CPPDSM4022A Introduction to the Property Purchase Method

Location: A house that falls within a radius of three km of the city

Size/Style: A modern styling with a balcony the bigger the balcony the better, A parking sport, two bedroom and a wardrobe 

Price Range: between $700000 - $800000

Preferred Features: A huge balcony, a lot of wardrobe space a parking sport and preferably a two bedroom.

Records of Inspection

Question 2

You want to assist Akira to find properties that match her requirements, and to help her decide which properties to view. REIQ Realty currently has several units for sale in Regatta. You will find the relevant listing information for these units in the Appendices at the back of your manual for this unit. These must be referred to in order to enable you to answer the following questions. Identify three listings that REIQ Realty currently has that you believe Akira should view, and the information you think is most relevant about each one.

Question 3

One of the properties on your list in Q2 is currently tenanted, although will be vacant soon. Akira would like to view the property with you as soon as it can be arranged. To organise the appointment, complete the following RTA Form 9 Entry notice showing the minimum permitted notice if the notice is hand delivered to the tenant’s letterbox on 11/07/2016 slightly before 10am.

How much time did it take for you to complete this form?

Entry Notice (Form 9)

Names and Address of the tenant/s

1. Address of the rental Property (If different from the above)
2. Notice issued by

 Property owner Property Manager Other Authorized person (Secondary Agent).

5. Entry is sort under the following grounds

• Inspect the property (7-day notice)
• Inspect he property – short tenancy moveable dwelling (24hours)
• Carry out routine repairs or maintenance (24hours notice)
• Comply with the fire and emergency services (Domestic smoke alarms) Amendment Act 2016 (Qld) in relation to the smoke alarms (24hours notice)
• Comply with the electric safety act 2002 in elation to approved safety switches (24 hours’ notice)
• Show the property to the prospective purchaser or tenant (24 hours’ notice)
• The property owner/manager believes on reasonable grounds, that the property has been abandoned (24 hours’ notice)
• Allow a valuation of the property to be carried out (24 hours’ notice)

Question 4

Having viewed the properties and after some discussions, Akira has decided to make an offer to purchase the property at 115/93 Flite Street, Regatta. She wants to offer $725,000, subject to finance, subject to a satisfactory building and pest inspection and with a 30-day settlement. As the listing agent, you represent the seller in the negotiation. Check your listing information for this property and assess the likelihood of Akira’s offer being accepted by the seller. As a skilled negotiator for your client, consider what you should attempt to do with this offer before presenting it to the sellers. Your answer needs to show what you will actually say/ask/suggest to Akira. You should develop an answer that is persuasive, relevant, and professional.

Response:

You have made the right choice since the picked property has all the requirements you have identified before but a slight issue rises in relation to the amount of money you are willing to offer for the job. The property has multiple features that have led to the increased pricing. A slight increment of the buying price would reflect the value of the property, features such as the walk-in wardrobe increases the expense of developing, the two huge balconies, and the modern design. These are some of the additional features that have been integrated within the house.

Also, the security of the building has seen the buildings value appreciate. The bedroom gives one a beautiful river view and the city view from the living room makes the house an elegant place to live, invite friends and have a family. The house has covered most of the required features (Sui Pheng, L. and Lee, S.H., 1993). A slight increase to the buying value will really be appreciated. As seen from the listing, the house pricing is $805 000. The price could be slightly negotiable. This means a few dollars can be reduced from the price given. This would be gladly accepted by the owner of the management and you are guaranteed an amazing modern, spacious and excellent property (Day, E. and Nourse, H.O., 1991). Kindly consider the offer and give use your consideration in relation to the pricing of the house. 

Question 5

On Monday 18th July 2016 the contract is eventually signed by Akira as the prospective buyer for a sale price of $770,000. The seller is not available to meet with you until late that evening, so you present this offer to the seller when they are available. The seller accepts and signs the contract. The seller then asks you if you will wait until morning now to let Akira know that her offer has been accepted, given how late it is. Taking into consideration that the buyer is not aware that the offer has been accepted, how would you respond to the seller comments?

