Case study 4

Read through the following case study and complete the tasks below.

You have been approached by Dominic and Tina to sell their property which is located in Dru. The couple have lived in the house for thirty years and now that their children have left home, they have decided to purchase a smaller house. They have put a deposit on a house in an outer eastern suburb and are looking for a fairly quick sale on the house. The house is located on a major arterial road on a block of land that is approximately XXXm2 . The house has three double bedrooms, central bathroom, separate lounge and kitchen/dining area and separate laundry. Features include ducted heating and evaporative cooling, an established rear garden with patio, off street parking via rear ROW. The house is in a liveable condition; however, it is showing signs of age. The house is in a central position, close to public transport, shops and schools.

a) What advice would you give Dominic and Tina in regards to their options for selling the property? You will need to recommend the best method of selling the property (auction or private sale). List the benefits of the method that you select.

After conducting an appraisal of the property, you estimate the selling price at $900,000 - $980,000. Dominic and Tina are happy with this and ask you to go ahead and list the house for sale. Additional details:

Address of property - 263 Bell Street, Drummoyne

Exclusive Authority Chattels included in the sale - All fixed floor coverings, drapes, blinds and fixed electric light fittings

Terms of sale - 10% deposit on signing and the balance in 60 days

Vendor's asking price - $980,000 Agent's estimated price range - $900,000 - $980,000

Agent's fees including GST - 3.3% of the selling price Marketing expenses including GST - Advertising $3,000

b) search an authority to sell (submit as part of your assessment for this task).

c) Describe the strategies that you will use to market the property.

d) At the auction, the property is knocked down to Andrea Atkins who made a successful bid of $960,000. Describe the process, including any legislative requirements, from acceptance of the final bid through to settlement.

e) Consider the following situations and issues and, referring to the relevant legislation, explain any legal and/or ethical requirements in relation to property sales.

i) In estimating the selling price you recommend a price range of $900,000-$980,000

ii) The local newspaper offers you a discount of 15% on advertising costs for this property as your agency is a regular and reliable customer.

iii) You are approached by a potential buyer who wants to buy the property, tear down the house, build two units and lease them. He offers $890,000 and tells you that if you can get the vendor to accept this price, he will use your agency to manage the properties. What are the possible consequences if you were to agree to the buyer's proposal?

iv) You are approached by a potential buyer who makes an offer of $900,000. You believe that the house will sell for more at auction so you do not pass on the offer to the vendors. At auction, the property is passed in as it does not make the reserved price.