Broker Q&A

22 Dec 2023
Words Jessie Shi Informer 109

Broker Q&A

In her four years with ResortBrokers, Jessie Shi has established herself as one of Brisbane’s foremost management rights specialists. Her commitment to delivering exceptional outcomes for her clients has resulted in more than $65 million worth of sales … and she’s never had a deal fall through.

Jessie Shi

Jessie Shi

Broker, Brisbane
0422 935 428


How have you managed to never have a management rights deal crash?

It’s one thing for a broker to find a buyer and secure an offer, but the most important thing is to successfully see the sale through to settlement; that is, close the deal. It’s easier to list, much more difficult to settle.

Management rights are different from other commercial property assets because it is a going concern business that is being sold. Consequently, due diligence involves multiple third parties such as accountants, lawyers, financial brokers, banks and bodies corporate.

Issues will inevitably arise during the settlement process, which can take between four to six months. While the broker’s client is the seller, an effective broker will consider any problem from both parties’ perspectives to steer it through to settlement.

So far, all the properties I’ve sold have been successfully settled with none having fallen through. Being practical and solution focused is really important, as well as trying to foresee problems before they arise. A key part of ResortBrokers’ sales process, and a major reason for our success, is that we rigorously qualify buyers.


If you had to choose one thing a seller must do to enhance the saleability of their management rights business, what would it be?

There are many things they must do, but if I had to choose only one it would be to engage a specialist management rights industry accountant to prepare their P&L statement for sale. This is a specialist industry, so using industry specialists is crucial.

Buyers will have far more confidence in the accuracy of your P&L if it’s prepared by experienced industry professionals rather than a non-industry accountant or yourself. All experienced management rights buyers use industry accountants to verify the figures on the P&L. If your net income as stated by your accountant doesn’t match up with theirs, there’s a real risk the deal will fall through. At the very least, the buyer will demand a reduction in the sales price and walk away from the deal if they don’t get it.



What should sellers look for in a management rights broker?

The first thing I’d say is what vendors should not look for. And that’s commission. Actually, what your broker makes from the deal is irrelevant. What’s important is how much money you, the seller, are going to make! The broker who’s going to get you the best price and has the best chance of getting you to settlement, is highly unlikely to be the cheapest broker charging the least commission.

The three key things for sellers to look for in a broker/brokerage are experience/capability, track record and volume. Volume matters because it gives your broker/brokerage clout with third parties like solicitors and accountants. It means they can push things through for their clients. A small volume broker/brokerage may not have this influence to see their deals through in as timely a manner as possible.


OK, let’s turn to buyers. Increasingly, there are more first-time buyers who want to enter the management rights sector. What preparations should these buyers make?

Get qualified! If you’re a novice buyer who’s completely new to the industry, then completing the full real estate agent license course is an absolute must in my view. Technically, all you need to be a management rights operator is a resident letting agent licence. But savvy caretakers get the full real estate agent licence. It always pays dividends to know your industry inside out, to stay abreast of all relevant legislation, and continue your training and professional development. You’re investing a lot of money in your business, so educating yourself makes perfect sense.

I highly recommend choosing a reputable course provider such as Professional Real Estate Training (PRET). With PRET you can complete the course in as little as 10 days. Their course content is compact and includes case studies to make it easier for students to understand the real-world application of all the rules and regulations.



After you’ve done the course, then what?

Book an appointment with an industry specialist finance broker. Most buyers need to take out a loan to buy a management rights business, so they need to understand their own borrowing capacity in terms of how large a management rights business they can buy. An industry specialist loan consultant will evaluate your borrowing capacity so you can get a price range for the management rights businesses you should be targeting in your search.

Specialist management rights agencies like ResortBrokers can then recommend appropriate businesses within your price bracket. Let me reiterate one of my key points above: management rights is a specialist industry. So, save yourself time and heartache by engaging experienced industry specialists. This includes everyone from your broker right through to your solicitor and accountant.


Nowadays, management rights sales generally take between four to six months to settle from the time the contract is signed. Is there any way to shorten the settlement time or otherwise avoid delays?

Some delays are unavoidable, but in my experience there are two areas where buyers can speed things up.

Firstly, after the sales contract is signed, the buyer should immediately instruct their solicitor to order a search of the body corporate roll. This usually takes between one and a half to two weeks, sometimes longer, to come through. Some buyers wait until their accountant has done income verification of the seller’s figures before ordering a body corporate roll search, but there is no need to wait. If they wait, they have lost two weeks, possibly more.

Secondly, after the buyer is satisfied with the income verification, they should immediately arrange for their bank to appoint a valuer to conduct the valuation in preparation for finance approval. There’s no need to wait for legal due diligence to be completed before doing this. Valuers are often booked out well in advance, so it’s best to get this arranged sooner rather than later. The valuer will need to perform a site inspection, which alone can take one to two weeks to arrange once the valuer has been appointed. The valuer will then need another week or so to complete the valuation report, and the bank will need another two to three weeks to finalise the loan after receiving the report. If the buyer waits for legal due diligence before arranging for the valuer, it will delay settlement by many weeks. END

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