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Professional Practice Learner Guide Summary

Key Functions of Agencies

  • Real estate includes land, affixed buildings/improvements, and growing items.

  • Agent: Authorized to act on behalf of a principal.

  • Principal: Gives written authority to the agent, often the seller or landlord.

  • A real estate salesperson works under a licensed agent with a registration certificate.

Fiduciary Relationship

  • Agents have a legally binding fiduciary relationship with their client, based on trust and good faith.

  • Agent duties include:

    • Following client instructions (unless unlawful/unreasonable).

    • Acting in good faith.

    • Keeping books of account, especially a trust account.

    • Keeping the client informed.

  • Legal duties include: Loyalty, confidentiality, full disclosure, obedience, investigation with skill, care, and due diligence, and proper accounting.

  • Agent's Duties:

    • Contractual duties agreed upon in the contract.

    • Fiduciary obligations implied by common and equity law.

Roles and Responsibilities

  • Licensee in Charge: Manages the real estate business day-to-day and is responsible for the entire operation, including salespeople.

  • Real Estate Agent: Licensed to perform activities for others for reward, like selling, leasing, or property management.

  • Buyers Agent: Works only for the buyer and must hold a real estate license.

  • Auctioneer: Requires real estate license and accreditation to sell property at auction.

  • Assistant Agent: Employed by a licensed agent, conducts real estate functions after meeting qualifications.

  • Property Sales: Listing, marketing, and selling properties.

  • Property Manager: Manages properties effectively, finds tenants, collects rent, arranges repairs.

  • Corporate Support: Provides administrative, accounting, and HR support.

Definition of Property

  • Land is real property.

  • Personal possessions are personal property (chattels).

  • Fixtures become part of the property.

  • Chattels are not included unless agreed upon.

  • Real estate is heavily regulated by State/Territory and Commonwealth legislation.

  • Residential Property: Used/intended for residence.

    • Caution areas: Home offices, land with primary production, mixed-use properties, bulk projects, boarding houses.

    • Not considered residential if used substantially for industry, commerce, or primary production.

  • Commercial Property: For retail, offices, hotels, service establishments.

  • Industrial Property: For manufacturing, processing, or warehousing.

  • Rural Property: Used for grazing or cultivating crops commercially.

  • Business Broking: Selling/leasing businesses as going concerns.

  • Vacant Land: Land with no structural improvements (except fencing).

  • Off the Plan: Selling property in a plan of subdivision or a property that has not been built. Seller-buyer contracts must contain conditions such as agreed timeframes, standards, variations/terminations.

Organisational Structure

  • Common structures: Sole Trader, Partnership, Company.

  • Sole Trader: Simple structure, individual carries on business, proprietor is personally liable for debts.

  • Partnership: Association of two or more persons carrying on a business for profit, partners are jointly liable.

  • Company: Separate legal entity, shareholders own the company, directors manage, limited liability (unless directors give personal guarantees).

Agency Structure

  • Independent Agent: Operates independently without formal ties.

  • Franchise Groups: Franchisees operate under franchisor's name in exchange for a share of income.

  • Marketing Groups: Non-profit group of independent agencies benefiting from common branding/marketing.

Regulation of the Industry

  • Regulation protects the public by ensuring standards of practice, conduct, and competency.

  • Trust money must be correctly accounted for.

  • Agents must comply with complex legislation.
    Regulatory Bodies

  • NSW Fair Trading: Manages the legislation and consumer laws.
    Industry associations

  • Real Estate Employers’ Federation (REEF)

  • Real Estate Institute of NSW (REINSW)

  • Real Estate Buyers Agents Association of Australia (REBAA)

  • Australian Institute of Business Brokers for business agents and brokers (AIBB)

Licensing and Eligibility Requirements

  • Assistant Agent: Requires completion of 5 core units from CPP41419 Certificate IV in Real Estate Practice

  • Class 2 Real Estate Agent - CPP41419 Certificate IV in Real Estate Practice, must include Group A & B plus 3 electives, 12 months experience & complete tasks

  • Class 1 Licensee in Charge Requires: CPP5119 Diploma of Property (Agency Management), 2 yrs licensed agent experience and task completion

  • NSW Fair Trading considers each application and includes fit and proper person & disqualified person checks.

  • Disqualified person: Includes convictions for dishonesty, license lending, undischarged bankrupts, mentally incapacitated persons, etc.

  • Disciplinary Actions: Cautions, reprimands, directives, undertakings, monetary penalties, license conditions/suspension/cancellation, disqualification.

Industry Employment Requirements

  • Employers and employees have responsibilities; employment conditions are set by agreements.

  • Employer Responsibilities: Duties under the Act and contractual obligations.

  • Employee Responsibilities: Honesty, punctuality, obeying instructions, confidentiality, safety.

  • Employment Agreements: Written agreements with terms and conditions; remuneration regulated under state award.

Continuing Professional Development

  • Essential for maintaining a competitive edge; focuses on ethical behavior, legal compliance, and professional standards.

  • CPD objectives: Compliance, enhance consumer confidence, maintain professionalism.

Ethical Practice

  • Ethical standards and consumer protection principles guide real estate operations.

  • Ethics are the principles that guide behavior toward building character (trustworthiness, respect, responsibility, fairness, care, citizenship).

