What you can and can’t ask

Whitsunday Times - - REAL ESTATE - By REIQ

WHEN it comes to buy­ing or sell­ing your home, peo­ple are of­ten un­sure what ques­tions they can and can’t ask their real estate agent.

Af­ter all, the real estate agent is of­ten the most knowl­edge­able per­son in the room when the sub­ject of real estate comes up.

So it’s easy to as­sume that you can ask them pretty much any­thing and treat that an­swer as gospel. But in some in­stances that’s not the case. If you’re sell­ing your home for the first time and look­ing for a real estate agent, there are a few ques­tions you can and should ask:

What ex­pe­ri­ence do you have sell­ing homes in this area at this price point?

How have you main­tained your pro­fes­sional knowl­edge?

Are you with the REIQ? (This is gives you con­fi­dence they’ve kept their skills up­dated through on­go­ing pro­fes­sional de­vel­op­ment)

What sales data can you present to show­case your sales skills? For ex­am­ple, av­er­age days on mar­ket data re­veals how quickly an agent can sell a house com­pared with the mar­ket av­er­age.

Do you have tes­ti­mo­ni­als and/or re­fer­rals from pre­vi­ous clients that you could share?

There’s a grow­ing trend for Aus­tralians to set up Self-Man­aged Su­per­an­nu­a­tion Funds (SMSF) and to use the SMSF to in­vest in prop­erty. If you’re think­ing about pur­chas­ing an in­vest­ment prop­erty you might be tempted to ask the real estate agent who is show­ing you the prop­erty some fi­nance ques­tions.

An Aus­tralian fi­nan­cial ser­vices (AFS) li­cence is re­quired when mak­ing rec­om­men­da­tions or state­ments of opin­ion to a per­son to use an SMSF to in­vest in prop­erty.

What you can ask is what the rental prop­erty has been rented for or data on past cap­i­tal growth of the prop­erty, but you can’t ask ques­tions about struc­tur­ing the fi­nance for the deal.

Real estate agents are lim­ited to of­fer­ing ad­vice about real estate and that ad­vice can’t ex­tend to things like re­turn on in­vest­ment, pos­i­tive or neg­a­tive gear­ing, po­ten­tial yield, or how quickly your mort­gage could be paid off.

All of this ad­vice is bet­ter com­ing from a fi­nan­cial ad­vi­sor or an ac­coun­tant.

Other ad­vice that is tempt­ing to seek from a real estate agent in­cludes le­gal ad­vice.

In Queens­land real estate agents are al­lowed to fa­cil­i­tate con­tracts for the sale of real estate how­ever, but be­yond the scope of this, it needs to be taken on by a solic­i­tor for the trans­fer of the prop­erty and/or any le­gal is­sues re­lat­ing to the trans­ac­tion.

To en­sure you are get­ting the best value for money, un­der­stand your real estate agent. Know­ing what ques­tions you can and can’t ask will put you one step ahead.

Real estate agents are lim­ited to of­fer­ing ad­vice about real estate.

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