act 1988 (Commonwealth).

Trade Practices Act 1974 (Commonwealth).

Residential Tenancies Act 2010 (NSW).

Antidiscrimination Act Work Health and Safety Act 2011 Fair Trading Act 1987 (NSW)

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____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

Learner Activities Activity

Page

1. Buyer profiles

20

2. Vendor paid advertising

25

3. Property types

28

4. Property inspection

40

5. Property features and compliance with advertising

48

6. Tracking advertising

55

7. Database marketing

56

8. Advertising

57

9. Presentation turn offs

58

10. A.I.D.A Principal

59

11. Advertising advantages/disadvantages

62

12. Property difficult to sell

63

13. Marketing information reporting

64

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____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

ELEMENT 1 – DEVELOP MARKETING PLAN FOR PROPERTY Element of Competency Element 1. Develop marketing plan for property.

Performance criteria 1.1 Potential buyer profile and benefits of effectively marketing property for sale are discussed with seller.

1.2 Strategies and timeframe for marketing property, including possible marketing activities, are discussed with seller.

1.3 Costs of different marketing strategies and activities are discussed with seller.

1.4 Marketing plan for property is prepared and presented to seller in line with agency practice.

1.5 Marketing plan, including marketing activities and budget, is agreed with seller.

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____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

ELEMENT 1 – DEVELOP MARKETING PLAN FOR PROPERTY Introduction Marketing-this is the way we attract a client to our product; a vendor to our agency or a buyer to a property for sale. The process itself is very visible and therefore transparent. Our agency marketing can easily be criticized by the client if we get it wrong or produce a mediocre promotion of property. Some members of the community can even hold a mistrust of marketing; considering it to hold some “trick” aimed at influencing them.

With these points in mind the marketing process the agency follows must uphold all impacting legislation and have a positive impact on the client.

Marketing is our communication from the agency to the market consequently we must ensure the message we are communicating is: Appropriate to our market Reaches our target market Upholds legislative requirements Adheres to ethical standards and agency practice

Marketing as part of our business plan Marketing requires our business to be able to identify who are our potential clients and what is the range of their requirements and expectations. Once we have identified this we can tailor our service and marketing methods to their individual situation. This results in a suited marketing plan to achieve their needs and expectations which in turn leads to a satisfied client. Client satisfaction is the key to our agency business, from here the flow of reputation and referral business originates. The agency must remain focused on “what the customer wants”, in other words be “market driven” so that our products and services are designed with the customer in mind. These issues highlight that marketing is about our clients and customers.

It is through this process that marketing is positioned within the agency business plan.

Marketing is the process from planning, pricing and promotion of not only property but also our agency services which will transfer property from seller to buyer whilst also satisfying our business objectives of growth and profit.

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____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

DEVELOP MARKETING PLAN FOR PROPERTY In line with agency practice, our aim is to achieve the highest rental or potential sale price for our client in the current market and together with appropriate pricing the most suitable method of leasing or sale, the marketing is critical to achieve this aim. Competition from the tenants or buyers in any market circumstance, whether boom times or not will work hard for the lessor or vendor to help them achieve their best price. Our marketing plan will focus on attracting the correct match of tenants or buyers in as great numbers as possible.

In consultation with our lessor or vendor we will develop our strategy and timeframes to market the property most successfully, that is attract the highest achievable interest from the tenant or buyer pool in the market at that time, this is our marketing aim for the lease or sale.

Prior to developing the marketing plan we must: Familiarize ourselves with the property, its features and benefits.

The second step is to identify the target market, who will this property appeal to? What is the profile of the tenant or buyer who will be attracted to this property?

Until we accomplish these steps, the marketing plan will not have achieved its relevance to the property or the circumstances of the lease or sale. For example, in the situation of a property lease or sale instigated due to an urgent job transfer and the family home must be leased or sold, the marketing plan will consider electronic advertising as a method of advertising or auction as a method of sale and the advertising will focus on the features the home offers which another family will relate to as benefits for them such as the rumpus room, in-ground pool, 4 bedrooms and the 3 bathrooms all located walking distance to the local schools.

Buyer Profiles and benefits of effectively marketing property for sale discussed with seller Tenants and buyers are a diverse group; they will source from a range of different social, economic and cultural backgrounds as well as varying physical and mental abilities. These factors influence their property needs, hence it is important to tackle each tenant or buyer as an individual, and each tenant or buyer can be approaching the same property with a different “mind set� or from a different angle.

The agent can be marketing a property which may cross a range of interesting tenant or buyer profiles. For example, a careful first home buyer or an analytical investor who both match the property being promoted but identify with the property on different levels. Each buyer may place a different degree of importance on the features of the property e.g. the fact that the property is on a sizeable block (feature) may be viewed as a benefit for the first home buyer as a secure play area for future children whereas the investor sees it as possible redevelopment but both are anticipating future investment growth from the land size.

It is critical that the profile of the tenant or buyer is analysed to ensure our marketing attracts them and reaches them.

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Buyer Profile We will discuss five (5) different buyer profiles and the investor profile.

•

Double Income no kids

•

Single Income no kids

•

Empty Nesters

•

Aged Retirees

•

Parents with kids who won’t leave home

•

Investor Profile

DINKS THE DUAL INCOME, NO KIDS (DINK) LIFESTYLE GAINS POPULARITY

By Caroline Bach The 'childfree by choice ' lifestyle has a funny nickname -- DINKs. It stands for "dual income, no kids." A term coined in the 1980s, the name and the lifestyle may be gaining more and more popularity now. Laura Portz of Fitchburg, started the DINK lifestyle when she married her husband, Austen, three years ago. "We're first time homebuyers for a couple of years now," says Laura. Besides their home, they've also been able to make some more fun purchases, since they're not spending money on kids. "We like toys! We like the boat. We like motorcycles," says Laura. "We just got back from a trip to Mexico in March which was a lot of fun."

For another DINK couple, their opposite work schedules mean a quieter DINK lifestyle for Shannon Tervo and Jason Weiss of Madison. They do enjoy opportunities to have dinner together, just the two of them, and go on trips to concerts and music festivals. "We like to go to live music events and we've been to quite a few. We've still got a few more coming up," says Jason.

"We can leave for three days and it's fine," says Shannon. "You don't have to make arrangements for anyone, but yourselves," agrees Jason.

More and more couples are choosing to wait to have children, or not have them at all. According to the U.S. Census Bureau, in 2014, 47.6-percent of women ages 15 to 44 had no kids. That is the highest percentage since the Bureau started keeping track in 1976.

"The biggest difference [between DINKs and couples with kids] is finances and time," says Crystal D'Orazio, a licensed marriage and family therapist in Madison. She sees all kinds of couples; plus, she and her husband have three kids. "I definitely feel the stress," says D'Orazio. "Couples that have kids, often it costs more money. They don't have as much time together."

Our DINK couples have chosen one of the best places to spend their time together.

Estately.com, a website with home-buying advice, rated Madison the 13th best city for childfree living. "There's so much to do. There's so much activity life and groups and organizations and things for DINKs to get involved in, and so I think Madison is definitely a great place for that," says D'Orazio.

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____________________________________ CPP40307 Certificate IV in Property Services (Real Estate)

For Laura though, the DINK lifestyle may not be the be all, end all. "When the questions like, 'when are you going to have children, are you ever going to have children?' come from those closest to us, it is a little bit frustrating," says Laura. She and Austen have been feeling the pressure to expand their family, while Jason and Laura are content as is. "I just never wanted to be a mom, and I think I always knew that," says Shannon. "It's a very overwhelming concept," agrees Jason.

D'Orazio has some advice for anyone who is thinking about having kids. "I want them to look at, what's it going to look like with a financial restraint, how are we going to manage extra stress? Who's going to do what task? How are we going to try and tackle the day to day, routine activities in the household? I really want people to be on the same page and feel like they're making the right decision together," she says.

While DINK couples may appear to have it easier with more time, money and energy for each other, numerous studies have shown, they actually have a higher divorce rate

SINKS Are you a SINK (Single Income, No Kids)?

By Erin Wright

I'm sure that I'm not the only one who has noticed that this demographic seems to have expanded over the past 10 years. SINKs, male and female alike, seem to be getting older and less inclined to become DINKs (Double Income, No Kids), and yet, they are still the least likely to seek financial advice. In fact, according to ASIC's Access to Financial Planning Report (Report 224, Dec 2010), only 29% of those who had seen a Financial Planner were aged 18 24. And if you fall into the category that hasn't sought advice, you should be worried. Let me tell you why.

The SINK in their 20s: As a SINK, you are finalising your further education, be that a trade or a University Degree.

Generally, you have started down the road to independence, and are enjoying the ability to do what you want, when you want it, and how you want to. It's a heady combination, I'm still young enough to remember it (it's a bit fuzzy, but it's there), and the last thing you are thinking about is your future. You're busy trying to make your 20s work for you. Establish your career, find a partner, travel, in whichever order you like, and just generally enjoy life.

The future is limited to the next six months rather than ten years. And yet the next ten years are the most important to setting yourself up financially. If you are a SINK, you have a golden opportunity. You have, for the most part, no financial commitments, no preconceptions of the standard of living and no health problems. This is the best time to see someone like me, to help you work out what you want your life to look like at the ten year mark, while you're still living the dream.

The SINK in their 30s What if, after all that study and hard slog, you find yourself in your 30s and hate your job? No problem, because you were smart enough to see me in your 20s and have an asset base to draw on to switch careers. Ladies, what if that white knight hasn't turned up? All of your friends are now entering the DINKs (Double Income, No Kids) phase or, even worse, are expecting their first bundle of joy. Where does this leave you? Are you going to be alone forever? Financially, I've got you covered. I already thought of this scenario while you were Contiki touring Europe five years ago, and you are well on way to being a financially independent woman who needs no man.

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Gents, you're an all round awesome guy, have a stable career and then there's that asset base we've worked hard to build and protect for you. You, Sir, are a great long term catch. So, you give me a call and let me know that there is a special someone you want to bring to your next appointment, you're thinking of asking her to move in. Woah...serious stuff, and she thought meeting your Mother was going to be tough. Don't worry Buddy, I've got your back, let me do the hard talking (#co-habitationagreement #comeoutsmellinglikeroses).

So, my message is this; don't be that 35 year old complaining about how "they didn't think their life would end up like this". No one wants to be that person. And, although life does throw curveballs, being proactive about your finances will put you ahead of the pack and, at the very least, speed up your recovery time.

EMPTY NESTERS Think twice By Jessica Karl I can’t decide whether millennials are lazy or brilliant.

The Pew Research Centre reported a record number of millennials who are living at home compared to those living with a spouse or partner. In 2014, 32.1 percent moved back in with their parents compared to 31.6 percent who are living with a romantic partner.

Now, don’t get me wrong, surely there are some appeals of living in your parent’s basement.

Namely, it’s free. Adios electricity bills, Wi-Fi installation fees and plumbing expenses. At your parent’s house, they do that stuff for you.

Along with this, you don’t have to consume mass amounts of frozen pizza every evening.

Instead, your taste buds can swoon over mom’s new recipe for shrimp tacos.

There’s milk in the fridge with an expiration date that hasn’t passed yet.

