This article is not about how to prepare your home for an open inspection.
We all know about the recently cut lawn, the new paintwork in and out and the old trick of the smell of freshly baked bread throughout the house.
This article is about the risk of inviting complete strangers into your home and the consequences.
There is an ongoing and endless debate about whether a property is best shown to prospective buyers through open or private inspection. Some of the factors include market exposure, owners’ privacy and security. But if you do decide to allow open inspections you need to seriously consider some important issues.
At the top of them all is that for many sellers there is a question of security.
Allowing strangers into your home invites the risk of on-the-spot theft of valuables and for potential burglars “to case the joint” and come back days or weeks later when the time is right. They will have noted the floor plan, alarm system, the doors and windows that are easy to enter through and made a list all of your valuables. Most frightening of all is that they will also gather information about you and your family and your daily habits. They will know when you are generally not at home.
If the above scenario hasn’t already started to worry you as a home seller, then think about insurance and public liability.
The fact is that most homes are not insured for theft in the case of open inspections or in some cases for public liability. A thief could steal your Picasso right off the wall, your Rolex watch and several sets of your wife’s lingerie. And to cap it all, a prospective buyer could slip on your front steps and break his leg.
Ergo: the devil hides in the detail, so talk to your insurance company well before you agree with your selling agent to open your house to the public.
If your home is in the multimillion-dollar range and is being widely marketed in the media with an open invitation to the public to inspect it please read on.
What can you do to avoid these pitfalls? You can’t blame the selling agent. You agreed to open your house.
Take important steps to counter risk: - Talk to your home insurance agent and check whether you are covered for theft, damage or public liability during open inspections. If you aren’t, add the cover for the specific period.
- Remove your valuables from sight, lock them up or take them off the property. Don’t let people see or handle them. You are selling your home, not your personal items of value.
- If you have a large home with multiple levels and entries insist that your selling agent always has several members of staff at the open inspection. A single agent is simply incapable of watching every person who enters your property. The minute he or she turns their back someone can steal your valuables or damage your property.
- Engage a security guard who will be present inside your home to keep an eye on possible theft during the open inspection. If you are in the squillion-dollar price range engage a second guard to control who comes in and out.
Your final decision as a seller to show your home either by open or private inspection is essentially down to the question “Which method will ensure the highest sale price at the least risk?”---------------------------------------------------------------------------------------------------------------------------------------- Tim Mansfield is founder and principal of Sydney-based buyers' agency PrimePropertyBuyer.
PrimePropertyBuyer is currently seeking applications from experienced buyers’ agents (or real estate agents) on a commission-only basis to handle genuine enquiries from home buyers and property investors. Exclusive territories in Sydney include the Lower and Upper North Shore, Inner-West & West, City, Eastern Suburbs and Sydney South.
The buyers’ agent segment of the property industry is growing exponentially. In New South Wales alone business growth in this niche sector is booming as more and more people become aware of the benefits of engaging an independent agent to act for them (whether they are buying or selling). There are roughly 50 buyers’ agencies in the whole of NSW compared to several thousand real estate selling agents. The math is straightforward.
Our favourite saying is: "As the vendor will engage an agent to negotiate the highest possible price, why shouldn't the buyer engage one to negotiate the lowest?" and this makes a lot of sense.
But the business doesn’t end there. We also act independently as Vendor Advocates, we offer an Auction Bidding service, and act as Mortgagee Advocates for leading banks & lending institutions.
Sound like your dream job? Do you have the experience, reputation, local market knowledge and contacts to grow your own territory? Can you handle and close enquiries coming directly from our website which go straight to you?
If you tick all the above boxes please read on:
What we require:
- You have a full current NSW real estate agents license (please note a Sales Certificate only is not acceptable).
- You have a home office, a broadband internet connection and your own vehicle.
- You are happy to work for yourself six days a week and after hours if necessary.
- You are ambitious, have a strong ethic for hard work and a real desire to succeed in your new independent role.
- You have demonstrable experience as a real estate agent within your own area.
- You have a proven reputation for honesty and integrity within your own community.
What we offer:- The opportunity to earn uncapped commission on sales. It’s up to you, but with commission splits of up to 80% of fees you can earn well over $200,000 a year. Example: Just one purchase a month of a property at $500,000 would bring you in $8,000. And if a client purchases a $2 million dollar home your commission is $32,000 (in just one deal).
- One-on-one training in the specialist niche industry of buyers’ agency and the systems and best practices we use. If you are already an experienced selling agent this will be easy for you; you now act in the buyer’s interest and not in the seller’s. You don’t need to make any changes to your current license but you need to act only for buyers (you cannot do both at the same time under current NSW legislation).
