Real Estate of New South Wales Australia

This case study discusses the best way to sell a property in New South Wales, Australia, which is through an auction. It explores the advantages of selling through an auction and provides strategies for marketing the property. It also discusses the legislative requirements for auction sales and the determination of property prices. The case study concludes with a discussion on the role of sales agreements and the concept of reserve price in auctions.

Running head: REAL ESTATE OF NEW SOUTH WALES AUSTRALIA
Real Estate of New South Wales Australia
Name of Student:
Name of the University:
Author Note

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REAL ESTATE OF NEW SOUTH WALES AUSTRALIA
Table of Contents
Answer to case study..................................................................................................................2
Part (a)....................................................................................................................................2
Part (b)....................................................................................................................................2
Part (c)....................................................................................................................................4
Part (d)....................................................................................................................................5
Part (e)....................................................................................................................................6
References..................................................................................................................................8

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Answer to case study
Part (a)
In order to sell the property of Dominic and Tina whose property is located in the
Dummoyne in the central location, close to public transport, shops and School1. The best way
is to sale the property through Auction. An auction sale is considered to be public sale in
which different proposing buyers’ provide quotation for the goods and try to compete their
rival on the Basis of the price of their Rivals.
There are several advantage of selling the home at the auction.
 This is a virtuous option to attain the real market value of a home as its marketing
price.
 An auction places a lowest limit on the value of the property which is known as the
reserve value but no upper boundary. This means that the property can be sold a
higher price.
 Property sale on the auction has the advantage that the buyer act on time because they
are enclosed under the rules and regulation of the Auction.
Part (b)
Complete Authority
Exclusive Auction Authority
1 Pennington-Cross, Anthony. "The value of foreclosed property." Journal of Real Estate
Research 28.2 (2006): 193-214.

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Vendor/s Dominic and Tina Azzopardi
Address 263 Bell Street, Drummoyne
Suburb Drummoyne
Postcode N/A
Telephone N/A
Appoint Real Estate Consultants offer for sale the property
Address 263 Bell Street, Drummoyne
Suburb Drummoyne
Postcode N/A (including Chattels)
By Auction Old house at 10.00 am / 6.00 pm
Vendor Asking Price $ 980000 or any other price the Vendor signs a Contract of
Sale to sell the property.
Agents Estimate of Selling Price $ 900000 or between $ 980000
(Note: This is the Agents opinion and is not a valuation - Section 47A Estate Agents Act
1980)
Preferred terms 10% deposit on signing and the balance in 60 days
Set Agreed Commission $ 3.3% of the selling price (including GST) TOTAL$ 31680($
960000* 3.3% including GST
Marketing Fees $ 3000 including GST
Plus any further amounts agreed to in writing by the Vendor. The Agent will not be entitled,
or is not likely to be entitled to any rebate.
The Vendor acknowledges that the level of service to be provided by the Agent is for the
Agent to market and endeavour to negotiate the sale of the property.
Exclusive Authority Period 60 days from the Auction date.
The Agent will not share in any commission with a person who is not a Licensed Estate
Agent or an Agents Representative.

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REAL ESTATE OF NEW SOUTH WALES AUSTRALIA
THIS IS AN EXCLUSIVE AUTHORITY
The Vendor is obliged to pay the Agents Commission on demand, upon a Contract of Sale for
the property above becoming an Unconditional Contract and the Agent is irrevocably
authorised to deduct from any deposits received, all commissions and marketing fees. The
Vendor agrees to pay the agreed Marketing Expenses incurred during the period of this
Agreement upon demand, whether or not a Sale takes place. I/We acknowledge that if the
account is overdue, changing places at its discretion, reserves the right to refer the account to
a Mercantile Agency for Collection and I/we agree to be responsible to meet all reasonable
costs and Commissions incurred in employing the said mercantile agent to collect the
overdue account. The Vendor acknowledges being informed by the Agent that the Agent’s
Fees and Marketing Fees are negotiable, prior to signing this Agreement. The Vendor
acknowledges receiving a copy of this Agreement when signing and before signing any
binding Contract for the sale of the property.
“Making of Complaints”
Any complaint relating to commission or outgoings can be made to the Director, Consumer
Affairs Victoria (CAV) GPO Box 123, Melbourne VIC 3001 or by telephoning 1300 737
030. Unless there are exceptional circumstances CAV cannot deal with any dispute
concerning commission or outgoings unless it is given notice of the dispute within 28 days of
the client receiving an account for, or notice that the Agent has taken the amount in dispute,
whichever is later.
Date of Authority Signed by Agent
Signed by Vendor/s
Part (c)
Strategies used to market the property
 Recognize the target market
 Accounting for the market expenditures2
 Advertising by means of website and social media
 Boost referrals and word-of-mouth
2 Lusht, K. M. (1994). Order and price in a sequential auction. The Journal of Real Estate
Finance and Economics, 8(3), 259-266.

