Answer – 01
|
1 |
Market Demographics |
Plan should be formulated on the basis properties available for SALE and those available for RENT. |
|
2 |
Competitors |
Service charges for offering property management services will depend on the charges offered by competitors as well as on the demand and supply position of properties. |
|
3 |
Staffing |
Expenses are a major factor in finalizing the service charges and this will depend on the number of employees. Experienced and knowledgeable staff also helps in getting better rates from clients. |
|
4 |
Point of different |
Offering services in a conventional way is the normal norm in the market. There should be a slight difference in the approach adopted for interacting with customers and giving them services which are all-inclusive. |
Answer – 04
Servicing the clients is the prime motive of any service agency but recovering the establishment costs is a policy matter for the agency. If the markets are working on the trend of meeting the advertising costs from their own incomes and other service providers are not directly charging the clients for advertising expenses, then XYZ also cannot do that. But XYZ can formulate a policy of cutting down on expensive advertising modes and adopting avenues where the cost is included when quoting service charges to the clients.
Answer – 05
The lender is going to ask for the following information –
Answer – 03
|
Account Type 1 |
Checking Account |
|
Purpose |
For payments related to day-to-day expenses |
|
Government Body |
Financial Ombudsman Services |
|
Account Type 2 |
Savings Account |
|
Purpose |
Depositing amounts which are for long-term use |
|
Government Body |
Answer – 04
|
Journal |
Service Supplies Journal |
|
Explanation |
In this journal, every bill received from Bright Spark Electrical is CREDITED to the ledger account of Bright Spark Electricals and DEBITED to Service Supplies account. For every client, there can be a Sub-head in the name of the client under the Service Supplies Account. For example, if the services have been provided to Mr. Simpson, then the Service Supplies Account will show – Service Supplies Account A/c Mr. Simpson. The service tax charged by Bright Spark Electricals will be DEBITED to Service Tax account, which can be general account for all properties being managed. |
Answer – 05
The two key risk management strategies – surveillance and price-setting need to be addressed at all times. This can be managed by subscribing to the services offered by the RTBA for getting regular updates about the position of the bonds lodged with the authority. This will keep XYZ updated about the various tenants and their bonds with RTBA.
Answer – 06
Whenever an Electronic Fund Transfer (EFT) request is made online, it should be mandatory for the accountant to enter the purpose of the payment and to whom it is being paid in the remarks column. All EFT transactions are regulated under the ePayments Code. This code is administered by the Australian Securities and Investments Commission (ASIC).
Answer – 07(a)
|
Yes |
YES |
No |
Answer – 07(b)
This amount is against services to be rendered to the client. The payment will be held in the client’s ledger account and a statement will have to be submitted to the client after the advertisement expense has been incurred.
Answer – 07(c)
It can be immediately deposited in the Checking Account of the trust.
Answer – 07(d)
Because XYZ Realty will be making payment to the advertising agency against the advertisement charges.
Answer – 07(e)
The Income and expenditure account will not be affected by this amount. This money is being held ‘On Account’ basis for the client and shall be paid for the advertisements to be issued on behalf of the client. After the advertisement bills have been settled, the difference will be adjusted with the client.
Answer – 01
This transaction will be reversed in books of XYZ Realty by CREDITING the BANK and DEBITING the RENT account through a JOURNAL voucher.
Narration to be given is – Cheque received from RENT returned unpaid from bank.
Answer – 02
In manual accounting, the accountant will prepare a Journal Voucher. Credit portion will be filled with Bank’s name and amount of the cheque. Debit portion will be filled with name of the party whose cheque has been dishonored and the amount. This voucher will be entered in the Journal Book and from there to the respective account heads of the bank as well as the party.
Answer – 04
Answer – 01
|
1 |
The current market demand for this type of property |
Demand depends on availability and an affordable and competitive price. Before putting up a property on auction, the prime requirement is to set the ‘Reserve Price’ for the property. To set the reserve price, the agent must make a comparative study of similar type of properties in the same area, having the same standard of construction and with similar amenities and surroundings. This will give the agent a correct idea of what should be the reserve price. |
|
2 |
The vendors attitude |
The other important factor for making an auction successful is the attitude of the vendors towards the property. This can be made favorable by highlighting the advantages which the property has in comparison to similar type of properties in the same area and at the same price. |
|
3 |
The style, type or location of the property |
When a property is available for sale, the vendors first look at the type of the property. A single storey house offers advantage of additions at buyers will. Second option considered is the location. A corner house or a house adjacent to a park commands more price. Style is sometimes lucrative but is the last factor on a buyer’s mind. |
Answer – 02
A seller choses the option of auction because he thinks this will attract a variety of buyers, from local as well as state and national level. Hence, apart from offering a suitable ‘Reserve Price’, the auctioneer must have the infrastructure to advertise the property on state and national level. This will provide maximum exposure at the minimum expense to the seller. Going online is another good option for attracting buyers to an auction as buyers tend to go online for finding out about better opportunities. In short, the auctioneer must have an advanced advertising strategy with exclusive marketing packages so to reach maximum people for better results.