Response:

Since from the first introduction to the client Akira, she had clearly specified that the best time to conduct a meeting with her was either in the afternoon or in the evening, the decision should rely on this information. So, the appropriate response to the seller would be, it is ok for me to inform Akira and et her know that her offer has been accepted. Since its in the evening am sue she will be in a position to show up for the concluding of the contract rather than push it forward to the next day which means that she will be available the following day in the afternoon or in the evening (Antoniades, H. and Eves, C., 2013). So, to avoid all these incidences,

it is appropriate to finalize all the dealings while every party is available. Again, the postponing process involves the introduction of different variables such as the ability of the seller or the buyer having second thoughts on these decisions which would introduce other an anticipated variable for the case. Hence the need to finalize the project. Also, since the seller got the chance to wide up on all their activities then show up in the evening, it is cartious to also give the buyer the chance to choose the time she is more comfortable appearing for the meet. Professionally one is expected to disclose the status of the transaction progress to the involved parties.

Despite the fact that Akira has not been updated on her approved proposed price, it is unethical to withhold this information from the buyer or the client (Crews, G.L., 2004). It is ethical to let the client decide on how to respond to the information. Also, appreciating the information, the client has provided such as the different times she is available helps build one’s reputation since the client is able to identify your focus on information and dedication to your work (Antoniades, H., 2013.).

This then leaves the matter at a point where you inform Akira on the progress and ask her if she is available for the evening meeting or should it be pushed forward to the following day. One of the key elements under contract law is communication. This means that one is bound by the contract law to ensure they effectively communicate with the client and the sellers update is information that need or requires the response from the client. Hence making communication With Akira very important.

Question 6

You call Akira to let her know that the contract is now fully signed and you date the contract the 18th July 2016. Akira asks you about insurance on the property. As a salesperson you are familiar with the terms of the REIQ/QLS Queensland contract, and what the contract terms say about when the property is at the buyer’s risk. What will you actually say to Akira about when the property is at her risk? Your answer must specify the date and time that applies to Akira.

Your reply to Akira:

The property has he seller’s insurance till the minute the property is transferred to your ownership. According to the corporate act 2001 the seller might want to check that their insurance risk that may rise from a property inspection and if it doesn’t, the seller might want to extend the cover so that it does, for more information I would recommend a well-informed move by approaching a company that holds an Australian financial Service License (AFSL) they will be in a way better position to advice on the matter (Batt, C., Antoniades, H., Rowe, T. and Stowell, R., 2015). 

But as per now all the insurance cover of the property is under the seller, any risks as per the current state is to be incurred by the seller unless the risks are associated with the agency’s negligence. This governs the purchase period insurance. It is the responsibility of the agency to minimize the risks of things such as theft, or property damage during the period of inspection (Agboola, A.O., Ojo, O. and Amidu, A.R., 2012).

Question 7

You provide Akira with the copy of the fully signed contract on the morning of Tuesday 19th July, 2016. Akira later sends you the following email:

From: Akira Nakama

Sent: Wednesday 20/07/2016

To: (your name)

Subject: Cooling off period ………………………………………………………………………………………………………………………………….

Hi (your name) Something I forgot to ask you this morning – when does the cooling off period for my contract end? Don’t’ worry, I’m not having second thoughts but I recall you mentioning it and can’t remember when it ended. Thanks Akira

Write a response to Akira’s email. Your reply must specify a date and time when her cooling off period will end.

From: Students Name

Sent Wednesday 20/7/2016

To: Akira Nakama

Subject Cooling Off Period

Hi Akira

The cooling off provision for residential sales lasts for a duration of 5 days and ends on the fifth working day at 5pm. This provides the client enough time to think about the whole transaction, clear up on any issues that may be unclear at the moment so as to ensure the client receives satisfactory services. For our transaction since the signing was on 19^th July 2016 then the fifth day will be on Monday 25^th July 2016. Saturday and Sunday are not official days hence the day passes on to Monday the official day (Vandenbergh, M.P., 2005).

Take the time and don’t feel pressured to make a decision you feel you would need any further information regarding the venture. A home is a place that you go back at the end of very day for years and feel comfortable hence the 5 days to completely think about everything and conclude.