There aren’t any mysterious crumbs lying on the floor because your cleaning lady has this thing called a vacuum. It’s a miracle.

But along with living a “free” life you’re back under your childhood roof, which means you can’t come home at 5 a.m. parading your newest group of gal pals around your living room that’s chock full of your mom’s favourite crystal figurines.

You can’t stack all of the wine, vodka, tequila and whiskey bottles you’ve consumed on top of your kitchen cabinets because oddly enough, your cabinets reach the ceiling and you don’t want your father sitting you down to have a chat about when the church’s next AA meeting is.

We 20-something-year-olds haven’t had much direction in our lives since Zayn decided to do his own thing.

Maybe living with our parents is a way to claim back that security. Or maybe we’re just saving up a little bit more cash so that when we purchase our first apartment, we don’t have to call rodent control every two weeks to get rid of the rat that seems to think the heating vent is its own condominium.

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In addition to our own flagrant display of inadequacies, living with our parents might in part be owed to the maleficent world of modern dating.

Young adults between the ages of 18 and 34 would rather curl up in the foetal position on the tiny twin bed they’ve been sleeping on for years than create a dating profile on Match.com.

It’s common knowledge that dating in this day in age is seriously messed up. Romance consists of awkward sex in some stranger’s room that’s dimly lit by an episode of “Bob’s Burgers” playing in the background.

People don’t date each other in fear of commitment. The word “marry” is largely out of the question until one’s received at least five promotions and has thought out their entire retirement plan. It’s a weird world we live in.

Clearly Lil Wayne didn’t teach us enough about how to love.

Either way, if you’re scoring a home run with a partner, or never even hitting because you’re stuck on home plate, sooner or later, we’ll all end up in the same place.

So what are the benefits for the “Empty Nesters”?

The reduction or elimination of your mortgage – Depending on where you choose to buy your new property, downsizing can dramatically reduce mortgage expenses. Smaller homes cost less to run, freeing up cash flow and giving massive savings on interest over the term of your mortgage • Larger nest egg - Increase your retirement savings with the money you save on your mortgage • Greater freedom to travel • Cheaper utilities - Lower electricity, gas, heating and cooling expenses • Greater freedom – more freedom to explore and revisit activities and hobbies that you may not have been able to enjoy when you were busy maintaining gardens and a larger house • Lower maintenance costs – If you opt for an apartment or townhouse, you’ll lighten your load significantly • Peace of mind - Less clutter and less or no debt will lead to a clearer state of mind and give you the opportunity to enjoy a new, simplified home and lifestyle

AGED RETIREES Smart Reasons to Start Renting in Retirement You may have long pictured homeownership as a cornerstone of your retirement. But baby boomers are increasingly renting instead. From 2005 to 2015, the number of renters ages 60 Doc ID: CPPDSM4014A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 14 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\17. CPPDSM4014A\CPPDSM4014A - Workbook (L) eLearning.docx

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to 64 nearly doubled, rising from 1.3 million households to 2.5 million, reports Harvard University’s Joint Center for Housing Studies.

Though the longer you live in a home the more likely it is that buying beats renting—taxes and upkeep, for one, are probably lower than the rent you’d pay—there are times when renting is the way to go.

You’re restless Want to buy a home in your favourite vacation spot? The idyllic weeks you’ve spent there may not give you a realistic sense of what life is like year-round, warns University of Cincinnati real estate professor Michael Eriksen. Orlando’s 70°F winters, for example, might not be worth its humid 90°F summers. You could end up as what some real estate agents call half-backers— retirees who move a second time, to a place partway back home.

Trying out your new town by renting will save you money and headaches. “Real estate can have huge transaction costs,” says Eriksen, like the typical 5% brokerage fee. “You don’t want to pay it twice.” You want the extra cash Selling the family home and investing some (or all) of the proceeds can help pad your savings—and provide peace of mind, says George Gagliardi, a financial planner in Lexington, Mass.

Calculator: Should I rent or buy a home?

Yes, you could tap home equity via a reverse mortgage. But selling would supply more upfront cash. A 65-year-old with a $300,000 mortgage-free home could net $275,000 from a sale; a reverse mortgage would free up only $150,000, according to the industry site ReverseMortgage.org. You’d have to tap some of your proceeds to rent a new place, but the extra long-term cost of renting might be worth the comfort of more cash on hand.

You want convenience Sick of raking leaves? Don’t want to deal with peeling paint? Renting lets you off-load such chores, points out retirement author Sally Abrahms: “It’s not your problem anymore.” A rental in a multiunit building can also include amenities you’ll value more as you age, such as an elevator and a doorman.

Rental property developers have started catering to older customers, says Chuck Ehmann, an economist at real estate data company Axiometrics. The result: buildings that include a greater number of larger two- and three-bedroom units, as well as aging-friendly perks like door-to-door package delivery and trash pickup. Says Ehmann: “Some properties have maid service and restaurant delivery.” You don’t have to own your castle, it seems, to be treated like royalty.

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PARENTS HOUSING KIPPERS The rise of the kipper children, sucking your wallet dry JANINE STARKS Half of British kippers do no food shopping, half pay no rent and 84 per cent of parents are still doing their laundry.

It's a chuckle-worthy turn of phrase and reminds us not to outstay our welcome. But what if those fishy visitors are your own kids? The adult variety.

The boomerang generation of Peter Pans has attracted many labels. Their numbers are spreading through families in a viral fashion.

The British say almost half of 20 to 24 year olds live at home and a fifth of 25 to 29 year olds.

The United States numbers show almost a third of 18 to 34 year olds are still under the family roof.

In keeping with the fishy origins, it seems "kippers" are on the rise. Kippers? Yes, you heard it correctly. Some wag has come up with Kids In Parents Pockets Eroding Retirement Savings. It's even better than generation app – Adults whose Parents Pay. The worst offenders in the world seem to be the Italians with a reported eight out of 10 men aged 18 to 30 living with their mammas.

Unfortunately the researchers Manacorda and Moretti don't give us the stats on women, but Britain's Office of National Statistics reports twice as many male kippers than female kippers.

The Italians call them 'bamboccioni'. No, that's not a type of mozzarella. It means big babies.

Interestingly, the Italians report parents are happier when living with their children – the opposite of British and American parents. The experts found they buy love in exchange for their children giving up some of their independence.

The cultural quirk has led to cohabitation causing lower employment levels and lower lifetime satisfaction for young Italians.

A British survey (thinkmoney.co.uk) unveiled a few more slightly whiffy statistics. Half of British kippers do no food shopping, half pay no rent and 84 per cent of parents are still doing their laundry.

THE CAUSE OF THE KIPPER While the mnemonics and numbers make for much amusement, there are many serious reasons behind the rise of the kipper.

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Student debt, housing affordability and the high cost of living, are the obvious. Some parents have a streak of Italian and truly love cohabiting. Some are well off and get satisfaction from helping financially.

Whatever the reason, both sides need to bear in mind the financial and social impact they have on each other's lives.

THE COST OF A KIPPER If you're a Kiwi kipper think carefully about what impact you are having on your parents KiwiSaver. It's likely they're getting close to 50 years old. Those last 15 years of saving are vital in retirement. It's a time where savings must be turbo-charged.

Even being in the house and paying your own way impacts their financial decisions. They could downsize and invest excess equity. Everything comes at a cost.

US researchers calculated the annual cost of a kipper at US$2300 a year (NZ$3500).

That sounds lightweight compared to some of the stories you hear. The marginal cost of keeping an additional adult in the house would easily reach that figure, let alone the titbits kippers are given.

Numbers like that probably won't induce much guilt, but multiply it out. If you live at home from age 18 to 28 and add on compound interest of 3 per cent, your parents KiwiSaver could have been $64,000 plumper. Even a lightweight kipper creates a big splash.

It also seems a kipper doesn't need to live at home. In another phenomenon many parents are still paying bills for kippers living downstream.

British supermarket Tesco sells mobile plans and found 35 per cent of parents still pay their child's phone bill when the little kippers were earning over ÂŁ50,000 a year (NZ$108,000).

Mind you, it's easily done. Those automatic payments are all mixed up with other bills and kippers can't help their accidental silence on the matter.

TO CHARGE OR NOT TO CHARGE The arguments for giving free rent to kippers will turn you in circles. For the sake of family relationships, make them pay.

It doesn't need to be a market rate. If you are well off, still make them pay. Stick it all in a separate account and give it back when they float off if you like. There is no crime in being generous.

It is a little unfair to solely poke fun at kippers. After all, many parents are the cause of their own issues.

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Just to even things up, lets create a new label. The ploncers: Parents Letting Offspring Not Contribute Eroding Retirement Savings. Best pronounced as 'plonkers'.

Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views. They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.

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INVESTORS Rental Property Investing for Beginners: Smart Tips to Take Your First Financial Step Forward John Golden Properties is one of the best ways to begin accumulating wealth. You not only build equity in the properties you own as you pay them down, but if you work your numbers right, you should also be generating some positive cash flow each month. However, like any other type of investment, there are some things you need to know before diving into the deep end of the pool.

Here are some smart tips to get you started with rental properties:

Fix Your Financial Situation Don't do anything until you're sure that your credit and finances are in good shape. If your credit history is questionable, you're likely to have trouble acquiring financing. A high debt-toincome ratio is a red flag that will prompt most lenders to reject you right away. It would be best to take care of any outstanding debt before attempting to get financed for a house.

Educate Yourself Before purchasing any properties, take a few months to familiarize yourself with the real estate business and learn what will be expected of you as a landlord. There are lots of books you can read and clubs you can join where you can meet other investors that can answer just about any question you may have. Social media sites are great places to meet investors, mortgage brokers and property managers. For all you know, the investor whose brain you decide to pick might end up partnering with you on a profitable deal sometime in the future.

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Check Out Lots of Properties As tempting as it may be to buy the first property you see that you think you can afford, it might not be a good idea. As a new investor, it's going to take some time for you to learn how to spot a good deal and if you jump too soon, you may overlook something important and become discouraged when it doesn't go as planned. Visit properties in different neighbourhoods and ask to view units that are occupied (if it's okay with the tenants). You'll get a feel for what types of buyers you can expect to attract with each type of property in various neighbourhoods and hopefully you'll see what a well-managed rental looks like on the inside.

Prepare for Expenses Although it does happen, it's unlikely you're going to slide right into a property that doesn't need any repairs whatsoever. Even if nothing's "broken," it's advisable to do at least some minor work to the property for the purpose of improving its appearance and curb appeal (think paint and landscaping). Furthermore, you'll have to set some money aside for things like accounting, legal fees, garbage collection, pest control and vacancies. Remember that regardless of who your buyers are, they'll probably stay for a few years and leave. At that point, the mortgage, taxes and other expenses on the property will have to continue getting paid, no matter how long it takes you to find new buyers.

Hire a Property Manager Just because you're investing in rental properties doesn't mean you have to be the person answering the phone whenever something breaks in one of your units. Property managers make it their business to take care of these and other administrative tasks for you, so you can concentrate on other things, like looking for your next property. They can even find new buyers and screen them for you. Check out keyrenterchicagonorth.com for more information on property management services.

Think Realistically There's nothing wrong with being optimistic, but your expectations of this real estate investing endeavour should always be grounded in reality. You're not going to become a millionaire overnight and some of the deals you get involved with may seem rather modest until you develop the ability to spot better ones. If you quit your job expecting to make a fortune, you could find yourself heavily in debt and in worse shape than when you got started.