- It’s a lot of fun and an exciting job! You will be advising buyers (or sellers) using your years of experience in real estate transactions. You act exclusively for your client and only for them. Your job is to get them the best possible price and protect their interests. It is a very satisfying and rewarding role and you do it in your own time and from your own home.
No-one said this is an easy business or a quick road to riches. You have to work very hard at it to be successful and there can be lots of ups and downs. But if you have the ambition and the experience you will succeed!
If you are interested in a role for any one of our exclusive territories as a Buyers’ Agent for PrimePropertyBuyer please send us an email message about yourself, your experience, your real estate agents license number and the area you are interested in to info@primepropertybuyer.com.au
Please don’t telephone us at this initial stage. Just write to us and we will get back to you as quickly as possible. We envisage the selection process will take until the end of April 2012, so please don’t be disappointed if we don’t reply immediately.
We look forward to hearing from you soon.
Should a seller be forced to disclose a property’s structural damage or planning issues? By Tim Mansfield
Monday, 12 March 2012
Caveat emptor, or let the buyer beware, is based on the 12th-century premise that a purchaser can view and handle goods offered for sale in marketplaces (such as meat or fresh bread) and make their own choice as to whether to buy them or not.
This principle still holds true today, whether in buying property or a tin of baked beans in your local supermarket. And the assumption remains that the consumer has an obligation to be satisfied about the quality of the purchase.
But buying a property is not the same thing as buying bread in a marketplace in the mediaeval era, or for that matter anything else you buy in your local supermarket today. Times have changed, and the onus of responsibility for a purchase has theoretically shifted from the buyer to the seller.
In real estate transactions nowadays a seller’s duty of disclosure is limited to disclosing latent defects in title, or issues directly related to the property. An example of latent defects or issues might be with neighbours.
Sellers are currently not obliged to disclose structural damage, planning issues or nonmaterial issues. They should declare events that occurred in or on the property (known as stigmatisation), such as a murder or suicide.
Either way, declaration or not can have an effect on the marketability of a property and can impact on the selling price.
Should legislation on this issue be brought up to date? What do you think? Tim Mansfield is founder and principal of Sydney-based buyers' agency Prime Property Buyer.
 The most important word in the dictionary for any successful real estate agent is not money. It is trust.
From the moment we are born we learn to trust those around us, just as we learn not to trust them. The concept of trust forms part our DNA wiring.
Trust can be defined as “confidence in the honesty or integrity of a person”, and the synonyms associated with the noun are confidence, dependence, belief and credence. Trust is about both character (which includes integrity) and competence (your strengths and your weaknesses).
There is a saying that “Nothing is as fast as the speed of trust”, and this can refer to every real estate agent’s most valuable asset: recommendation by word of mouth. The thing about trust is that if you lose it, it is gone forever. But if you have it, it spreads like wildfire from person to person.
The maxim “Know me, like me, trust me” is often used in real estate training to explain the process of gaining trust. It doesn’t happen the minute you first meet someone. To be recognised as “trustworthy” you have to earn it first by demonstrating your honesty and integrity, and only then will you gain a person’s confidence.
It’s no secret real estate sales agents are held in low regard in the public perception. In fact, in one recent poll they ranked at the bottom after doctors, firefighters and prostitutes. The main reason appears to stem from the initial meeting with a property seller when the agent gives an estimate of market value, but there are also accusations of agents being inexperienced, unqualified or downright dishonest.
From the very beginning of the seller/agent relationship there is an element of mistrust, often compounded by an over-inflated “valuation” of a property. This is the greatest dilemma faced by real estate agents every working day. If they under-appraise they may lose the listing, and if they over-appraise they may lose trust and their own reputation. Over-appraising is often referred to as “buying a listing”.
The crux of the issue appears to lie somewhere between an understanding of the industry code of ethics and good real estate training, and generation Y real estate agents may get caught up in material values rather than traditional fundamental ones.
In an article entitled “Can you trust a real estate agent”, Kevin Turner of Radio 4BC’s Real Estate Talk predicted that 60% of the people in real estate at the start of 2009 would be gone by the beginning of 2010.
In the current climate of uncertainty in the real estate industry, Turner’s predictions may also come true in 2012. Aspiring young agents are leaving the industry in droves, while principals of real estate agencies are going back to listing themselves to cut down on overheads.
At the end of the day a real estate agents reputation is everything, and his or her success or failure depends on it.
Tim Mansfield is founder and principal of Sydney-based buyers' agency Prime Property Buyer.
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