Answer – 05
Under such conditions, the first thing which the seller should do is to take a break and think all over again for his selling strategy. Think about a completely fresh selling strategy, change the agent and create fresh write ups for the print advertisement. Go online and present the property in a revived format. This will get the seller some new buyers who may wish to see the house and this time the property is in a stronger position than before. It happens sometimes that a house becomes more attractive for buyers when the seller plays hard to get.
Answer – 06
Office of the Australian Information Commissioner (OAIC) is the controlling authority for regulating use of personal information of individuals. Any information, which is provided by an individual, for a specific purpose can only be used for that purpose and cannot be used for personal gains by any other individual or organization. This can result in legal action under the Privacy Act, 1988.
Answer – 02
After entering into the agency agreement with the Clark’s with regard to managing the property as their agent, Rule 29 states that I should immediately prepare an inspection report of the property and submit it to the concerned authority with a copy to the Clarks. In the inspection report, it is mandatory for me, as the agent, to include the following details in the report. It is also mandatory for me to sign the report as a valid license holding agent.
Answer – 03
It is always better to conduct the auction at the site, as its constant backdrop provides a sense of confidence in the buyers. This is also useful in case the property has a lawn as it helps in instant showcasing of the entire property.
Answer – 04
Although a reasonable time is always recommended for campaigning, as the agent of Clarks, I have also to keep in view that a lengthy interval between owner’s decision to sell and the time when auction is scheduled to be held can become detrimental to the purpose of the auction. A long gap allows the buyers to make choices and compare the deal with other available options. The most reasonable timing of the campaigning is two weeks.
Answer – 06
There are no special provisions required for the Clarks when they attend the auction. They should be made to sit in the first row, so that they are in constant touch with the auction process without being in direct contact with the prospective buyers.
Answer – 07
It is appropriate for the auctioneer, who is also the agent representing the owner, to inspect the property at least two weeks before the date of auction. This is considered appropriate because, as the auctioneer and agent, I would have time to confirm the details about the property and make a comparative analysis with similar type of properties in the area with respect to the reserve price. This will also give the owners time to make any amendments in the details which are required to be furnished to the authorities.
Answer – 08
Prior to the auction, the seller and his agent are responsible for preparing a Contract Document, which needs to be displayed at the Auction Site for inspection of the bidders. It must be accompanied by three documents, namely – the Title of the Property to be auctioned; a Drainage Diagram of the property; and an approved Zoning Certificate of the property. The following table shows the search location for these documents.
|
Copy of the Title Document |
Search with the Local Land Department |
|
Drainage Diagram |
Search with the Local Council |
|
Current Zoning Certificate |
Search with the State Land Department |
Answer – 09
As an agent as well as the auctioneer for the property which is owned by the Clarks, it is customary for me to ascertain that the following issues have been finalized by the Clarks and I have full details of these issues before conducting the auction.
|
The Reserve Price for the auction |
|
|
The Exchange Contract |
|
|
The Cooling-off Period |
Answer – 10
The Sale of Land (Public Auctions) Regulations, 2014 specify the auction rules, the information statement and the important announcements which are required to be made by the auctioneer before commencing the auction process. The Regulations prescribe substantial penalties which can be imposed on the owners and their agent in case of any breach of the auction rules. The Title of the Property to be auctioned; a Drainage Diagram of the property; and an approved Zoning Certificate of the property are the essential documents which are required to be placed for inspection of the bidders along with the Rules of the Auction which have been decided by the auctioneer and the owner of the property.
Answer – 01
Bidding is a process which has to be conducted within the laid rules under the Sale of Land (Public Auctions) Regulations, 2014 and any violation of the rules can lead to heavy penalties on the owner as well as the agent / auctioneer. Moreover, in most of the auctions, the frenzy of the bidders gets high and sometimes the bidders are unable to keep track of the progress which the bidding is making. Hence, to avoid any misunderstanding and to clear any doubts which a bidder may develop during the course of the auction, it is safer to maintain a continuous record of the bidding process.
Answer – 02
As an agent, it is his responsibility to apprise the auctioneer, in case the roles are being undertaken by two different individuals, about the following –
Answer – 03
As an authorized agent of the vendor, it is my duty and responsibility to look after the interests of the vendor. If a situation like this arises, I can always ask the vendor to step out of the room and we can discuss the relevant issues privately. In case I am also acting as the auctioneer, I can always put my colleague or my assistant to take charge of the bidders, engage them in details about the property and hold their attention till me and the vendor sort out the issues.