There's lots of money to be made in this business, but you'll have to look at lots of properties, learn various types of buying strategies and figure out cost-effective ways to handle propertyrelated expenses.

Above all, learn to enjoy this new venture you're undertaking. Get to know as many people in the business as you can and read every book on real estate or rental properties that you can get your hands on. The more you know about how things work and how to avoid the pitfalls, the sooner you'll start making the kind of money that allows you to quit your day job and pursue this full-time.

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Consult with your buyer or vendor to identify their own profile as a lessee or buyer when they were initially attracted to the property, find out: •

What attracted them to their property initially?

•

What needs did the property satisfy?

•

What didn’t it satisfy for them?

•

How have they altered the property to suit their needs?

•

Who do they identify the property to suit?

Together with the property requirements, consider other factors of the buyer’s or buyer’s profile as well, such as:

Tenant Profile: Their leasing intentions- reasons for leasing, perhaps this property is ideal due to its location to public transport or because it offers an opportunity to purchase.

Financial capacity- the property falls perfectly within an appropriate budget which allows lifestyle to be maintained.

Time Frames for future purchase- external economic influences may be a barrier preventing buying.

Buyer Profile: Their buying intentions- reasons for the purchase, perhaps this property is ideal for the investor due to its location to public transport or because it is new and offers ample opportunity for depreciation allowance each tax year Financial capacity- the property may be a luxurious harbour-side mansion with city views which may open up interest from overseas buyers or perhaps a property falls under $500000 and is brand new thus appealing to the first home buyers who can take advantage of the 2008-2009 government first home buyer grant of $24 000 for this property.

Time Frames for purchase- external economic influences may be fuelling or hindering buyers in a particular profile such as falls in interest rates creating a more affordable situation for buyers with mortgages.

A consideration of the impact of a combination of these factors on buyers or buyers is called “focus” marketing. We promote to the correct target market, the right product is presented to the segment of the market who will be interested in it.

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In this way the lessor or vendor gains an understanding of the target market for their property today and will be alert to your strategies in developing the marketing plan. They will be more likely to appreciate the importance of a quality, focused and effective marketing plan that often they will be paying for!

Once you have answered these questions you have to consider where to market the property to best attract the target market. How will you reach them? As many people are ‘area’ or ‘location’ buyers, a standard marketing program through local media may suffice, but due to technological impact, in most cases we need to attract the buyer from anywhere on the globe via the internet.

A marketing plan should be discussed and authorised at the point of obtaining the listing for the property. This is important because it is at this stage the lessor or vendor is advised by the agent as to the leasing or most appropriate method of sale; Private Treaty, Auction or Tender and it is also because most agencies obtain a contribution to the cost of marketing the property or have the client pay the total cost of marketing the property.

A marketing plan will require the agent to: 1. Outline marketing strategies It is essential to identify how you are going to penetrate and capture the market through a variety of advertising and promotional methods and their associated costs to the client.

2. Confirmation of client needs It is at this stage that you seek authorisation from your client concerning their preferred advertising campaign. All documentation needs to be completed to validate the client’s instructions. Agency Agreements are completed including the cost of marketing which the vendor will agree to by signing the agency agreement. If the marketing is extensive and high profile, the marketing program will outline the timeframe, methods of promotion and the cost of each activity as an “Attachment” to the agency agreement.

3. Advertising Copy Designing and developing the advertising copy and promotional material for the property.

This is completed once the property is ready to market i.e. when the agency agreement is signed by all parties and the contract for sale is available in the agency.

Writing advertising copy Promotion and advertising draw attention to the property, inviting prospective purchasers to make further enquiries.

A short advertisement may act as a ‘taster’ – giving enough information to stimulate interest but leaving things to discover when people go to see the property. For example, by not mentioning the number of bedrooms, the advertisement may draw enquiries from people Doc ID: CPPDSM4014A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 21 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\17. CPPDSM4014A\CPPDSM4014A - Workbook (L) eLearning.docx

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who may not have considered the property. The agent then has to opportunity to show than how it might meet their needs. Remember that ‘wants’ and ‘needs’, can be two different things.

A well-used formula for real estate advertising is to adopt the AIDA principle: Attract Arouse Create Call for

Attention Interest Desire Action

A catchy headline will attract attention. Features and benefits will arouse interest and create desire. An invitation to view the property is a call for action.

‘A picture is worth a thousand words.’ The more visual your advertisement, the greater likelihood of a response. Visual material may include photos, illustrations, plans, maps, etc.

The internet is a useful marketing tool if used properly. It enables you to use more detailed copy. However key word searches must be specific for ease of use. The internet also reduces the need for words and enlarges the scope of the target market through virtual tours.

However information must be updated regularly and always correct.

Publicity is free and reaches a wide audience. To generate this, an agent should maintain regular contact with property and real estate written and provide them with copy. The more you send, the greater the chance of getting published. Your client will love the exposure you initiated!

Marketing Activities It is your role to discuss with your client the best way to achieve maximum exposure and maximum price for their property. Marketing is expensive and you will need to be able to justify that cost. They will want to know what method works best and they will expect value for money.

You will need to confirm the type of campaign they prefer considering the following points: media-print and electronic such as TV, radio, newspaper advertising, internet budget – often up to1% of sale price or a set dollar package will be suggested as a cost of the marketing program method of leasing or sale- for example an auction will require a well-planned and more intensive program usually over a 4 week period marketing and promotional material (editorials, mail-out, brochures, flyers etc.) – the print that will be circulated to broaden exposure of the property When promoting your agency’s marketing services, you should have some visuals such as a kit showing the type of promotional campaigns that you offer and samples both print and electronic advertising. It should be current and relevant to the client’s property. For example, Doc ID: CPPDSM4014A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 22 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\17. CPPDSM4014A\CPPDSM4014A - Workbook (L) eLearning.docx

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a promotion for an industrial estate is not relevant to the residential property owner or a promotion of a water front mansion with jetty will differ to the 20 year old 2 bedroom unit.

Most agencies have a range of marketing programs with costing attached. These can be used to form the basis of the marketing plan for an individual client. The marketing plan will include specific advertising on specific dates in specific media such as local or daily newspapers and the websites used.

Table 1 - Marketing Options A table format such as the simple example below clearly outlines for the lessor or vendor the costs and regularity of advertising: Promotional activity Signboard Photography

Option 1 $ 270 pictorial

Option 2 $ 270 pictorial

Option 3 $100 basic

$ 400 professional

$ 400 professional

$ 50 agency

Copy write Brochures (200) Websites Regional paper Local Paper

$ 150 professional $ 280 $ 350 $ 4000 / 4 weeks $ 1400 /4 weeks

$ 50 agency $ 280 $ 350 $ 1000/ 1 week $ 700 / 2 weeks

$ 50 agency $ 280 $ 350 nil $ 350 /week

Total

$ 6850

$ 3050

$ 1180

A more detailed schedule will outline a week by week program of advertising and promotional activities conducted on behalf of the vendor.

In line with the agency policy, there may be a range of different programs aimed at three different budgets all of which should have easily interchangeable components or options to allow them to be adapted to specific clients and properties. There may be a basic, intermediate or gold class program such as in the 3 options in Table 1 on previous page or offered as a starting point for the vendor to adjust to suit their property.

It is important to mention at this point the importance of “demographic profiles� of our clients, both lessors and lessees and vendors and purchasers, depending on the client’s age they may have particular preference due to a familiarity with various media.

For example: Generation Y (born 1980-1994) will be tuned in to the internet where marketing will be interactive compared to the Baby Boomers (born 1945-1964) respond positively to pictorial advertising in local and regional papers.

Once the client selects the type of media according to their budget, you will then be able to draft a campaign that is suited to their property and their profile. The elderly gentleman moving into the retirement village may not appreciate the impact of the internet advertising due to his lack of internet use but it may be in his best interests to promote on your website Doc ID: CPPDSM4014A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 23 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\17. CPPDSM4014A\CPPDSM4014A - Workbook (L) eLearning.docx

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due to the buyer or buyer profiles you are aiming for. It is often at this stage you will be required to call on your negotiation skills to encourage your client to choose the ‘best’ option for them. A practical visual demonstration of your website advertising using your laptop would be a useful strategy for this client.

The primary concern relates to what is in the best interests of your client.

Promotion Advertising and promotion must be interlinked because together they form the basis of a marketing program.

In marketing a mix of product, price, promotion and place must be used to identify as follows: Product Price Promotion Place

what is being offered? what is the asking price? how will we communicate with the selected market? where will we be offering or selling it?

The first step is always identifying the target market.

Advertising involves using media to reach the target market.

Promotion is designed to build recognition, traffic or trade and position in people’s minds.

Advertising and promotion on their own will not “lease” or ‘sell’ the property. They will attract the enquiry but you, using your professional inspection and leasing or selling techniques; will be required to complete a successful transaction.

Methods of promoting properties Agents have many means of promoting properties for sale or rent. Advances in communication technology have allowed much wider coverage of the available marketplace.

Some of these means as follows: Newspapers Television and radio Signboards Newsletters Seminars Window display Personal network Brochures (letter box drops) Novelty advertising Contests/giveaways

Billboards Homes pictorials or magazines Open Houses Direct Mail Internet Buses, Taxi’s, Trains Sponsorships Publicity (editorials)

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There are subcategories such as pictorial signboards, e-marketing, virtual tours, SMS broadcast messaging, newspaper editorials and franchise magazines.

Sitting within the agency marketing plan, promoting the property also promotes the agency and this leads to wider recognition. The more our property flyers are circulated, the more signs in our marketplace, the more interactive our website, the more text promotions sent out, the wider the agency perception in the marketplace becomes.

Budget As our industry becomes more competitive your agency must focus on new and novel methods of promotion to achieve widespread exposure and to have that point of difference. To do this on a regular basis this is too expensive for a small business such as a real estate agency and must be supplemented by a lessor or vendor contribution to marketing.

Marketing contributions from the client are now part of common agency practice, but most clients need to be encouraged as to how marketing activities will get them the best possible outcome, money well spent.

Typically 0.5% to 1.0% of the expected price may be required to achieve the optimum result for the client who is selling a property. Whereas the high rental demand may substantially reduce this contribution if leasing.

Marketing should not be treated lightly. Without a plan and a set budget it is difficult, if not impossible, to do best by the client. Legislative requirements upon agents must be upheld such as the agent has a duty to disclose any rebates, discounts or commissions received in connection with services performed including the estimated amount they may receive. An example of this may be a regular full page by the agency in a paper that results in a discount to the agent below commercial prices, e.g. 10% this disclosure is required to be declared in the agency agreement under Section 57 of the Property Stock and Business Agents Act 2002. (See below) 57 Agency agreement must disclose rebates, discounts and commissions (1) A licensee is not entitled to any expenses from a person for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person in connection with a real estate transaction unless the agency agreement pursuant to which the licensee performs those services contains a statement: (a) Identifying the source of all rebates, discounts or commissions that the licensee will or may receive in respect of those expenses, and (b) Specifying the estimated amount of those rebates, discounts or commissions (to the extent that the amount can reasonably be estimated).