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REAL ESTATE OF NEW SOUTH WALES AUSTRALIA
 Provide feedback quickly
 Broadcast a real estate news letter
 Plan for target achievement
Part (d)
Legislative requirement for Auction sale of the House.
The Bidder records must be English and must comprise:
 The date and residence of the auction.
 The address of the house that has been sale at the auction.
 The name of the owner of the house at the period of the auction.
 The name and the license number of the selling agent and the auctioneer.
 Each buyer’s name, address, the recognizing number of their proof of individuality
and the bidder number apportioned to the individual for the public sale.
 If an individual registering as a licensed agent acting on behalf of the buyer – they
need to provide their license number.
 If the bidder is quoting the rate in lieu of somebody, the party name, residence and the
recognizing quantity of their proof of identity.
 The maximum bid will be accepted3.
3 Chow, Y. L., Hafalir, I. E., & Yavas, A. (2015). Auction versus negotiated sale: evidence
from real estate sales. Real Estate Economics, 43(2), 432-470.

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REAL ESTATE OF NEW SOUTH WALES AUSTRALIA
Part (e)
Part 1.
There are two methods in determining the price of the property
 Market value of property
Determine the price of the property on the basis of the price of the similar property in
the same location in which the property is situated4.
 Registration value of property
Determine the property value based on the selling rate of government data about that
location.
Therefore the property rate of $ 900000 to $980000 has been determined based on the
above requirement.
Part 2
If the local customer offers 15% reduction in the advertisement cost on the ground
that the agency is regular and reliable customer, so the firm should accept the offers in order
to reduce its advertisement cost. This will reduce the firm expenses on advertisement in order
to target the right customer5.
4 Lusht, K. M. (1994). Order and price in a sequential auction. The Journal of Real Estate
Finance and Economics, 8(3), 259-266.
5 DeBoer, Larry, James Conrad, and Kevin T. McNamara. "Property tax auction sales." Land
Economics (1992): 72-82.

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Part 3
In order to accept the buyer proposal, there should be a sales agreement between the
seller and buyer agreement mentioning various terms and condition of the sale contract. This
contract for sale of the property must be agreed by both the party. The buyer of the property
must physically verify the place before making the deal. The role of the agency is to clarify
both the party on the terms and condition of the contract, since one of the party is giving
$960000 and another is providing $890000(with a terms and Condition) for the same
property, the responsibility of the buyer is offers best deal to the client that is offering a
higher sale value6.
Part 4
In an auction reserve price is the hidden minimum price that the sellers is willing to
accept for an item. In the system of reserve price auction the seller is only obliged to sell its
property if the bid amount quoted by various party either tally or exceed the values of the
reserve price. In the given case, at the auction the property do not have a reserve price,
because of which It does not get the right buyer, in the present cases the property does not
sale at the auction so then it became a real estate owned (REO) property. It will now belong
to the banks and other lenders and end up with them after foreclosure of deeds7.
6 Adams, Paul D., Brian D. Kluger, and Steve B. Wyatt. "Integrating auction and search
markets: the slow Dutch auction." The Journal of Real Estate Finance and Economics5.3
(1992): 239-253.
7 Adams, Paul D., Brian D. Kluger, and Steve B. Wyatt. "Integrating auction and search
markets: the slow Dutch auction." The Journal of Real Estate Finance and Economics5.3
(1992): 239-253.

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References
Pennington-Cross, Anthony. "The value of foreclosed property." Journal of Real Estate
Research 28.2 (2006): 193-214.
Lusht, K. M. (1994). Order and price in a sequential auction. The Journal of Real Estate
Finance and Economics, 8(3), 259-266.
Chow, Y. L., Hafalir, I. E., & Yavas, A. (2015). Auction versus negotiated sale: evidence
from real estate sales. Real Estate Economics, 43(2), 432-470.
DeBoer, Larry, James Conrad, and Kevin T. McNamara. "Property tax auction sales." Land
Economics (1992): 72-82.

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REAL ESTATE OF NEW SOUTH WALES AUSTRALIA
Seow, Ong, Lusht Kenneth, and Mak Chee. "Factors influencing auction outcomes: bidder
turnout, auction houses and market conditions." Journal of Real Estate Research 27.2 (2005):
177-192.
Eyre, Ethan B. "Computer web-based auction platform." U.S. Patent No. 7,475,036. 6 Jan.
2009.
Adams, Paul D., Brian D. Kluger, and Steve B. Wyatt. "Integrating auction and search
markets: the slow Dutch auction." The Journal of Real Estate Finance and Economics5.3
(1992): 239-253.