Real Estate Assignment — Queensland AustraliaPrepare for auction and complete sale Essay Example
CPPDSM4019A: Prepare for auction and complete sale
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Mr and Mrs Thurtell are an elderly couple who have asked you to conduct a listing presentation for them. Mrs Thurtell grew up in the property and has lived there all her life. The Thurtells have been married for 55 years and their children have now moved away from the area.
The house is on an attractive large block of land (2000 sq.m) and has some river front access with an established old jetty. You believe there will be high interest in the property from developers. Your estimated price range for the property is $680,000-$700,000.
The home was originally a small cottage which has had two noticeable extensions over the years. The property appears to be structurally sound and has been kept in very good condition. Mr Thurtell’s pride and joy is his established vegetable garden located at the end of the yard near the river.
The house has great sentimental value to the couple. However, Mrs Thurtell’s health is now failing and the couple has reluctantly decided to sell and move into a retirement community. Their unit will be ready in approximately nine weeks. The Thurtell’s daughter is staying with the couple until the home is sold and will be assisting them through the sale and with moving.
The Thurtells are concerned about a number of matters:
How long it will take to sell the property as they do not want to miss out on their unit at the retirement village
How much money it will cost to sell the property, as they are on restricted pensions
About people walking over the vegetable garden
The general disruption to their lifestyle with lots of inspections. In particular, Mrs Thurtell needs plenty of rest and is unsettled about lots of inspections with short notice.
As part of your listing process, you will need to verify the ownership and material facts. What special issues will you need to check? You should be able to comment on at least 2 matters.
< The first issue would be to verify that Mr. and Mrs. Thurtell own the property. I will obtain the title deed from Mr. and Mrs. Thurtell and conduct a search to make sure that it is them who own the property. The search conducted will show that the Thurtells are genuine and serious sellers thereby attracting serious buyers. Secondly, I would ask the Thurtells to mention to me any inclusions and exclusions regarding the property’s sale. This would enable me to give the right kind of information to prospective buyers thus avoiding confusions and disagreements during or after the auction. >
The Thurtells have decided to list their property with you for sale by auction. How would you complete the following items in the Auction Agreement:
Instructions relating to the “reserve price”
Agent’s estimated selling price range
Special instructions (relate this clause to the Thurtell’s property and the issue of the vegetable garden
< The reserve price will be left open, up until the last days of the auction campaign. This will be a reflection of the feedback received by customers who have visited the property during the auction promotion period. Selling price range is an approximation of what the property would fetch in the market according to valuers report or informed prospective buyers. In this case it will be set at $680,000-$700,000. In relation to the vegetable garden, I would ask the Thurtells to give full disclosure. I would then mention that such instruction impedes ‘clear title’ to the prospective buyer.>
You are now required to prepare a 30 day auction marketing timeline for the Thurtells. Your timeline should highlight points in the auction campaign where you would book the auctioneer, erect signage, book and place pictorial advertising, open for inspections, the pre-auction meeting with the clients, culminating in the day of auction. Please ensure that you allow for a lead-up time of at least 5 days to the launch of your campaign.
The first 24 hours will involve arranging for the property photography and book the auctioneer. On the second day, I will collect the available photographs and select which ones to use in brochures, signage and internet. Erection of the signage would be done on the third day before the inspection and directional signage will be part of this. At the end of the first week, the first open inspection will be conducted. Weeks 2-3 will involve giving reports to the clients, showing property and adverting. The pre-auction meeting with the Thurtells will take place 24 hours prior to the auction. >
Given the market research and price advice contained in your CMA for the seller, and the prescribed requirements for quoting potential selling price to consumers, describe exactly what you would say to a customer enquiring about the potential selling price of the Thurtells property.
< Since the sell price range is supported by several sources, I will not disclose to the potential customer the potential selling price. I will give him the highest price which is $700,000 and tell him that the property may be put up on auction if a buyer is not found soon. Due to this, a reserve price will have to be set and this will be based on the property’s market price range. By disclosing the lowest price the seller is willing to have will compromise the auction process and prevent the Thurtells from getting a favourable offer from other buyers.>
You convince the Thurtells that the property should be auctioned. You now need to start preparations for the auction. Describe how you would prepare for the auction. Please include in your answer what handouts will be required, and what documents must be displayed for public perusal during the auction sale.
< Before the auction, I will make sure that there are plenty of brochures available for those attending the auction. I will also have to confirm whether the contract file is in two copies along with other relevant disclosure statements if required. I will counter check the title of the property to ascertain that it is the same to avoid last minute confusions. I will also need the bid to be pencilled and so I will arrange for a colleague to do this. Spotters would be made available and on call in case the auction turns out to be busier than expected.>
You have a number of interested buyers who have indicated that they will be attending the auction. Please explain what required legislative processes you must follow with these buyers to ensure that your procedures comply.
< I will have to ascertain to the buyers whether GST will apply to the sale and ensure that the terms relating to GST payments are clearly announced to them. I will explain the options the first being GST-Inclusive where the knock down price of the property will be its sale price. The second option is where the sale would be GST-exclusive and here the knock down price will attract 10% on selling price. The third option would be sale under GST Margin Scheme where the sell price and GST is payable by seller at the rate of 1/11th of the margin. >
While you are signing up the successful buyers on contract, your associates and assistants should also be actively marketing to the unsuccessful bidders. Discuss at least 3 activities that they should be undertaking to build your client base?
< They may talk give them pointers on how to bid better the next time a property will be put on auction. They may also show them a portfolio of other properties that are on auction to give them the sense that you really are interested in them as clients and still want them to win future bids. My associates can also get the contacts of the unsuccessful bidders and assure them that they will be contacted in case a prospective seller wants to put his or her property on auction thus saving them time looking around for properties on auctions.>
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CPPDSM4019A: Prepare for auction and complete sale
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