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commercial, business or industrial purposes, but not including land used or intended to be used solely or principally for agricultural or pastoral purposes.

Agreement Once you have developed the marketing plan for the lessor or vendor including the marketing activities and budget a final agreement by the lessor or seller is required and legally agreed to by both the lessor or seller and agent by entering into the agency agreement. This now provides the agent with formal instructions regarding the marketing; you are now under a contractual agreement to uphold the marketing plan together will all the other duties as outlined in the agreement.

As well as a copy of the agreement being served, the lessor or seller must be given copies of your plan (advertising and marketing schedule), In the situation where you have agreement for the lessor or seller to pay for the marketing program but the property leases or sells prior to the completion of the program such as within the first 2 weeks, the agent must refund any unspent marketing contribution to the seller, it is not for the agent to keep.

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DEVELOPING A MARKETING PLAN AGENCY MARKETING PLAN FOR SALE OF PROPERTY Sitting within the agency marketing plan, promoting the property also promotes the agency and this leads to wider recognition. The more our property flyers are circulated, the more signs in our marketplace, the more interactive our website, the more text promotions sent out, the wider the agency perception in the marketplace becomes.

As our industry becomes more competitive your agency must focus on new and novel methods of promotion to achieve widespread exposure and to have that point of difference. To do this on a regular basis this is too expensive for a small business such as a real estate agency and must be supplemented by a lessor or vendor contribution to marketing.

Marketing contributions from the client are now part of common agency practice, but most clients need to be encouraged as to how marketing activities will get them the best possible outcome, money well spent.

Typically 0.5% to 1.0% of the expected price may be required to achieve the optimum result for the client who is selling a property. Whereas the high rental demand may substantially reduce this contribution if leasing.

Marketing should not be treated lightly. Without a plan and a set budget it is difficult, if not impossible, to do best by the client. Legislative requirements upon agents must be upheld such as the agent has a duty to disclose any rebates, discounts or commissions received in connection with services performed including the estimated amount they may receive. An example of this may be a regular full page by the agency in a paper that results in a discount to the agent below commercial prices, e.g. 10% this disclosure is required to be declared in the agency agreement under Section 57 of the Property Stock and Business Agents Act 2002. (See below) WHY USE A MARKETING PLAN? We have all heard the saying “If you fail to plan, you plan to fail”, this is so much the case for the need to develop a marketing plan for the sale of the property. This plan once prepared, must be presented to the seller in line with agency practice.

Some of the proven steps that make up an efficient and successful marking plan include: Marketing Plan Objectives The objectives of the marketing plan are a collection of points discussed with the vendor relating to what, when, how the property is to be marketed. Some good questions to ask include: • When do you wish the marketing of the property to commence?

• When do you want the market sold by?

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• • • • • •

What price do you hope to achieve from the sale?

What inclusions are there when property is sold?

How long do you wish to wait for settlement?

Does the vendor prefer any particular methods for marketing the property?

E.g. internet, newspaper, radio, letterbox drop, database Anticipated budget for marketing e.g. Do you want to spend a lot or a little?

Preferred method of sale…auction or private treaty?

Once you have received answers to these questions, you should have a clear picture of what the objectives are for your marketing plan.

When you don’t ask questions you are shooting in the dark and guessing what the vendor would like without vendor consultation. This marketing plan should be a collaboration of what the vendor expects and what you can deliver.

MARKETING PLAN Target Market It is essential that we target to the right people in order to get a successful sale. As previously discussed, it is important to profile your target market. Your target market will be influenced by the location and the features and the benefits of the individual property.

It is wise to discuss these with the vendor and once again work in collaboration with them in order to select the most appropriate targets for your marketing.

Marketing Budget When forming your marketing plan it is important to discuss a marketing budge with the seller. Activities to be discussed include: • • • • • • • • • • • •

Local newspaper advertising General newspaper advertising Website advertising Database advertising Production of printed materials Letterbox drops Signage/signboards Radio/television advertising Agency window displays Social media In house advertising SMS advertising

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Marketing budgets conducted by best practice agents usually have a value of between 1% 1½ % of the property e.g house price $500,000 – marketing budget between $5,000 and $7,500 Marketing and Advertising Schedule Once you have discussed budget and marketing activities with the vendor best practice agents prepare a marketing schedule and present it to the vendor in writing for approval.

This schedule can only be completed once you have received authorisation of marketing expenditure and marketing preferences from the vendor.

Best practice agents use a property check list to complete a list of property features and benefits.

Floor Plan and Property Images To develop your marketing plan you will need to obtain a floor plan and property photos which can be used for all marketing purposes e.g. website, signboards, open for inspection etc.

Marketing Activities Marketing plan must have a variety of marketing activities to discuss and agree on with the vendor. Some of these activities would include: • • • • • • • • • •

Newspaper Television Radio Letterbox drop Website Brochures Signboards Flyers Open for Inspections Email database

Property Presentation Best property agents where possible always present the property in the best light. Some areas to focus on to improve the presentation of the property could include the usage of the following external providers: • Rental Furniture • Plant Hire • Interior Designer • Painter and Decorator Doc ID: CPPDSM4014A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 29 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\17. CPPDSM4014A\CPPDSM4014A - Workbook (L) eLearning.docx

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• • • •

Handy man Landscape gardener Window Cleaner Carpet steam cleaner

The employment of the above service providers will give you the best opportunity to get a maximum return on the sale of the property.

Comparative Market Analysis It is important in your marketing plan, to discuss with the vendor recent property sales in the area. The demand for the property will be influenced by: • • • • • •

Location Current interest rates Season Demographics Current Government situations Agreeing a price for sale/reserve for auction

Estimated Selling Price It is essential that you as the agent set accurate and verifiable figures for sale and auction of the property.

This price once agreed upon by the agent and vendor can either be disclosed or not disclosed. There are arguments for both. It is more common practice to set a price which is advertised by private treaty.

The main reason why sellers prefer to have a price is that the prospective buyer will have knowledge of the price range of the property.

The relevant law on the estimated selling price Under the Property, Stock and Business Agents Act 2002, agents must follow these requirements when setting or revising an estimated selling price: • The estimated selling price for a residential property means the price or price range specified in the agency agreement for the sale of the property as the agent’s estimate of the likely selling price of the property (section 72(1)).

• A real estate agent must not enter into an agency agreement with a person for the sale of residential property unless the agreement includes the estimated selling price (section 72A(1))*.

• The estimated selling price may be expressed as a price range but only if the highest price in the price range exceeds the lowest price by not more than 10% of the lowest price (section 72A(2)).

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• A real estate agent must not publish or cause to be published an advertisement in relation to the sale of residential property that includes the phrase ‘offers above’ or ‘offers over’(or similar symbols or words in any language) a specified selling price or price range (section 73(2))*.

• A real estate agent must ensure that the estimated selling price of a residential property is, and remains, a reasonable estimate of the likely selling price of the property (section 72A(3))*.

• A real estate agent must ensure that the estimated selling price is revised if it ceases to be a reasonable estimate of the likely selling price of a property by: o notifying the other party in the agency agreement, in writing, of the revised estimated selling price, and o amending the agency agreement (section 72A(4))*.

•

•

•

A real estate agent must, as soon as practicable after revising the estimated selling price, take all reasonable steps to amend or retract any advertisement published in relation to the property that includes an advertised selling price for the property that is less than the revised estimated selling price (section 73(3))*.

A real estate agent must, before or when specifying an estimated selling price or revising an estimated selling price, provide the seller or potential seller of the property with evidence of the reasonableness of the estimated selling price (section 72A(5))*.

The NSW Fair Trading Commissioner may by written notice to an agent require the agent to provide evidence of the reasonableness of any estimate of the selling price of residential property made by the agent in a statement: o verbally or in writing to a seller or potential seller of the property, or o in an advertisement in respect of the property that is published or caused to be published by the agent, or o verbally or in writing to a person as a potential buyer of the property (section 74(1)).

An agent who fails to comply with a notice under section 74(1) within the period for compliance specified in the notice is guilty of an offence (section 74(2))*. * A maximum penalty of 200 penalty units (currently $22,000) applies for breaching this law.

The Act requires real estate agents to include an ‘estimated selling price’ in agency agreements. The estimated selling price is the agent’s reasonable estimate of the likely selling price for the property. This is expressed either as a single price or a price range, but only if the highest price in the price range exceeds the lowest price by not more than 10%

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For example, expressing a price range of ‘$800,000 to $880,000’ is allowed. However, ‘$800,000 to $900,000’ is not allowed as the higher figure of $900,000 exceeds the lower figure of $800,000 by more than 10%. If an agent publishes or states the selling price as a price range, then it is an underquoting offence if the published or stated price is lower than the lowest price in the agent’s estimated price range.

The Act also now bans the use of phrases, terms or symbols like ‘offers above’, ‘offers over’ or ‘+’ with a price or price range. For example it is not allowed to advertise a property as being ‘$800,000 plus’ or, ‘offers over $800,000’ or, ‘$800,000 +’. However, using phrases or terms like ‘price guide’, ‘guide’, ‘auction guide’, ‘bidding guide’, ‘estimate’ or ‘price estimate’ are allowed if the published or stated price figure or price range complies with the Act’s other requirements.

Sometimes an agency agreement will relate to the sale of either multi-lot subdivisions or a new development where there are multiple properties available of varying size and price within the development. In such cases, the agent may include an attached schedule of the lots with their individual prices, or the properties available with their features (primarily bedroom numbers) and a price for each. Any prices included in the schedule cannot be less than the estimated selling price for each unit/lot.

What is a reasonable estimate?

A reasonable estimate will ultimately depend on the particular circumstances of each property.

The estimated selling price that an agent determines should be made following a careful consideration of factors that will affect the selling price.

Agents should exercise professional skill, care and diligence in determining the estimated selling price as NSW Fair Trading can require an agent to provide evidence that supports their estimated selling price.

How might an agent make a reasonable estimate?

When determining a reasonable estimate of the selling price of a property, an agent should take into account: • the specific factors that will influence the expected sale price • any sales of comparable properties • feedback from potential purchasers • any current or relevant valuations provided in respect of the property • the characteristics and features of the property, such as its size and location, including the existence of any ‘material facts’ • methods used to market the property.

• This list is provided as general guidance only and is not exhaustive.

Agents should consider all relevant information before putting the estimated selling price in the agency agreement.

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Evidence for determining an estimated selling price Agents must provide the seller with the evidence of how they reached an estimated selling price for the residential property.

Agents should record relevant information that would allow them to show how they determined a particular selling price estimate to be a reasonable estimate.

Agents should keep file notes and all information relied upon to determine a property’s estimated selling price. For example, agents should keep file notes on: • Comparable sales This may include how such sales compare, any variations between the properties and how that may affect the estimate, and any changes in the market since the comparable properties were sold.

• Market conditions This may include interest rates, the general state of the economy and the general state of the real estate market in the area where the property is located.

• The property’s features This may include how close it is to services, the property’s general condition and location, its views, size and features of the land and any other feature likely to inform the estimated price.

Other relevant information This may include any restrictions on the land, rezoning or other uses for the land, length of settlement and any other factors which may affect the estimated price.