Answer – 04
The following issues need to be brought to the notice of the vendor by the agent and the auctioneer prior to starting the auction process.
This is the minimum price which the vendor decides to accept for the sale of the property. In SA it is mandatory to state the reserve price in writing prior to conducting the auction. In other states no such condition is imposed although all auctions in Australia are required to be governed by setting a reserve price which may not be declared openly.
This is the person, usually appointed by the vendor’s agent, who is responsible for keeping records of each bid at the auction. This is done to verify the process of the bid in case any dispute arises.
This is the bid which is usually placed on behalf of the vendor. It is mandatory for the vendor to declare any such bids to the auctioneer before the auction starts. These bids are governed by specific restrictions issued by each state and the vendor is restricted on the number of bids which he can place in each state.
The auctioneer can declare the property to be on the market, once the reserve price is reached in the auction bidding. This term states that from this moment onwards, the highest bidder in the auction will be guaranteed to purchase the property.
This situation refers to the point when the highest bid made in the auction has failed to meet the reserve price of the vendor. In such circumstances, after the conclusion of the auction, the auctioneer has the right to declare that the property has ‘passed-in’.
Answer – 05
It is mandatories in all states and territories, except Victoria & WA, that a bidder should first register himself with the agent by showing his ID proof prior to the commencement of the auction, especially if he wants to bid. It is thus not a legal procedure which the vendor followed. Under such circumstances, it is the legal obligation of the auctioneer to report the matter to the appropriate authority.
Answer – 06
Under such circumstances, the agent/auctioneer must follow the following two guidelines.
In case the auctioneer feels that the vendor is not happy with the results of the auction and the bidding is not approaching the required Reserve Price set by the vendor, then before proceeding to stop the auction, the auctioneer should call three times for any further bidding. Once it is established that there are no further bids coming at higher amounts then the auctioneer can proceed ahead and implement the second step noted below.
Based on the above step and in pursuing the wish of the vendor, the auctioneer can suspend the auction using the Three-call option. Then he can seek the opinion of the vendor for further instructions. However, the auctioneer must keep in mind that this can be only done prior to the auction process reaches the reserve price. By calling-off the auction, the auctioneer provides the vendor an opportunity to either adjust the reserve price or opt out of the auction process and sell the property through private placing, if desired.
Answer – 07
When a vendor decides to sell his property, through any mode which he prefers, he has to appoint an agent for managing the selling process and this is done by entering into an agreement with the agent. The agent, after becoming the authorized representative of the seller, is legally bound by the government regulations which govern such processes. Similarly, the seller is also bound by the legalities of the agreement. The terms and conditions of the appointment of an auctioneer, if it someone other than the agent, are also governed by the regulations framed by the state or federal government. In the agreement, which the seller enters with the agent and the auctioneer, the terms of payment are clearly stated. As per legal parameters, once the services of the agent and the auctioneer have been availed by the seller and he has no reason or complaint of dissatisfaction regarding the services provided by the agent and the auctioneer, he is legally bound to pay their fee. Especially under the circumstances as stated in this case study, where the decision of cancelling the auction has been taken by the vendor himself.
Answer – 01
|
Property 1 |
2 bedrooms, 2-bathroom unit city unit. Complex has a pool and gymnasium and is in the heart of the CBD. CMA indicates selling price between: $650,000 to $700,000. Rental CMA indicates possible rent return of $660 to $680 per week. |
|
Strategies |
ONLINE STRATEGY: Every real estate agent has a website. Develop the following tools on the website – Launch the property using the Company Newsletter – Email is one of the most effective forms of communication. It generates an instant and a higher response rate as compared to other online formats. A regular company newsletter will allow the customers to stay in touch with the valuable prospects being offered and it also provides a means of showcasing the latest activity, offers free information and builds relationships. OFFLINE STRATEGY: Advertise in Media through Traditional Outlets – Although advertising is making a shift towards online, still there are plenty of affordable, attractive and effective options available offline, such as newspapers, trade journals and local print ads. |
|
Property 2 |
3 bedroom plus study quaint colonial style cottage in outer suburb, approx.25klms to CBD although walking distance to train line. Cottage needs some TLC although is solid and liveable. CMA indicates selling price between: $490,000 to $520,000. |
|
Strategies |
ONLINE STRATEGY: Run Targeted Ad Campaigns with Google – Google AdWords is a fast and efficient way of targeting the potential investors online. Such advertising allows the agents to showcase their services and / or offers in specific locations through search results. They can also choose to display the property for prospective buyers visiting their website and even of their competitors. This is, in fact, the fastest way of getting in the front row of the likely prospects. OFFLINE STRATEGY: Advertise in Media – Your property’s photos create the much needed first impression. This is the most important marketing investment which an agent can make for impacting different touch points, such as brochures, listings, presentations and OMs. |
Answer – 02
Keeping in mind that the target buyers are mostly from affluent living background and prefer inner city living habits, my focus will be on promoting the following features of the property.