Question 8

On 19th August 2016, settlement has now been confirmed by both the buyer’s solicitor and the seller’s solicitor, and you are instructed to disburse the money held in the agency trust account to the seller, minus the agency commission. This will require you to provide an account of sales/tax invoice to the client, and update agency financial records. Using the information shown in the relevant documentation (as explained above), calculate the relevant commission and client settlement figures. Set out your calculations below to show what will appear on the account of sale. The format can vary but must clearly show how much is held in the trust account, and then how it will be distributed. N.B. Advertising funds were paid by the seller at time of listing, and as such will be accounted for separately (not required as part of this question). Your answer should clearly show

• The date
• All relevant amounts
• Who is receiving the amounts
• A simple explanation of what each figure represents
• Disclosure of any rebates or benefits the agency received from another source as per the Form 6

Calculation

Dates 19^th August 2016

Financier (bank)

$700,000

$70000 Akira Nakama

Total amount $770, 000

Deposit in the trust account

10/100 * 770,000 = $77, 000

Commission to the agent is 3.3% of the actual sale price of the property including GST

3.3/100 * 805,000 = $ 26, 565

All Relevant Amount

Agents commission as per the agreed percentage with the client and as per the calculation the amount totals $ 26, 565. The seller receives the rest this is a total of; $741,081

A simple explanation of what each figure represents

 There are different amounts of money changing hands and it is important to identify what each figure means. First, we have the buyer; Akira Nakama, she introduced the bank which gave her $700000 then on her hands she had $70,000 this gives us the total of $770,000 that is the exact amount of capital needed to settle the contract. An agreement between the agency and the buyer clearly stipulates the percentage share the agency is to take and goes down to 3.3%. After the calculation this has summed up to $ 26, 565. The balance of deposit to seller becomes deposit in trust = $77, 000 (trust account) – $ 26, 565(Commission) = $ 50,435

At the conclusion of the sale, you would like to keep Akira on your database and stay in touch with her in case she has further real estate requirements that REIQ Realty could assist with. As a first step you want to find out whether Akira was happy with the agency service provided, whether she may have any other current or future real estate needs, and whether she would be happy to deal with you and REIQ Realty again as a seller, or a buyer. Consider the service you have provided and develop 6 effective survey questions you will ask.

Questions

1. How would you rate the services offered to you by the agency in a scale of 1 to 10 with 1 being the lowest and 10 being the highest score?

1 to 10

1. What’s the area in between the services you received you feel would need improvement so as to improve the value of service you would want to receive from the agency for the next time
2. How did you evaluate our terms of operation, are they considerate, fair our inconsiderate and un fair
3. Are the agency’s commission rates expensive or are they manageable
4. Did the agency meet your expectations regarding the house you ended up with and did it show value for money once you bought it
5. Would you have gone for another pick incase you were given the chance to pick a different house And if yes why would you not pick your fist pick and does the decision have any connection with the services offered to you by the agency
6. Has the agency overstated any of its listing or were the details precisely as defined in the listing
7. Would you recommend the agency to a friend or another client in case you had any If not kindly provide a reason so that the agency may address the issue.
8. In case you were to venture in to the real estate industry would you consider our agency as your best pick
9. Did the agency walk you though all the steps that you went through clearly before making your decision

References

Agboola, A.O., Ojo, O. and Amidu, A.R., 2012. Investigating influences on real estate agents’ ethical values: the case of real estate agents in Autralia. International Journal of Strategic Property Management, 16(3), pp.298-315.

Antoniades, H., 2013. Real Estate Education Throughout Australia: Are the fields of knowledge in a diploma qualification more advantageous than a certificate IV qualification?. In International Conference of Education, Research and Innovation. International Association of Technology, Education and Development (IATED).

Antoniades, H. and Eves, C., 2013. Real estate agents: why is education important?. In Construction, Building and Real Estate Research Conference (COBRA). RICS.

Batt, C., Antoniades, H., Rowe, T. and Stowell, R., 2015. A review of training for licensed occupations in the New South Wales property services industry. A Review of Training for Licensed Occupations in the New South Wales Property Services Industry.

Crews, G.L., 2004. Real Estate Education on the Run: The classroom comes to town. 10 th Pacific Rim Real Estate Society (PRRES) Conference. In Annual Conference Proceedings, Thailand.

Day, E. and Nourse, H.O., 1991. Client selection of a residential real estate agency or agent. Journal of Professional Services Marketing, 6(2), pp.81-96.

Rutland, S.D., 2005. “Buying out of the Matter”: Australia's Role in Restitution for Templer Property in Israel. Journal of Israeli History, 24(1), pp.135-154.

Sui Pheng, L. and Lee, S.H., 1993. Effectiveness Of The Managing Agent: Property Management And Maintenance. Facilities, 11(9), pp.5-15.

Vandenbergh, M.P., 2005. The private life of public law. Colum. L. Rev., 105, p.2029.