Conduct

  • Agent responsibilities: Follow instructions, act in good faith, keep accounts, inform the principal.

  • Fiduciary relationship: Based on confidence and trust; must not be breached.

  • Rules of Conduct: Increase accountability with maximum penalties.

Own Role

  • Agents must: Act under delegated authority, place client interests first, exercise care/diligence, protect assets/money, maintain confidentiality.

  • Conflicts of interest must be avoided, and fair/ethical dealings ensured.

Legislation and the Real Estate Industry

  • Property and Stock Agents Act 2002 & Regulations 2014 govern real estate operations.

  • Areas covered:

    • Listing property.

    • Agency agreements.

    • Auction procedures.

    • Marketing and leasing.

    • Supervision of contracts.

    • Business practices.

    • Conflicts of interest.

    • Finances and trust accounts.

  • Negligence: Breach of duty of care causing damages.

  • Misrepresentation: Providing incorrect information.

  • Conflict of Interest: Agent’s interests conflicting with client’s.

  • Supervision Requirements: Licensee must supervise all employees with certificate/license.

  • Duty of Disclosure/Conflict of Interest:

    • Section 47: Disclose referral relationships and benefits.

    • Section 49: Prohibits agents from obtaining beneficial interest in the sale.

    • Section 52: Disclose any material fact to potential buyers and tenants. Includes property history (flooding, fire, crime), and combustible cladding.

    • Material fact: "A fact that would be important to a reasonable person in deciding whether or not to proceed with a particular transaction."

    • Statement about price: An agent is underquoting the selling price of a property if they make or publish a statement about its price that is less than their reasonable selling price.

Agency Agreements

  • Must be in writing; no agreement = no commission.

  • Required Documents

    • Provide the proposed contract for the sale of the property (excluding particulars of the purchaser and purchase price)

Personal Decision Making

  • Work within practices, policies, and procedures consulting a specialist areas outside of your knowledge or experience, rather than giving false or misleading responses.

Communication Strategies

  • Effective communication is vital for success.

    • Communicate with clients often during sales/leasing.

    • Requires interpersonal skills, verbal/non-verbal awareness, and written skills.

  • Barriers to effective communication include the use of jargon, emotional barriers, lack of attention, physical disabilities, etc.

Customer Complaints

  • Every employee must be able to deal effectively with customer and their complaint as they are inevitable.

  • Handling the complaint include Be magnanimous, Apologise, Remain positive and polite, Listen to the customer, Offer solutions and options and Document and record details
    Document complaints

  • Need to be documented so there is no substance to a complaint without evidence.

Marketing and Communication

  • Marking promotes/sells products/services via advertising while Communication Reveals/exchanges information and creates connection
    Community expectations

  • Want their agent to be a trusted advisor with proven track record and knowledge of legislation and the locality.
    Community engagement

*Belonging to a community is more than a luxury – it is a fundamental need.

*Role of agents

*The ability to build trust and credibility is crucial to maintaining relationships.
Building rapport wwith clients generally means directly meeting with the client.
Understanding Marketing and Communication
Brand

*The brand is any service, product or concept which is publicly different from that of other services, products and concepts so that it can be communicated as well as marketed easily.
Methods of Marketing and Communication

  • The marketing mix involves 4 P's: Product, Price, Placement, Promotion.
    Communication basics

*the 4 C's focuses on a seller-oriented marketing strategy: Customer Wants and Needs, Cost, Convenience, Communication
Customer Service charters: Document commitment to be a customer focused organisation

Standards: Outlines the level of service a costumer can expect

Vision – Customer Service

*It is essential to understand their needs and to measure their satisfaction levels.

Competitors

*You need to be constantly on the lookout for possible new competition. Understand your competitors, Speak to your competitor, speak to to your competitors
Key target groups
An agent understand the profiles and needs of the different target target market market groups Demographics, geographic segmentation , Psychographic segmentation
Representaions in Marketing and Communications
*Must be true and not amount to express or implied representations that are false Section: 52 Misrepresentation by licensee or registered person -A Material Fact – is a fact that would be important to a reasonable person in deciding whether or not to proceed with a particular transaction.”

Personal Marketing

  • A plan to get and grow your name in the market with a focus on philosophy, values, customers, competition, all happening in the industry.
    Establish credibility in your brand

  • The most important quality needed to establish credibility in your personal brand is consistency.
    Attract and retain clients and customers
    *Building a relationship with customers can lead to improved behavioural loyalty and thus lead to increased profits.
    The value of loyal customers

*More willing to pay, saving marketing, are more forgiving, customer endorsements
Resolve outstanding matters Sometimes, relationships between the agency and the client can become strained.
Feedback

*Giving and receiving feedback is central to social interaction. People regularly give and receive feedback, and to assist the development of a long-term relationship with a client, we should know when to offer positive feedback as the opportunities arise.

Receiving Feedback

  • All feedback received, both positive and negative, should be noted and acted upon.
    Property Marketing

Planning for sale or leave, presentation is important when marketing a property and the agent may be asked for recommendations for improvements which will enhance the property's sale potential.
Understanding your target market is important when deciding how to promote Your house, your chance! The basics of marketing a property.
COMMUNITY ENGAGEMENT
FEATURE YOUR CUSTOMERS OR CLIENTS
ENGAGES IN LOCAL EVENTS