This list is provided as general guidance only and is not exhaustive. For example, notes should be made and kept on file of further discussions with the seller, if there is a relevant change in local market factors, or if the response to the marketing campaign suggests a need to revise the estimated selling price from the one originally set out in the agency agreement.

File notes on how an agent determined a reasonable estimated selling price may also be used if the NSW Fair Trading Commissioner writes to an agent requiring them to substantiate any statements they make about an estimated selling price of a residential property.

Revising the estimated selling price While a property is being marketed, changes in the residential property market or feedback from potential buyers may indicate that the advertised selling price is no longer a reasonable estimate of the likely selling price. In such circumstances, real estate agents must revise the estimated selling price.

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An agent does not need the seller’s permission before revising the estimated selling price to ensure it remains a reasonable estimate.

It would not be realistic to expect agents to revise the estimated selling price every day.

However, given changing market conditions, offers made and other relevant factors, real estate agencies should review selling prices weekly and consider if the estimates remain reasonable.

If the estimated selling price is revised, then the agent must: • • •

notify the seller in writing about the new single price or price range that is the revised estimated selling price provide the seller with evidence of how they estimated the revised price amend the agency

Once the estimated selling price is revised an agent must take all reasonable steps, as soon as is practical, to change or withdraw any advertisement displaying a selling price that is less than the revised estimated selling price.

In the case of hard copy advertising material, such as newspapers or posted flyers that are in public circulation, or information emailed to potential buyers before the estimated selling price was revised, it would not be reasonable to expect agents to try to recover all of that material.

However, agents should ensure that any new advertisements contain a selling price or price range that complies with the Act. Unlike traditional hardcopy advertisements, online advertisements are published on an ongoing basis. Agents should therefore ensure any online price statement remains consistent with their reasonable estimate of the selling price throughout the period it is available to the public.

What if the seller wants a price different to the agent’s estimated selling price?

The estimated selling price does not need to reflect the seller’s expectations on price.

What the law requires is an agent to determine an estimated selling price using their professional skills and market knowledge.

Agents should make the seller aware that they cannot quote a price that is less than the estimated selling price when marketing the property in advertisements or through representations.

Does an agent have to disclose any selling price to a potential buyer?

If a seller instructs an agent not to reveal any price, then an agent is not required to disclose the estimated selling price or any price to potential buyers, be it in advertising, in writing or verbally.

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However, if a statement about the selling price is made or published, it must not be less than the estimated selling price in the agency agreement.

What if the eventual sale price is higher than the estimated selling price?

Agents are expected to provide a reasonable estimate of the likely selling price and in many property sales this estimate will be close to the final sale price. However, variations can occur due to factors which may be unknown to the agent; for example interest rate movements, unusually high levels of buyer interest, or factors outside of their control (such as for unique properties which can be difficult to value).

Regardless of the type of property, or what occurs during the marketing period, agents and their employees must act fairly and responsibly in their dealings with buyers and sellers.

This means that, if requested, agents should be able to provide evidence to NSW Fair Trading which demonstrates that the difference between the estimated selling price and the eventual sale price was reasonable in the circumstances. Also, agents must be able to demonstrate that any changes to the estimated sale price were communicated to all parties (seller and potential buyers) as they occurred.

Checklist to Avoid Underquoting This checklist is provided as general guidance to assist real estate agents in avoiding underquoting when marketing a residential property:

The estimated selling price is a reasonable estimate of the likely selling price for the property, with the agent having considered comparable sales, market conditions, the property’s features, and other relevant information.

The estimated selling price is either a single price (such as $800,000) or in a price range where the highest number does not exceed the lowest number by more than 10% (such as $800,000 to $880,000).

The real estate agency has provided evidence to the potential seller of how the selling price was estimated.

Marketing material shows the selling price as a single price or a price range that is not lower than the estimated selling price.

Any statement on the likely selling price quotes a price that is not less than the estimated selling price.

The real estate agency has written records of any statements made to potential buyers about the likely selling price of the property.

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The estimated selling price has been revised if it no longer reflects a reasonable estimate of the likely selling price.

The seller has been notified about the revised price in writing and the agency agreement has been amended with the revised estimated selling price.

Advertisements have been withdrawn or changed (where possible) if the estimated selling price has been revised.

Marketing Plan Evaluation and Reporting Procedures It is essential that we collate a report of marketing activities weekly and circulate that to key parties and the vendor. This written feedback report will include: • Telephone activity • Open House Activity • Number of offers • Comments passed 57 Agency agreement must disclose rebates, discounts and commissions (1) A licensee is not entitled to any expenses from a person for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person in connection with a real estate transaction unless the agency agreement pursuant to which the licensee performs those services contains a statement: (a) Identifying the source of all rebates, discounts or commissions that the licensee will or may receive in respect of those expenses, and (b) Specifying the estimated amount of those rebates, discounts or commissions (to the extent that the amount can reasonably be estimated).

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

Once you have developed the marketing plan for the lessor or vendor including the marketing activities and budget a final agreement by the lessor or seller is required and legally agreed to by both the lessor or seller and agent by entering into the agency agreement. This now provides the agent with formal instructions regarding the marketing; you are now under a contractual agreement to uphold the marketing plan together will all the other duties as outlined in the agreement.

As well as a copy of the agreement being served, the lessor or seller must be given copies of your plan (advertising and marketing schedule), In the situation where you have agreement for the lessor or seller to pay for the marketing program but the property leases or sells prior to the completion of the program such as within the first 2 weeks, the agent must refund any unspent marketing contribution to the seller, it is not for the agent to keep.

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ELEMENT 2 – CHECK MARKETING MATERIALS Element of Competency Element

Performance criteria

2. Check marketing materials.

2.1 Marketing materials that reflect agreed property and agency marketing plan are developed within agreed budget and timeframes.

2.2 Marketing materials are checked for accuracy and compliance with agency and legislative requirements.

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ELEMENT 2 – CHECK MARKETING MATERIALS Check Marketing Materials We have discussed the importance of identifying the correct target market and tailoring the marketing plan to attract this market. Now we focus on ensuring that the marketing materials reflect the property characteristics correctly so there is no misrepresentation and that the marketing is effective; it is doing its job well!

The Australian Competition and Consumer Commission (ACCC) has handled complaints from the community about misrepresentation of the property characteristics. When describing a property your advertising must be checked to ensure that any statement about the features, fixtures or characteristics of the property are true, not misleading and without embellishment.

For example: distance to services or amenities should be stated where possible so that a “short walk to be the beach” becomes “ approximately 400m level walk to the beach”.

A “new kitchen “becomes “renovated new kitchen 14 months ago”. “Ideal townhouse site” becomes “development potential subject to council approval”.

Refer to the legal requirements of the Property Stock and Business Agents Act 2002Section 51 and 52 in Act, Legislations and forms on page 66 Just as important as what is said about property is what is NOT said. Silence can constitute misleading and deceptive behaviour where the agent has a duty to disclose relevant facts.

The much publicized Gonzales murder case in 2001 highlights the importance of agent disclosure of “material facts”. In this case the material fact was the murders themselves, “material” meaning that it is of such significance that it is likely to influence the determination of the cause. The Administrative Decisions Tribunal determined that there is no obligation upon the purchasers to raise questions with the agent and that the agent must not remain silent if they are aware of an issue relevant to the property that may affect a purchasers decision.

The agent is also bound under the provisions of the Trade Practices Act 1974- refer to Section 52 Misleading and deceptive Conduct and Section 53 False Representation in Acts, Legislations and Forms on page 66 Refer to Part 5 at the end of this unit for details of this legislation.

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PHOTOS The ever increasing reliance on electronic media by tenants or purchasers seeking information about properties to buy requires a greater reliance on photographic representation in your marketing. Now a property may be marketed with a showcase of 20 photos and these photos must not mislead or deceive. For example, a photo of a beach in the ads, if this view is not seen from the property it should declare it purely as a “location shot”, power lines across a property should not be “touched out” of the shot.

It is important to note that many agencies employ the services of an external professional contractor but in this case the agent may still be liable for misrepresentation and should check their contract with the photographer.

Remember, what you print, what you say, what you don’t say and the photos you publish can become a legal mine field. Your agency should have a system in place such as a checklist to ensure the marketing materials are compliant with legislation, your agency policy and the clients marketing plan.

PHOTOGRAPHIC REPRESENTATIONS / ADVERTISING GUIDELINES These Guidelines have been issued by the Director General and apply to all agents licensed under the Property, Stock and Business Agents Act 2002. They are intended to assist agents when publishing photographic advertisements.

THE LAW False, misleading or deceptive statements The use of labelling to clarify meaning Photographs are an influential selling tool in the home property market whether in print or on the internet. Photographs are used by agents in property advertisements, in addition to descriptive words and phrases, to help create a picture in the mind of the prospective buyer. A beautiful photograph of a house, its unique features, its views, and its surrounding local area can immediately draw in many potential buyers.

It is often said that 'a picture is worth a thousand words'. Real estate agents should be mindful when using photographs in a real estate advertising campaign as visual communication must ensure the message is not misleading.

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Consequently, these guidelines have been developed by NSW Fair Trading to assist agents in publishing acceptable photographic advertisements which convey accurate information for the property buyer and leave the buyer with the 'right impression'.

As the real estate industry becomes more competitive more photographs are used to advertise the sale of a house. Often several photographs of indoor and outdoor settings are used in the one advertisement which may leave some consumers uncertain or unclear about the pictures they see in the photographs. For example, where a single photograph in the property section of a local newspaper featuring a magnificent beach view is used, it may be unclear to consumers whether this view can be seen from the property being offered for sale or whether the beach is nearby. Without any labelling on the photographs themselves consumers will be left with uncertainty about the image they see.

THE LAW Section 51 of the Property, Stock and Business Agents Act 2002 forbids a licensee in the course of carrying on their business from publishing or causing others to publish any statement that: •is intended or apparently intended by the licensee to promote the sale or lease of any property, and •is materially false, misleading or deceptive (whether to the licensee’s knowledge or not).

A statement is published if it is: •in any newspaper, periodical publication or other publication, or •publicly displayed in, on, over or under any building, vehicle or place (land or water), or in the air in view of persons on any street or public place, or •in any document sent or delivered to any person or thrown or left at premises occupied by a person, or •broadcast by radio or television, or •circulated on an internet website or by electronic mail.

Penalties apply for breaches of the provision of section 51 of the Property, Stock and Business Agents Act 2002. The maximum penalty is 200 penalty units – presently $22,000.

Section 51 of the Property, Stock and Business Agents Act 2002 applies in addition to other legislation that relates to misleading or deceptive conduct and false representations, including the Australian Consumer Law. Section 18 of the Australian Consumer Law prohibits a person, in trade or commerce, from engaging in misleading or deceptive conduct.

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In addition, section 30 of the Australian Consumer Law applies the general rules about misleading conduct to the specific conditions concerning interests in land, including the sale or grant, or the possible grant of an interest in land, the promotion by any means of the sale or grant of an interest in land.

Section 30 provides that a person, in trade or commerce, must not make a false or misleading representation about •the nature of the interest in the land •the price payable for the land •the location of the land •the characteristics of the land •the use to which the land is capable of being put or may lawfully be put, or •the existence or availability of facilities associated with the land.

Penalties apply for breaches of section 30 of the Australian Consumer Law. The maximum penalty in the case of a person is $220,000 and for a company is $1.1 million.

