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Vendor Management

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Market News, Paula Irvine, Kaplan Professional

Risk Management: Practical tips for salespeople

Risk management may seem like a horrible topic for an article but unless you manage associated risks, how can you ever achieve success? Follow the checklist below so you can be confident of satisfying the client and achieving sales time and time again.

1. Keep your knowledge current - by reading relevant journals and publications such as Hot Topics. Check newspapers and television reports regularly and note issues or developments likely to impact on your marketplace. Join your professional association such as REINSW to receive up-to-date information and advice.

2. Network - with fellow professionals such as valuers, accountants, property researchers, solicitors and so on. Discuss the market so you stay abreast of the latest trends.

3. Constantly update your market knowledge - by physically inspecting properties and conduct thorough research before giving any advice or price estimates. Use data companies such as RP Data, subscribe to their updates. Check your market regularly.

4. Continue to learn and grow - by undertaking regular training and professional development. Knowledge is power and a great form of protection. Ignorance is no excuse!

5. Communicate - stay in touch with your vendors, customers and any prospects. Discuss market trends, developments or any areas of concern. Explain the process with all parties so they understand what they are involved in, beforehand.

6. Use systems that make your job easier - and quicker but DO NOT compromise on quality of service delivery. Follow them consistently and update as and when required.

7. Vendor (client) always comes first - your duty is to provide them with the best possible return from the sale of their asset under prevailing market conditions. Always put their interests FIRST. Remember your duty at law is to all parties involved in the transaction. Protect the security of the vendor’s asset at all times.

8. Ensure your instructions are understood - by both you and the client. Confirm everything in writing signed by the client. Check wherever possible the accuracy of all information received from the client. Inspect the property carefully and note any defects or disadvantages that are evident. Identify all relevant legislation and regulations that affect the transaction. Do not assume anything; pursue any doubt to your satisfaction. Record every detail carefully and re-check for accuracy.

9. Client approval on advertising and promotions - is absolutely critical. Always obtain the client’s consent and signature on the original advertising, marketing schedules and any required additions or alterations. (This includes getting them to sign on proof copy and draft adverts.) Stick to the set budget and ensure it matches any reimbursement stated in the schedule and on the agency agreement. Don’t make unsubstantiated claims about the property and use a disclaimer on every page of any promotional material.

10. Representations - think before you speak and record everything. Stick to your instructions. Note any queries and NEVER guess the answer to any question. Diarise all dates and times and record all relevant points discussed with any party involved in a transaction. Undertake thorough research before making any predictions or price estimates. Have a reasonable basis for any representation that you make. This is a legal requirement! Think, be careful and record everything relevant.

11. Documentation - use standard forms and letters for consistency. Take great care when completing agency agreements or any contracts. Accuracy is vital. Identify parties, describe both them and property accurately, date correctly and check/ confirm deposit/settlement details. Fully understand and follow legislative requirements for agency agreements, consumer guides, cooling off periods, etc.

12. Contracts for sale - have in place as required prior to promoting residential property. Check any special conditions. Make sure you understand them - obtain legal advice if required. If participating in or undertaking exchange of contracts remember there is one contract consisting of two copies (one for the seller and one for the buyer) and they must be thoroughly checked to ensure that they are identical.

13. Check and re-check your reports or presentations for accuracy - and use checklists. Have someone else check and countersign as a precaution. Use appropriate disclaimers but do not rely solely on them.

14. Auctions - check all documents thoroughly. Clarify all procedures to be followed and stick to them. Don’t bait prospective bidders with a low price estimate – it is illegal. Have the client sign any change or setting aside of the reserve price. Before suggesting any method of sale, ensure that it’s in your client’s best interest. Always exercise sound judgement in your recommendations.

15. Make sure you collect deposits - remember contracts for the sale of land must be evidenced in writing and no amount of money will guarantee a purchase prior to exchange of contracts. If there is a problem in collecting a balance of deposit after exchange, it’s important to notify the vendor and liaise with their legal representatives, as this should be addressed under the conditions of the contract.

16. Records - keep copies of all relevant documentation. Use a diary as a record of events to act as a memory jogger if required (manual or computerised). Keep general records of all transactions. Maintain a neat and orderly filing system. Use a checklist for every listing and sales file. Use a complaints register and client/customer satisfaction surveys to refine and improve your service.

Remember adherence to a risk management system will go a long way to protect you and your business. However, the greatest form of risk management is always keeping your clients and customers satisfied. After all, happy people don’t sue!

Paula is a highly respected real estate agent with over 25 years of experience across the real estate industry and in property education and training.

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Market News, Paula Irvine, Kaplan Professional