CPPDSM4017A Negotiate Effectively in Property Transactions

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Unit name: Negotiate Effectively in Property Transactions

Unit Code: CPPDSM4017A

Unit purpose

This unit describes the performance outcomes, skills and knowledge required to manage effective negotiations in relation to the sale, lease or management of property.

It includes establishing the needs and expectations of relevant parties, negotiating to achieve desired outcomes and managing potential and real disputes between parties.

The unit may form part of the licensing requirements for persons engaged in real estate activities in those States and Territories where these are regulated activities.

Pre-requisite/Co-requisite units

Nil / Nil

Elements and performance criteria

Element Performance criteria
1.     Establish needs and expectations of relevant parties.
  • Clear and open discussions are held with relevant parties to clarify issues and identify desired outcomes in line with agency practice and legislative requirements.
  • Consequences of not reaching agreement are identified and other alternatives are determined.
2.     Negotiate with parties involved in property transactions to reach a desired outcome.
  • Relevant information is collected, analyzed and organized to inform the negotiation.
  • Negotiation approach is established in line with agency practice and legislative requirements.
  • Negotiation is conducted in a professional manner, showing respect for all parties in line with agency practice, ethical standards and legislative requirements.
  • Effective negotiation techniques are used to persuade and reach agreement between parties to the transaction.
  • Possible solutions are discussed and their viability assessed.
  • Effective techniques are used for dealing with conflict and breaking deadlocks where required.
  • Final position is confirmed, ensuring agreement and understanding between all parties.
  • As necessary, follow-up communication or reports are provided to all parties to confirm adjustments required to conditions of agreement.
3.     Manage  potential and real disputes with parties to property transactions

3.1 Areas of dispute are analyzed and evaluated according to agency procedures and market expectations to enable resolution of dispute.

3.2 Further negotiation and clarification of lease or sale is carried out until agreement is reached to the satisfaction of all parties.

Assessment Overview

Unit outcome

This unit is ungraded. Your result will be recorded as AC (achieved competence) or NC (Not competent). To achieve AC, you must successfully complete all tasks within the portfolio.

General information

  • If you do not successfully complete an assessment event you may be given the opportunity to undertake another assessment. This must be negotiated with your teacher. Should you be unsuccessful in the 2nd attempt, you may need to re-enrol in the unit the following semester.
  • You will receive feedback on each assessment provided it is submitted on or before the agreed due date. Assessments completed after the agreed due date will need to be submitted directly to the Head teacher. In such cases, you will need to show the cause of why you are making a late submission. If the employability skills associated with the unit include punctuality, the late submission may not be accepted. As soon as you become aware of circumstance that may prevent submission on time, notify your teacher to request an extension in time.
  • If you want to view your results at any time, your teacher can provide you with instructions on how to access your student record via student e-Services
  • All TAFE students are eligible to apply for Recognition of Prior Learning (RPL). For more information, go to http://Tafenow.com.au/studentinfo/rpl
  • If you have a permanent or temporary condition that may prevent you successfully completing the assessment task(s) you should immediately talk with your teacher about ‘reasonable adjustment’.

This is the adjustment of the way you are assessed to take into account your condition and may include providing a support person or extra time. The assessment criteria cannot be altered.

  • If you do not agree with the result given for your assessment task, you may appeal the assessment decision. You should first discuss the assessment result with your teacher. If you are not satisfied with the outcome of that discussion you can access the appeal process through the staff in the campus administration office.
  • For more information on assessment, refer to ‘Every Student’s Guide to Assessment in TAFE NSW’ which is available on the TAFE internet site at: https://www.tafensw.edu.au/courses/assessment/assets/pdf/assessment_guide.pdf

Assessment Range and Conditions

Range Conditions
Submission date TAFE now students have rolling enrolments. You should discuss a timeline with your facilitator for completion of this unit.
A student is required to provide materials and equipment
  • PC
  • Internet access
Teacher is required to provide material and equipment Nil
Additional resources Nil
Teacher support and supervision There is no supervision for this assessment task. If you are unclear about any aspect of the assessment events please contact your teacher for guidance.
Student collaboration Student collaboration is not permitted.
Submission Instructions Students should upload their submissions on the link provided in the Online Learning Management System.
Assessment Attempts Two attempts.

Assessment plan

To demonstrate competence in unit CPPDSM4017A Negotiate effectively in property transactions, you will need to complete each of the following assessment tasks successfully:

  • Assessment Event 1-Assignment
  • Assessment Event 2 – Scenarios

Assessment Events

Assessment event 1 – Assignment

Scenario

Your agency has an exclusive listing for 22 Smith Street Kingscliff 2487; it was originally listed at $855,000. After 3 inspections and no sale, you have a meeting with the client vendor who reluctantly agrees to the price being reduced to $825,000.

During this meeting the vendor informs you that the property had previously been listed with another agent. A potential sale had fallen through due to the prospective buyer’s building report finding faults with the property. The purchaser walked away from the sale.

Three weeks pass by and four other inspections occur and one party decides that they are interested. They pay an expression of interest deposit of $78,500 and submit an offer of $785,000, subject to a building and pest report.

They have cash and are ready to proceed and want occupation within six weeks. You are excited that you have an offer, so is your boss.

