Learning objectives

In this written assessment you will:

• Explain the inspection and appraisal process and appraisal methods and apply these to different properties in accordance with industry requirements.
• Explain common methods of sale for real estate.
• Complete an agency agreement.
• Develop a marketing plan, budget and promotional material to market a property and explain how to qualify potential customers and present a property to them.

PART 1 – APPRAISALS

Task 1 – Appraisal of 22 long drive

Scenario

Aria and Wiremu Ngata have contacted you as a result of a recent personal promotion campaign. They have asked you to appraise their property at 22 Long Drive.

You have met with them and inspected the property, taking photographs and notes. During your meeting, Wiremu has told you that he’s been offered a scholarship to a major university in the United States, and if he accepts it, they would be away for at least two years.

On your return to the office, you obtained a certificate of title. You have also collected data about recent sales in the area, and properties that are currently on the market that would be competition for 22 Long Drive. The photos, property details and value analyses are below

Instructions

Complete these tasks on the MS Word template for Part 1 (under Assignment 2 in the zip file in the Assessment area).

Use each of the following three methods to prepare an appraisal for Aria and
Wiremu.

(a) Competitive market analysis (CMA), including a minimum of three recent comparable sales, and three comparable properties that are currently on the market.

(b) Net rate analysis, including a minimum of three comparable properties.

(c) Replacement cost analysis.

22 Long Drive

Land: Freehold 605m2 section, flat contour, basic landscaping, fenced on three sides

House: Brick and monolithic cladding exterior, pressed steel tile roof, 246m2, built-in 2016, in excellent condition

Features:

• 4 double bedrooms
• office/study
• open plan kitchen/family/dining
• separate lounge
• family bathroom with shower, bath and hand-basin
• separate toilet
• master bedroom has en suite bathroom and walk-in wardrobe
• double internal entry garage with laundry
• Rateable value: $785,000 (last year)

Your research suggests that the replacement cost for a property of this type would be approximately $1,900/m2. Your branch manager suggests allowing 1.25% depreciation per year, and applying the following values.

Land: $350,000
Chattels: $70,000
Other improvements: $50,000

Recent sales in the area

RES422 Real estate sales and marketing / A2 The following eight properties have sold in the same area in the past three months.

PART 2 – AGENCY AGREEMENTS

Task 3 – Agency agreement for 93c Main Street

Draft an agency agreement for your clients, Dan and Mary Symonds, at 93c Main St, Waterford. To help, you will find a copy of the Certificate of Title (in the zip file in the Assessments area), the notes you took during the appraisal meeting, and at a further meeting two days later.

Task 4 – Agency agreement for 27a Harper Street

Aria and Wiremu Ngata are very pleased with your appraisal of their property and say that they are planning to list it for sale with you within about a month. Aria mentions that her mother, Mere, is thinking of selling her investment property. It’s a home unit on a unit title

Task 5 – Marketing approaches

Aria says ‘We’ve seen TV coverage of different marketing approaches, such as auctions and tenders, but this is going to be the first home we’ve ever sold, and we’re really quite confused.’

‘Can you please explain to us what the basic issues are so that we can make a more informed decision?’

Wiremu adds, ‘We were talking to some friends the other day, and they’d been to an auction. They didn’t know that they couldn’t bid because they were conditional buyers. Apparently, it got very embarrassing.

Task 6 – Marketing plan

RES422 Real estate sales and marketing / A2

A couple of days after receiving your handout about the marketing approaches, Wiremu phones you saying he has decided to accept the scholarship to the American university. He and Aria have decided to market their property for sale by a sole agency, with a price of $870,000.They are prepared to spend up to $3,000 on a marketing campaign

Task 7 – Advertising

RES422 Real estate sales and marketing / A2

Complete these tasks on the MS Word template for Part 3, which you can find in the zip file in the Assessment area.

(a) Prepare the text of a print advertisement for 22 Long Drive. Your advertisement should be approximately 50 – 75 words, to be used in a local newspaper. You do not need to do any graphic design work, but your advertisement must include all the elements that will appear in the newspaper, including compliance with the relevant section of the Real Estate Agents Act 2008.

(b) Briefly describe two images you would use in the advertisement to supplement your writing. These images should illustrate key points that will attract potential customers. (You do not need to include photographs or other illustrations.)

Task 8 – Qualifying customers

You are marketing 22 Long Drive. A potential customer phones with an enquiry about that property.

Which of the following questions or statements would be suitable to help you qualify the customer’s suitability for this property? Select all answers that apply.

Write the letter/s in the MS Word template for Part 3, which you can find under Assignment 2 in the zip file in the Assessment area of the course. For each answer, you select, write a brief explanation of why the question or statement is useful for qualifying customers. Write up to 50 words per answer.

(a) I can take you and show you the property today.

(b) Can you describe the type of property you’re looking for?

(c) This property is for sale at considerably more than its rateable value.

(d) Is it important to live close to local schools?

(e) The first open home is on. Why don’t you come along?

(f) Do you want to see some three-bedroom homes for sale as well?

(g) Do you have a timeframe in mind for moving to your new home?

(h) What budget range are you looking to buy in?

(i) It’s got four great double bedrooms. Are you keen on an ensuite bathroom?

(j) The vendors will probably be pretty negotiable on price.

Task 9 – Presenting properties

Your friends Marcus and Melody are looking for their first home. They tell you about an experience they have recently had with a salesperson, Steve. Melody says, ‘He was nearly 15 minutes late for the appointment, and didn’t call us or anything. We were just about to go home when he finally arrived. As he took us through the house, he said things like, ‘This is the bathroom.’ Do you do things like that?’

Marcus laughs, and adds, ‘Yes, and remember how he told us how we’d be able to fit two cars in the garage? He must be thinking about awfully small cars.’

‘Yes, and I went to look in the hall cupboard, but he stuck his hand over it and told me I shouldn’t look in there,’ Melody adds.

‘Okay, it did get better. Once he’d shown us through the house – pretty quickly, I might add – he told us to go and look around the garden. He said we could have another look through the house as well, but he was going to be in his car making some phone calls. That was actually a good thing because he’d talked endlessly the whole time. ’