FALSE, MISLEADING OR DECEPTIVE STATEMENTS A statement is taken to be false or misleading if it has a reasonable tendency to lead to a belief in the existence of a state of affairs that does not in fact exist, whether or not the statement indicates that the state of affairs does exist.

Misleading or deceptive conduct is a concept that has been broadly interpreted judicially.

Conduct is misleading or deceptive if it is likely to lead a reasonable or ordinary member of the class of persons to whom it is directed into error. Misleading conduct can include acts of silence or omission. Conduct can be misleading even if the agent does not actually make any representations. It is not relevant whether the agent actually intended to mislead anyone to establish liability. What is relevant is the overall impression created by the conduct and its actual or likely effect on reasonable or ordinary members of the target audience (prospective buyers). Any type of conduct related to the photographic advertising of real estate that could give a consumer the wrong impression may potentially breach the Property, Stock and Business Agents Act 2002 and the Fair Trading Act 1987.

Agents must ensure that any claims made about any property or land characteristics in any photographic representations and advertising are accurate and could not give prospective buyers the wrong impression. Statements made in conjunction with photographs of the views and facilities available in a local area must not be false or misleading.

Examples of undesirable photographic property advertisements in newspapers, real estate publications and on the internet can include:

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•a photograph of a water view or scenery, placed next to a photograph of a house, makes it difficult to ascertain whether the water view or scenery can be seen from the house or whether the photograph is a 'location shot' •a photograph of a beach scene with the wording 'minutes to this!' typed above the photograph does not give a clear indication of the distance from the property to the beach shown in the photograph •a photograph of a park and beach with the wording 'opposite home' where, in fact, this view cannot be seen from the property •a photograph of a house placed next to a photograph of a beach with the wording 'stroll to beach' printed underneath the photograph does not give a clear indication of the distance from the property to the beach •a photograph of a beach with the wording '90 seconds walk to water’s edge, not actual view' printed at the bottom of the photograph needs more clarification •a photograph on the internet of a beach with the wording '100 metres from beach' printed at the bottom of the photograph needs more clarification.

The photographs and wordings in the above examples are likely to mislead, give the wrong representation or be unclear to any person relying on the photographs to give them an image of the property being offered for sale.

The 'touching up' of photographs that appear on internet websites which promote the sale of real estate is also of concern. Photographs of properties which have been touched up to hide undesirable characteristics or enhance other features could mislead consumers.

Accordingly, agents must ensure that photographs are not used in a manner that may lead to implied representations that are false or involve misleading or deceptive conduct. Real estate agents must not: •modify or allow to be modified photographs of properties so that the images no longer truthfully and fairly represent that property •change the appearance of a property by digitally removing or adding features, but adjusting the lighting slightly to compensate for poor lighting on an overcast day may be acceptable or •zoom in on a photograph of a view which can be seen from the property to make that view appear closer.

The modifications to photographs described in the above examples are likely to be misleading or deceptive.

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THE USE OF LABELLING TO CLARIFY MEANING Accurate labelling of photographs used in property advertisements could eliminate any doubt in a consumer’s mind about what they actually see in a photograph.

Some examples of acceptable practices in photographic advertisements which Fair Trading suggests agents use are: •a photograph of a water view which has been taken on the property being offered for sale does not require any labelling •a photograph of a water view which has not been taken on the property being offered for sale, but is within the immediate area, should have printed on the photograph 'location shot' •a photograph of a parkland or bushland which has been taken on the property being offered for sale does not require any labelling •a photograph of a parkland or bushland view which has not been taken on the property being offered for sale, but is within the immediate area, should have printed on the photograph 'location shot'.

Note: The term 'location shot' should only refer to photographs of facilities and services within the immediate surrounding area of the property being offered for sale, such as, a park, playground, beach, shopping village, café scene or other facility. Generally, the scene in the photograph labelled as a 'location shot' cannot be seen from the property being offered for sale, and was not taken on the property itself. Therefore, the most accurate description to print on the photograph would be 'location shot'.

It is suggested that any photographs taken on the property itself to be used in real estate advertising do not require labelling. Accordingly, only photographs not taken on the property itself, but within the immediate surrounding area, will require the labelling 'location shot'.

Photographs of the property (outside and inside photographs) that is being offered for sale which are for illustration purposes must not be misleading. The touching up of photographs would be considered misleading.

Further, the Australian Competition and Consumer Commission’s guideline 'Fair and square - A guide to the Trade Practices Act for the real estate industry' advises that vague statements about the location of land are likely to be misleading under the Trade Practices Act 1974. Only factual information about the location of land or property should be used.

The following examples show what wording would also be acceptable to use in the description of a property to supplement the photograph/s:

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•'2 km to beach' is preferable to 'close to beach', and •'village shops 3 km' is preferable to 'within walking distance of shops'.

All efforts should be made by agents and their employees to provide an accurate picture or impression in the consumer’s mind of the features of the property being offered for sale.

Agents cannot avoid liability simply by claiming that the buyer or consumer should have made reasonable enquiries and checked the information provided. Agents are responsible for their words and actions in their dealings with their clients.

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Do You Use a Pre-listing Kit? One way to drive the efficiency and efficacy of your listing meetings is to be sure to send a prelisting kit ahead of your scheduled meeting. Not only will this allow clients to digest a lot of information at a comfortable pace (on their own time), but it also frees up considerable time during the meeting for true discussion which can build rapport with your clients.

Here’s a representative example of what you might include in a pre-listing kit: 1. A personalized cover letter 2. A “communication one-sheet” detailing all of the ways (and the best ways!) for getting in touch with you 3. A bit about your experience in real estate (remember to keep this relatively free of jargon… clients may not know what your various designations mean!)

4. A short marketing piece with a focus on your blog or Facebook Fan/Business page as well as any “case studies” you have from previous sales 5. Short bios of any team members who support you (also a good time to highlight any companies you partner with who will help market the home– from SEO companies, video professionals, or other marketing experts) 6. Testimonials from past clients (including links to videos on your website if you have them!)

7. Any relevant press concerning your experience, community involvement, or charitable causes 8. A property disclosure form which covers the condition of the home, property taxes, and any unique features the home possesses 9. An open form for your prospects to write down questions they have about you, your service, or the home selling process You can choose to provide the pre-listing kit as an actual, physical kit, but in many cases a digital one would do just fine. The pre-listing kit shows you are organized and that your prospects can expect to be in the hands of a true professional who has a trusted process for selling their home.

Pre-listing kit: Documentation that should be included in the listing kit may include: Agency profile.

Other properties listed.

Client testimonials.

Range and success rates of marketing strategies.

Local information and past history for leased properties in the area.

Agency services for leased properties such as repairs and maintenance, ledgers and reports, interior and exterior design and presentation assistance.

Other agency documents – e.g. customer fact sheet, renting guide.

Regulatory publications and handbooks.

Most ‘out of sight, out of mind’ is best. If something is visibly wrong it should be fixed. Major problems can be more complicated but are still better fixed before the property is offered for sale unless it is a ‘knock-down’ proposition. For example, it may be necessary to have a structural report from an engineer if structural cracking appears major but the client cannot afford to repair the problem before sale.

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ELEMENT 3– IMPLEMENT MARKETING ACTIVITIES Element of Competency Element 3

Implement marketing activities.

Performance criteria 3.1 Persons involved in marketing property for sale are briefed on their roles and responsibilities to ensure success of marketing activities.

3.2 Marketing activities are implemented in line with agreed marketing plan and budget.

3.3 Responsibility is assigned for ongoing monitoring of marketing activities.

3.4 Marketing activities are implemented that comply with agency practice, ethical standards and legislative requirements.

3.5 Seller is kept informed of progress of marketing activities according to agency practice and legislative requirements.

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ELEMENT 3– IMPLEMENT MARKETING ACTIVITIES The marketing plan you choose to promote and advertise the property will depend on what is in the best interests of the client and the type of property. Marketing activities will vary for businesses, commercial properties, industrial properties, residential and retail properties.

The following also apply: • The target market • Demand for the type of property • The client’s urgency • The client’s requirements • The advertising budget • Type and features of the property • What is available to you and your agency • Competition All these factors will need to be taken into account in recommending the best mix for the client. For example an industrial property may require a longer period of extensive marketing through billboard advertising, television, radio and major metropolitan newspapers and promotion to companies outside of Australia. A retail property may be promoted through centre management systems of their own group e.g. Westfield.

The marketing activities may involve a cross-section of staff in the agency together with external clients such as the photographers, editors, publishing companies etc.

Due to the mix of responsibilities it is important that all parties involved are clear on their roles and responsibilities to facilitate a co-ordinated marketing process. In the larger agency it may be an administrative role for specialist staff to implement the marketing activities or it may be the listing agents’ role to delegate the various marketing duties across the staff. Perhaps you are in the smaller agency where the listing agent takes ownership of co-coordinating the marketing procedures throughout the entire program.

Importantly, no matter which system your agency follows, it should uphold the following strategies which will minimize risk to all parties: PERSONS INVOLVED IN MARKETING PROPERTY FOR SALE ARE BRIEFED ON THEIR ROLES AND RESPONSIBILITIES TO ENSURE SUCCESS OF MARKETING ACTIVITIES. Persons involved in the marketing activities are competent and hold appropriate qualifications such as a Certificate of Registration or License. Delegation of duties is therefore feasible across the staff and external provides e.g.: printers and photographs.

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Market activities are monitored. Monitoring marketing response is a critical aspect of the business plan as well as important to the lessor or seller whose money is invested in various marketing activities. Their agent is keen to achieve and maintain tenant or buyer interest throughout the marketing campaign hence the monitoring of the following activities:

Expenditure – a programmed budget to spread across the anticipated marketing period and to control costs. One of the reasons for having a marketing plan is the necessity to budget and control the costs involved.

If your client agrees to contribute $5,000 and is stated in the agency agreement then that is your budget. If you spend $10,000 and later invoice your client for the balance of $5,000 they are under no obligation to reimburse you. Therefore, nothing should be charged out without the written authority of the client. It needs to be included in the leasing or sales file if you need to make provisions for additional advertising and promotional expenses, for example, to continue to market the property after it fails to lease or sell on auction day.

All costs must be justified; copies of all advertising and promotional material should be supplied to the client. Your office systems must be able to track individual plans and costs for each property to avoid exceeding budget.

An effective monitoring system requires you to: • • • • • • •

Budget carefully Keep accurate records of vendor contributions and what they are for Have a scrapbook of all advertisements placed Cost all advertisements placed in scrapbook and keep proper and accurate records Send clients copies of all marketing material for their property Match your accounts received with your own costing for accuracy Keep running totals of costs for each individual client and/or property

Enquiry records – tracking the source of enquiry and enquiry rates, what marketing is working, what is not?

Apart from justifying the cost and staying within the allocated budget, the main questions that need to be answered are whether or not you are hitting your target market and what response is being obtained.

The target market may need adjusting or location of advertising may need to be changed. The only way to evaluate it is to confirm and log the source of all responses received. For example an enquiry via telephone would need to be asked exactly where they saw the property advertised and the response logged against the appropriate method i.e. signboard, local paper, local paper, etc.