The following information comes to the fore after you submit the offer:

  1. The vendor had not informed you that there was water damage in the en-suite shower recess resulting in some decay to the floor timbers
  1. The guest room at the far end of the house was constructed on a slab lower than the timber floor of the rest of the house and was less than 300mm and therefore could not be inspected.
  1. The vendor, who had built the house, 10 years earlier, had recently installed more vents in the sub floor to improve ventilation under the house.
  1. The vendor is not willing to reduce the price any further but has shown interest on a smaller property that your agency has listed.
  1. The purchaser states that the building report indicates that the repair work will cost approximately $30,000

Task

Prepare a report (approximately 750 words) detailing to your Licensee how you will handle this negotiation keeping in mind the following:

  • Legislation and regulations
  • How you establish the needs and expectations of relevant parties
  • Negotiate this sale to reach a mutually acceptable agreement for the negotiating parties
  • Demonstrate knowledge of negotiation of conflict resolution techniques relevant to dealing with parties in the sale of property
  • Manage the dispute to reach a desired outcome
  • Evaluate the resolution process
  • Accurately record and report facts and outcomes
Marking Criteria
Demonstrated knowledge of negotiation and conflict resolution techniques relevant to dealing with parties inproperty transactions.
Identify and establish needs and expectations of relevant parties
Identify effective resolution skills to reach a mutually acceptable agreement for the negotiating parties,
Evaluate the resolution process and accurately record and report facts and outcomes

Report length approximately 750 words

Assessment Event 2 – Property Management Scenarios

You are required to present a short report (approx. 250 words) on each of the four scenarios below. The report for each scenario should include the following:

  • Communication techniques to accurately identify causes and incidences of the conflict
  • Negotiation with the tenants / Landlords
  • Establish needs and expectations of relevant parties
  • Negotiate an effective resolution to reach a mutually acceptable agreement for both parties
  • Risk and risk management strategies to manage the dispute to reach a desired outcome
  • Provide Follow-up communication to confirm adjustments required to the agreement.
  • Evaluate the resolution process and how you would accurately record and report facts and outcomes.
  • Identify and document the action/s which should be taken to ensure a situation like this does not arise again with another tenant.
Scenario 1

You have a quality tenant in a 4 bedroom home and your client landlord investor wants you to increase the   rent from $275 per week to $310 per week, this is due to interest rates rising and his costs increasing.

The lease will expire in 30 days & the tenant wishes to remain at the property but does not want to pay anymore rent   and the landlord needs to maintain cash flow. At the present time you have 4 houses vacant.

 

Scenario 2

Tenants have given notice that they will not extend their lease due to dissatisfaction with the property. This is an old house which is in a state of disrepair.

The landlord has been most unco-operative. After the final inspection of a property the landlord asks to look through the property before the next tenant arrives.

He rings the Property Manager furious that she has not picked up some problems caused by the last tenant and states that he wants compensation. He mentions the following issues in the table below:
Your landlord mentions the following Your research reveals
1

Terrazzo step- This is the step at the front door of the premises. The landlord claims the step is stained and discolored

The tenants deny any knowledge of this problem. You notice there is no reference to this in the ingoing condition report in the ‘Entrance’ part of the report or the ‘Other’ part.
2 Paint spots on the garage floor – The landlord complained that the tenant appeared to have removed paint from the garage floor with turpentine. This has left a smudgy film on the floor and discoloring.

You cannot see evidence of this from the pictures the Property Officer took at the last inspection.
3 Sections of garage ceiling Masonite missing – The landlord complained this needs to be replaced.

The tenants claim the garage was leaking and that the Masonite was removed as it was badly water damaged and damp, rotting and mouldy.

The tenants claimed that it was removed during clean up and the landlord was in agreement. The landlord denies that there was water leaking or that she was aware or that the tenants informed her of such.

Your research shows evidence of leaking water appears in the ingoing condition report.

There was also correspondence from the tenants seeking repair of this problem.
4 Broken window lock – The landlord alleges this has been intentionally damaged.

The tenants deny this claim stating fair wear and tear. Your inspection shows a very old, rusty lock with no evidence of negligent action.

 

Scenario 3

Jhia Lee has been renting a unit for the past nine months. She has always paid her rent on time and at the rental inspection times, the unit has been immaculate. Last month, Jhia could only pay half of the required month.

Her brother, who attends university full time became very sick and needed very expensive medicine and nursing care every day for a week.

She still owes $500 for the month. She thought she would work a few extra shifts at the newsagency to make some extra money to pay for rent.

Yesterday she was surprised to receive an Eviction Notice from the Property Manager stating that she has 14 days to vacate the unit because her rent is 14 days in arrears.

Jhia can’t believe she is being evicted. She is very upset and rings the Senior Property Manager seeking an appointment to try to resolve this problem.

 

Scenario 4

This afternoon one of your tenants, Barbara Karet came into the office to report some damage to the house at Headland Road, Collaroy.

The Property Manager was out at an appointment so she left a message with the Receptionist. During a party held at the house last Friday night, a fight broke out and a brick was thrown through a large window and some damage was done to the garden.

Friends have told Barbara that the landlord’s insurance would cover this, so she is not responsible for fixing or paying for the damage.

She would like the Property Manager to organise for the damage to be repaired as quickly as possible and charged to the landlord. The Receptionist has said she will pass the message to the Property Manager and she will call her back before the end of the business day.

Marking criteria

You must meet the following criteria in order to complete this assessment task successfully.

Marking Criteria
Demonstrated knowledge of agency practices, ethical standards and legislative requirements associated in managing and resolving conflict and disputes
Demonstrated knowledge of negotiation and conflict resolution techniques relevant to dealing with parties in property transactions.
Evaluate the resolution process and how you would accurately record and report facts and outcomes

Identify and document the actions that should be taken to ensure a situation like this does not arise again with another tenant