Answer – 03
|
Online media |
Reason for selection |
|
|
1 |
WEBSITE |
Our company website is well connected through links with the relevant pages of property sections both in the residential as well as the commercial sector. We have a dedicated email network which has a substantial data of prospective investors and buyers not only in the state but in the adjoining states also. |
|
2 |
Google AdWorld |
We have a dedicated presence on Google AdWorld. Our ads are created by professionals who are experienced and understand the real estate market. We select the contents of the advertisement on the basis of the features to be highlighted about the property and keeping in view the taste of the targeted buyers and investors. |
Answer – 04
|
Offline media |
Reason for selection |
||
|
1 |
PRINT MEDIA |
Our experience and reach in the print media is rich and exposure is large. We choose local/state newspapers, trade journals and real estate and social magazines depending on the type of property we are trying to promote and taking into consideration the reach of the media which we have selected. |
|
|
2 |
ADVERTISING |
We choose advertising through specific promotional materials which are specially targeted at the buyers and investors who would be interested in the property being promoted. |
Answer – 05
|
Marketing plan – (Estimated costs) |
|||
|
Property: 92 Simpson Road, East Hawthorn VIC |
|||
|
Owner: George Tucker and Ingrid Tucker |
|||
|
Address: 92 Simpson Road, East Hawthorn VIC |
|||
|
Date |
Media |
Estimated cost |
Type of advertisement |
|
1 May |
Local Newspaper |
$475.00 |
Display Advert: 6 cms x 1 column |
|
3 May |
Company Website |
$200.00 |
Feature Property Listing |
|
5 May |
Local Newspaper |
$75.00 |
Classified Advert of 5 lines |
|
8 May |
Major Regional Newspaper |
$510.00 |
Display Advert: 4 cms x 1 column |
|
12 May |
Major Regional Newspaper |
$150.00 |
Classified Advert of 5 lines |
|
15 May |
Local Newspaper |
$75.00 |
Classified Advert of 5 lines |
|
22 May |
Major Regional Newspaper |
$150.00 |
Classified Advert of 5 lines |
|
29 May |
Company Website |
$200.00 |
Feature Property Listing |
|
5 Jun |
Major Regional Newspaper |
$150.00 |
Classified Advert of 5 lines |
|
Total$1,985.00 |
(agent)$200.00 |
Client $1,785.00 |
GST inclusive |
Answer – 07
Bungalow for Sale
Original 1920 Californian Construction
Three bedrooms
Kitchen with 1940’s kookaburra gas cooker
Central bathroom with bath and toilet
Bungalow for Sale
First Owner Occupied
Original 1920 Californian Construction
Three bedrooms and Sitting room facing North
Central bathroom with bath and toilet
Answer – 08
Bungalow for Sale
First Owner Occupied Original 1920 Californian Construction
Three bedrooms and sitting room facing North
Kitchen with original 1940 kookaburra gas cooker
Combined lounge and dining with separate laundry
Central bathroom with bath, overhead shower and toilet
Answer – 09
Bungalow for Sale
First Owner Occupied
Original 1920 Californian Construction
Three bedrooms and Sitting room facing North
Central bathroom with bath and toilet
Answer – 10
Our progress report to the Tuckers will give them information about our advertisements on a weekly basis. The report will be sent through our official email. In the second email, we shall include the details of the responses which we have received on the basis our first week adverts. In the subsequent weekly emails, we shall keep the Tuckers apprised of the responses, progress which we are making through interactions with various prospective buyers and investors and the offers which we are receiving from the buyers and investors.
Answer – 11
|
Recommendation |
Explanation |
|
Preparing the Contract of Sale |
We have been able to shortlist three confirmed offers for the bungalow. The buyers are investors and want a copy of the Contract of Sale |
|
Settling the initial deposit to be asked from the buyer |
Since the negotiations are in an advanced stage of finalization, we must quote the initial deposit for closing the sale |
Answer – 12
There are two reasons for keeping the Tuckers informed about the success of the marketing campaign.
This transaction is about an old-style bungalow, which not only has a sentimental value for the Tuckers, it also is their stepping-stone to their dream home in the retirement village.
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