By keeping track of responses you not only establish the effectiveness of your marketing plan for that property but also gain knowledge in promoting your company services and for future promotion and advertising of properties.

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FEEDBACK/ MONITORING OF MARKETING ACTIVITIES From tenants or buyers- are they the match of target market?

From other agents- is there a consistency in response from all agents involved in the marketing activities?

From the lessor or seller- are we meeting and exceeding their expectations? Are changes required?

Some important areas to keep track of and report on to the seller include: •

Phone traffic

•

Open for inspections numbers of visitors

•

Number of open for inspection conducted

•

A website traffic – number of visits to your site

•

Number of hits on social media

•

Visitor comments

•

Number of realistic offer made on the property

SELLER IS KEPT INFORMED OF PROGESS OF MARKETING ACTIVITIES ACCORDING TO AGENCY PRACTICE AND LEGISLATIVE REQUIREMENTS. In regular occurrence we should be providing not only updates on tenant or buyer interest but also response from the marketing activities. If changes are required it is more professional to involve the lessor or seller by consulting with them, seek feedback and instruction from them whilst guiding them with your expertise. By regularly sending copies of promotional material to your clients you are maintaining communication and showing them that you are providing the promised service as well as confirmation of what they have paid for.

Various marketing activities Database marketingUsing both company and personal contacts and referral marketing through allied professional or the agency’s own client management system. Many agencies maintain their own client management/contact system where this form of marketing is very appropriate Brochures and flyersCan be letterbox dropped, e-mailed or distributed as inserts in newspapers. Of course, all this depends on the property and the target market.

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Property inspections Unless you have physically inspected the property you will not be in a position to adequately describe it. You cannot list residential property for lease or sale without conducting a physical inspection and completing a Property Inspection or Sales Inspection Report to the owner. Completing a listing sheet will accurately pinpoint features and facilities that can be used to promote the property.

The practice of allowing staff to write advertising copy from listing or information sheets without the benefit of actually seeing the property is a recipe for disaster. Any person in the agency who is involved in the promotion and advertising of property must be given the chance to view it.

The best time to formulate copy for marketing and promotional material is when you are at the property and it is fresh in your mind. Some agents do this whilst they are obtaining the listing.

Physical presentation of property for sale Your role as agent is to provide advice as to how the property would be best presented.

The job of preparing the property rests with the client; it can sometimes take tact to advise your client to present a ‘messy’ property in a better condition. Your communication skills will be tested—how do you get the client to paint over the children’s artwork on the bedroom wall or weed the gardens?

It is imperative that the client is aware of the benefits of presentation. You should always offer and discuss a list of ‘tips’ to help to present the property at its best. For example: Lawns mowed Pets tied up and outside Curtains open to allow light in Remove items to reduce clutter and create space Fix leaky taps, loose door handles or door knobs The presentation can have a major effect on marketing in most cases. Television lifestyle programs such as Hot Property and Better Homes and Gardens can help reinforce your message to the client. Most agents supply the client with a list of presentation tips during their listing presentation or in their listing kit.

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ELEMENT 4 – REVIEW AND REPORT ON MARKETING ACTIVITIES AND PLAN Element of Competency Element 4

Review and report on marketing activities and plan.

Performance criteria 4.1

Marketing activities and plan are reviewed against aims and objectives of marketing plan.

4.2

Feedback on outcomes of marketing activities is sought using reliable methods and verifiable data according to agency practice.

4.3

Need for alternative marketing activities and adjustments to marketing plan are assessed in consultation with relevant people if property proves difficult to sell.

4.4

Effectiveness of planning and marketing processes is assessed to identify possible improvements in future activities.

4.5

Costs and time lines are analysed to evaluate and improve future marketing initiatives.

4.6

Conclusions are prepared from verifiable evidence and advice is provided on future marketing initiatives.

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ELEMENT 4 – REVIEW AND REPORT ON MARKETING ACTIVITIES AND PLAN As part of our agency practice and in conjunction with our quality improvement systems the agency will review the marketing activities. The process of review involves comparing the actual activities undertaken and the marketing plan that has been implemented against the original aims and objectives agreed upon by the seller.

The purpose of the review is to establish the effectiveness of the marketing plan and identify activities that require adjustment.

Review infers “after” the campaign but remember the marketing should be “monitored” during the process of the plan whilst promoting the sellers property. It is unprofessional to react after the damage has been done instead of being proactive in our monitoring, making necessary changes along the way to achieve success.

Relevant data and feedback on the outcomes is sought using reliable methods and verifiable data. Input from all persons involved in the marketing will provide subjective feedback (personal opinion) about the marketing. This may involve the receptionist who received direct enquiry from over the counter and phone enquiries, the sales staff who responded to email enquiry will have useful feedback as well. The agency principal has access to all reports and may be reviewing budgets against sources and rates of enquiry; this method is more objective when we interpret reliable quantifiable data. Ratios of enquiries to cost for each marketing method used provides relevant feedback on the usefulness of money spent.

By keeping a record of the effectiveness of each advertising method we can identify which ones are working and which should be reviewed. This can be done by monitoring the source of the inquiry which allows for suitable adjustment to the marketing campaign and advertising budget. It also provides a permanent record of enquiry and serves as a basis of feedback to your client. It is a vital part of the process in marketing the property successfully.

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Need for alternative marketing activities and adjustments to the marketing plan are assessed in consultation with relevant people if property proves difficult to sell.

If a property proves difficult to sell the agent needs to analyse the impacting factors and implement strategies to address the problems faced. Obviously the economic factors of supply and demand will have a great impact on the price the property will achieve however we do have the opportunity of adjusting the marketing activities if our current activities are letting us down. In consultation with the owner we may need to revise the budget, perhaps enquiry rates have been low across the region and the length of time to market the property has extended beyond initial estimations.

It may be that the advertising copy needs modifying. Perhaps we are not attracting our target market appropriately, response from the current photos may be disappointing, another angle is required or more internal shots should be featured.

Numbers in attendance at open for inspections may be low, a virtual tour may be required or we may try an editorial in the local paper or erect bunting around our signage for greater impact.

If our agency belongs to a franchise or multi-list group, it may be prudent to involve these member agencies to broaden our network. No matter how we intend on modifying our marketing, it should involve consultation with your landlord or seller to ensure we have their understanding and agreement on any changes; it will be obvious to them that your agency practice is thorough and professional.

Some properties just don’t sell as quickly as we would like. Key areas to focus on are as follows: • Adjust the price • Property presentation – how well does the property present? What could you improve on economically?

• Advertising budget – can you spend more?

• Target market – review who and where you should be focusing your advertising dollars on

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CONCLUSIONS ARE PREPARED FROM VERIFIABLE EVIDENCE AND ADVICE IS PROVIDED ON FUTURE MARKETING INITIATIVES. It is important that we give regular reports to the vendor regarding marketing activities.

Verifiable evidence collated by the agent and reported to the vendor can include: • • • • •

Phone call activity regarding the property Website activity regarding the property Marketing expenditure with invoices regarding newspaper print and other marketing materials Number of visitors to open house inspections Number of offers made Expenditure to external providers/suppliers regarding property presentation e.g. landscapers, painters/decorators etc.

Best practice agents keep meticulous records relating to all marketing expenditure. A major area of dispute comes from non-disclosure of financial records kept by the agent regarding marketing activities.

Once these reports have been reviewed by the agent and the vendor you are now able in collaboration to readjust and discuss future marketing activities.

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Conclusion Congratulations! You have now completed the content and assessments for this unit CPPDSM4014A – Market property of sale.

This has provided you with the skills and knowledge to market property for sale.

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ACTS LEGISLATIONS AND FORMS Including: •

Property Advertisements

•

PSBA Section 51 – Publishing false and misleading statement

•

PSBA Section 52 – Misrepresentation by licensee or registered person

•

Trade Practices Sect 53 – False Representations Sect43 – Unconscionable conduct

•

Anti Discrimination laws

Legislation Throughout the units of competency in this course the recurring theme is the legislation that governs the industry and regulates industry practice.

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The copy that you write to draw enquiry to the property is subject to this legislation.

The property must be promoted on its merits and everything you say or write is subject to scrutiny.

The Property Stock and Business Agents Act 2002 and Regulation 2003 set out general rules of conduct applying to all licensed agents and registered persons.

Rule 15 covers soliciting through false or misleading advertisements or communications and states: ‘An agent must not solicit clients or customers through advertisements or other communications that the agent knows or should know are false and misleading.’ PSBA 2002 Section 51 Publishing false or misleading advertisements (1)

A licensee must not publish or cause to be published in the course of carrying on business as a licensee any statement that: (a) is intended or apparently intended by the licensee to promote the sale or lease of any property, and (b) is materially false, misleading or deceptive (whether to the licensee’s knowledge or not).

Maximum penalty: 200 penalty units.

(2) Without limiting the generality of subsection (1), a statement is taken to be false or misleading for the purposes of this section if it is of such a nature that it would reasonably tend to lead to a belief in the existence of a state of affairs that does not in fact exist, whether or not the statement indicates that the state of affairs does exist.

(3) A statement is published if it is: (a) inserted in any newspaper, periodical publication or other publication, or (b) publicly exhibited in, on, over or under any building, vehicle or place (whether or not a public place and whether on land or water), or in the air in view of persons being or passing in or on any street or public place, or (c) contained in any document gratuitously sent or delivered to any person or thrown or left upon premises in the occupation of any person, or (d) broadcast by radio or television, or (e) disseminated by means of an Internet website or electronic mail.

(4)

(5)

It is a defence to a prosecution against a person for an offence under this section if the person proves that: (a) the person took all reasonable precautions against committing the offence, and (b) the person believed on reasonable grounds that the statement was true or (in the case of a statement that would reasonably tend to lead to a belief in the existence of a state of affairs that does not in fact exist) the person believed on reasonable grounds that the state of affairs existed, and (c) the person had no reason to suspect that the statement was false or misleading.

Despite any proceedings against a person for an offence under this section (whether resulting in a conviction or otherwise) the person remains liable to all civil proceedings as if the proceedings for an offence had not been taken.

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This section is to be read as being in addition to and not in derogation from any enactment or law relating to false or misleading advertisements or other statements.

52 Misrepresentation by licensee or registered person (1) A person who, while exercising or performing any function as a licensee or registered person, by any statement, representation or promise that is false, misleading or deceptive (whether to the knowledge of the person or not) or by any concealment of a material fact (whether intended or not), induces any other person to enter into any contract or arrangement is guilty of an offence against this Act. Maximum penalty: 200 penalty units.

(2) Without limiting the generality of subsection (1), a statement, representation or promise is taken to be false, misleading or deceptive if it is of such a nature that it would reasonably tend to lead to a belief in the existence of a state of affairs that does not in fact exist, whether or not the statement, representation or promise indicates that the state of affairs does exist.

(3) It is a sufficient defence to a prosecution for an offence under this section if the defendant proves that the defendant did not know, and had no reasonable cause to suspect, that the statement, representation or promise was false, misleading or deceptive.

The Trade Practices 1974 is a Federal Act that regulates conduct in trade or commerce engaged in by corporations. To further protect consumers the state regulation is governed by the Fair Trading Act, which basically follows the Trade Practices Act and regulates sole traders and partnerships engaged in trade or commerce. The result is that all real estate businesses are subject to this legislation.

