Complete the attached Risk Management Table below by identifying three (3) potential risk areas in both the sales and the property management departments in an agency. As you complete the table, you will need to:

1. identify three (3) risks areas
2. identify three (3) potential risks for each of the risk areas
3. determine the likelihood and consequence for each of the identified risks
4. calculate the impact for each of the identified risks
5. identify three (3) risk minimisation strategies to address the potential risks in each identified risk area.

RISK MINIMISATION TABLE

Risk area	Potential Risk	Likelihood (1-5)	Consequence (1-5)	Impact (L x C) Total	Risk Minimisation Strategy
Example: Appraisals	Inadequate research	5	2	10	Research property and area thoroughly
	Lack of knowledge of area	2	1	2	Implement document and record keeping procedure
	Not providing written CMA and keeping copy for file	1	4	4	Staff training
Risk area 1:
Risk area 2:
Risk area 3:

Risks associated with Sales Agents deal with vendors and prospective vendors, purchasers and prospective purchasers, clients who appoint the agency as a buyer's agent developers and more. Potential Risk Risky Activities Prospecting for new listings Not checking the Do Not Call Register Breaches of Privacy Act Focusing on strategies with little return Not setting aside regular prospecting time each day Not monitoring results Conducting Appraisals Not doing personal inspection of property Inadequate research of area before appointment Not providing written CMA to prospective seller Not following up after unsuccessful appraisal Listing Presentations Inadequate preparation Making unsubstantiated claims Incorrect completion of Form 6 (Listing agreement) Not checking Title Search for correct ownership and property details Marketing Misleading images or text Not getting signed marketing authority Not getting signed detailed marketing schedule Not sending marketing to client for approval before promoting property Incorrect completion of documentation Missing signatures or initials Not checking correct details of buyers and sellers on contract Missing important fields on documentation Not sending coples each party Buyer inspections Not giving Form 9 Entry Notice to tenant of rented property Being careless about security of property Being careless about OHS issues Giving misleading information to buyers Divulging confidential information Monies Not advising buyer of Time of the Essence' for deposits Not issuing Trust Account Receipts Not banking Trust monies immediately Using Trust monies for general agency expenses Settlement Buyer's finance falling through Unsatisfactory building or pest inspections Contract terminates because the buyer's property does not sell in a 'subject to sale' settlement clause Risks associated with Property Management (for both agency Property Managers and Resident Letting Agents) While managing properties, agencies deal with: landlords and prospective landlords, tenants and prospective tenants, tradespeople and subcontractors, local government authorities and other service suppliers. In property management activities, there are risks linked with: o staffing o completing authorities, o taking instructions, o communicating effectively, advertising, o inspections by prospective tenants, o selecting tenants, leases, o bonds, and o payment of rent. Potential Risk Risky Activity Appraisals Inadequate research Lack of knowledge of area Not providing written CMA and keeping copy for file Managing Agency Agreement Not checking Title Search for property and owner details Not obtaining all signatures and initials on Form 6 (Listing agreement) Not giving client/landlord copy of signed agreement within 24 hours Other documentation Not completing Form 1a Entry Condition Report Not completing Tenancy Agreement Form 18A correctly Not giving tenants copy of Form 1a and Form 18A prior to tenant taking possession Tenant qualification Not checking references thoroughly Not checking ability to pay rent Discrimination when choosing tenant Not sending bond money to RTA within 10 days of receipt Other documentation Not completing Form 1a Entry Condition Report Not completing Tenancy Agreement Form 18A correctly Not giving tenants copy of Form 1a and Form 18A prior to tenant taking possession Tenant qualification Not checking references thoroughly Not checking ability to pay rent Discrimination when choosing tenant Not sending bond money to RTA within 10 days of receipt Asset Management Not advising client of ongoing maintenance issues Not attending to maintenance requests from tenant Not engaging qualified tradespeople No procedures to minimise vacancies No regular inspections Monies to landlord No rental arrears policies Failure to send regular statements Risks Associated with Agency Administration involve dealings with all the individual people and organisations already mentioned, as well as: employees suppliers industry and state bodies e.g. the Office of Fair Trading, RTA. Agency administration activities have risks associated with: staffing equal employment opportunity terms of employment staff records training pay and commission workers compensation Occupational health and safety disciplinary and grievance procedures resignation and termination selection of contractors and contractors' liability financial records and trust accounts record keeping and security of Information security of premises, fixtures and fittings, office equipment, vehicles handling cash. The following table enables a very simple and straightforward method of assessing: Likelihood. Severity, and Potential Impact of a Risk Step 1: On a scale of 1-5 evaluate the likelihood of the risk occurring. 1. Highly unlikely chance of occurring 2. Small chance of occurring 3. Moderate chance of occurring 4. Quite likely to occur 5. Almost certain chance of occurring Step 2: On a scale of 1-5 evaluate the severity of the potential consequence for the Agency and / or the Agent. 1. Extremely small impact if any 2. Small impact on business objectives 3. Moderate impact 4. Quite severe consequences 5. Very high impact on business objectives Step 3: On a scale of 1-5 rate the Risk Impact for the Business by multiplying the score for likelihood by the score for consequences, e.g. Likelihood of 3 x Consequence of 4 = score of 12. 1-5 Low Usually no action required 6-10 Low to Medium Monitor 11-14 Medium Develop action strategy 15 - 19 Medium to High Implement actions as soon as possible 20-25 High Initiate Action immediately