The Trade Practices Act specifically covers conduct such as misleading and deceptive behaviour. The Act prohibits misleading or deceptive conduct and false or misleading representations. This can include not mentioning something (non-disclosure).

There are many factors that an agent needs to be aware of to avoid breaching the legislation. The mains ones are as follows: • Don’t make statements that you know to be untrue, i.e. don’t lie •

Don’t make predictions about the future (prices, market movements etc) unless you have some factual evidence to back them up.

•

Don’t give unrealistic opinions or estimates of price.

•

Don’t advertise or offer something unless you intend to supply it as offered.

•

Don’t remain silent when you have a duty to disclose something that may have a particular effect on a client or customer in the transaction.

The legislation is specific in relation to the promotion or sale of an interest in land.

Land includes all property or buildings on the land and interest includes a lease, license, easement or any other form of ownership. Therefore the legislation applies to the sale or rental of any land and anything already on it, or being built on it.

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The specifics include the: • location of the land •

price

•

characteristics of the land

•

use to which the land can be put (lawfully or otherwise)

•

existence or availability of any facilities associated with the land

You must be truthful in what you say someone can do once they purchase or rent the land or property. A reasonable basis is required for all statements.

Most promotion puts a positive spin on a feature and usually outlines the benefits to the customer. This is fine if the writer makes their meaning very clear.

If the prospective purchaser or tenant misunderstands the message and expects benefits that are not there, they will be dissatisfied with your services. So it is not only important to be accurate due to the legislation but also for the sake of your reputation and future business.

The Australian Competition and Consumer Commission (ACCC) and the Real Estate Institute of Australia (REIA) have produced a booklet titled Fair and Square: a guide to the Trade Practices Act for the real estate Industry which is recommended reading for agents to ensure their business practices are in line with the legislation.

This booklet refers to cases of companies that have been prosecuted under the legislation. The Trade Practices Act allows for the use of sales ‘puffery’ in the promotion of goods or services.

‘Puffery’ has been described as exaggerated, fanciful or vague claims about a product or service that no one is expected to treat seriously. Therefore the message itself can include ‘puffery’ or obvious exaggeration provided it is not misleading. For example, an advertisement that states ‘this view can never be built out’ may need substantiating, because the purchaser may buy the property on the strength of that, but if it says, ‘365 days of golden sunsets’, it is clearly puffery.

The problem is that whilst the surroundings and lifestyle may be the main leasing or selling points and affect the price, the tenant or buyer can only enjoy what is contained within the parcel of land. You cannot lease or buy a view. It just comes as part of the package and may affect the leasing or buying decision.

The Trade Practices Act 1974 and the Fair Trading Act 1987 (NSW) are the primary pieces of legislation protecting consumers in NSW today. They deal with unfair business practices and include: •

False or misleading representation

•

False representation, misleading or offensive conduct in relation to land

•

Misleading & deceptive conduct

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•

Unconscionable conduct

Trade Practices ct 1974 - Sect 53 and Fair Trading Act 1987(NSW) Sect 44 44 False representations (TPA s 53) A person shall not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: (a) falsely represent that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use, (b) falsely represent that services are of a particular standard, quality, value or grade, (c) falsely represent that goods are new, (d) falsely represent that a particular person has agreed to acquire goods or services, (e) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have, (f) represent that the person has a sponsorship, approval or affiliation the person does not have, (g) make a false or misleading representation concerning the price of goods or services, (h) make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods, (i) make a false or misleading representation concerning the place of origin of goods, (j) make a false or misleading representation concerning the need for any goods or services, (k) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy, (l) make a false or misleading representation concerning a person’s rights or obligations under a residential tenancy agreement (within the meaning of the Residential Parks Act 1998) under which the residential premises consist of a residential site in a residential park or a moveable dwelling on such a residential site (within the meaning of that Act), or (m) make a false or misleading representation concerning a person’s rights or obligations under a village contract (within the meaning of the Retirement Villages Act 1999), or (n) make a false or misleading representation concerning a person’s rights or obligations under an occupation agreement (within the meaning of the Holiday Parks (Long-term Casual Occupation) Act 2002) under which the residential premises consist of a site in a holiday park (within the meaning of that Act).

An agent cannot, in the sale or promotion of a property, make a false representation as to the property. For example:

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If an ad states that a new townhouse development has brand new kitchen appliances but they are actually second hand, taken out of a training kitchen or advertising that a property has “guaranteed rental income for 12 months’’. This infers that there will definitely be a tenant and income from the property for 12 months.

False representations as to future events Trade Practices Act 1974- Sect 51A and Fair Trading Act 1987 (NSW) Sect 41 False representations as to future events refers to any situation or circumstance that will occur in the future. The Act defines this as: 41 Interpretation (TPA s 51A) (1)

For the purposes of this Part, where a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the person does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

(2) The onus of establishing that a person had reasonable grounds for making a representation referred to in subsection (1) is on the person.

(3) Subsection (1) shall not be taken to limit by implication the meaning of a reference in this Part to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.

For example: if a local high school is only proposed, the ad for the local subdivision cannot include the promotion of the high school nearby.

Trade Practices Act 1974- Sect 53A and Fair Trading Act 1987 (NSW) Sect 45 45 False representations and other misleading or offensive conduct in relation to land (TPA s 53A) (1) A person shall not, in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of an interest in land or in connection with the promotion by any means of the sale or grant of an interest in land: (a) represent that the person has a sponsorship, approval or affiliation the person does not have, (b) make a false or misleading representation concerning the nature of the interest in the land, the price payable for the land, the location of the land, the characteristics of the land, the use to which the land is capable of being put or may lawfully be put or the existence or availability of facilities associated with the land, or (c) offer gifts, prizes or other free items with the intention of not providing them or of not providing them as offered.

(2)

A person shall not use physical force or undue harassment or coercion in connection with the sale or grant, or the possible sale or grant, of an interest in land or the payment for an interest in land.

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(3)

Nothing in this section shall be taken as implying that other provisions of this Act do not apply in relation to the supply or acquisition, or the possible supply or acquisition, of interests in land.

This relates to the false representation or other misleading or offensive conduct in relation to the sale, possible sale, or promotion of sale of an interest in land. These transactions are not to be misleading or deceptive in anyway, the agent cannot advertise using false information or give out false information in relation to land.

For example: If rural land is promoted for sale stating that all services are connected, this indicates that the land has useable services such as electricity and water.

However if the services are not yet connected, but are only planned this needs to be stated in the advertisements.

Trade Practices Act 1974- Sect 52 and Fair Trading Act 1987 (NSW) Sect 42 42 Misleading or deceptive conduct (TPA s 52) (1) A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Nothing in this Part shall be taken as limiting by implication the generality of subsection (1).

For example: promoting a property with magnificent harbour views but knowing those views are to be obstructed by a new development now approved by council.

Trade Practices Act 1974- Sect 51AB and Fair Trading Act 1987 (NSW) Sect 43 43 Unconscionable conduct (TPA s 52A) (1) A supplier shall not, in trade or commerce, in connection with the supply or possible supply of goods or services to a consumer, engage in conduct that is, in all the circumstances, unconscionable.

(2) Without limiting the matters to which the Supreme Court may have regard for the purpose of determining whether a supplier has contravened subsection (1) in connection with the supply or possible supply of goods or services, the Court may have regard to: (a) the relative strengths of the bargaining positions of the supplier and the consumer, (b) whether, as a result of conduct engaged in by the supplier, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier, (c) whether the consumer was able to understand any documents relating to the supply or possible supply of the goods or services, (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer (or a person acting on behalf of the consumer) by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services, and (e) the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from a person other than the supplier.

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(3) A supplier shall not be taken for the purposes of this section to engage in unconscionable conduct in connection with the supply or possible supply of goods or services to a consumer only because the supplier institutes legal proceedings in relation to that supply or possible supply or refers a dispute or claim in relation to that supply or possible supply to arbitration.

(4) For the purpose of determining whether a supplier has contravened subsection (1) in connection with the supply or possible supply of goods or services to a consumer: (a) the Supreme Court shall not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention, and (b) the Court may have regard to conduct engaged in, or circumstances existing, before the commencement of this Act. (5) (Repealed) (6) A reference in this section to the supply or possible supply of goods includes a reference to the supply or possible supply of goods for the purpose of re-supply or for the purpose of using them up or transforming them in trade or commerce.

Doc ID: CPPDSM4014A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 63 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\17. CPPDSM4014A\CPPDSM4014A - Workbook (L) eLearning.docx

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ANTI-DISCRIMINATION LAWS The law states that you, or your agent, must not discriminate against anyone, or harass them, because of their: • race (colour, nationality or descent) • sex (male or female) • pregnancy • marital status (e.g. singles or unmarried mothers) • disability (physical, intellectual or psychiatric disability) • homosexuality (gay men and lesbians) • age (both young or old) • transgender (transsexual).

It is also against the law to discriminate against a person because of the race, sex, pregnancy, marital status, disability, homosexuality, age or transgender of their relatives, friends or associates.

As long as you are not discriminating on one of the above listed grounds you may rent to whoever you like. If you do not want smokers in your premises or tenants with pets, or if you reject an application because of a poor tenancy history or do not think the tenant can pay the rent there is no law to stop you from declining an application for that reason.

You should be aware that you may be liable for discriminatory acts by your agent. For example, if you tell the agent not to rent the property to 'foreigners' and the agent carries out those instructions. In that case both you and the agent may be liable. It is no defence for the agent to say she or he was simply carrying out your instructions.

Direct and indirect discrimination Direct discrimination is when a person is treated less favourably than another person because of their race, sex, marital status etc. One example of direct discrimination would be refusing to rent to people with children.

Indirect discrimination is where there is a requirement (a rule, policy, practice or procedure) that is the same for everyone, but which has an unequal effect on particular groups (for example, women, people of certain races, young people).

Unless this requirement is 'reasonable having regard to the circumstances of the case' (Anti-Discrimination Act) it is likely to be indirect discrimination.

Doc ID: CPPDSM4014A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 64 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\17. CPPDSM4014A\CPPDSM4014A - Workbook (L) eLearning.docx

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These are examples of possible indirect discrimination: • setting more restrictive standards, such as a higher than necessary income • requiring all younger tenants to have one of their parents sign the lease as a co-tenant when you know that they do not intend to live in the premises • having an across the board 'no pets' policy which also excludes the needs of disabled tenants, such as those with a guide dog • requiring all applicants to have a proven rental history for a minimum number of years, which, for example, could exclude young people trying to rent their first home • placing unrealistic restrictions on the number of occupants permitted which, for example, could exclude those who are pregnant, or • having a complicated and long application form which may, for example, deter recently arrived migrants from applying.

One fair selection process is to rank people in order of when they lodge their application and then assess each application in turn for their capacity to pay the rent and maintain the property.

Doc ID: CPPDSM4014A - Workbook (L) eLearning Date: 28/03/2018 Developed by: SL Version: 6 Approved by: CEO P a g e | 65 File Location: S:\Learning & Assessment Resources\Real Estate\CPP40307 Certificate IV in Property Services (Real Estate) NSW\Assessment Tools\17. CPPDSM4014A\CPPDSM4014A - Workbook (L) eLearning.docx

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