We dissect what a 10 out of 10 auction process looks like.
We'll also unpack the differences between private treaties and auctions, and why a top agent needs both in their toolbox.
This training will help you understand and believe in the auction process.
We also share effective auction strategies and the critical role that vendor servicing plays.
We emphasize weekly buyer's meetings and presenting comprehensive weekly reports to vendors.
Hear a heartwarming story about an agent who went the extra mile with a first-time auction attendee, resulting in a listing.
We dissect what a 10 out of 10 auction process looks like.
We'll also unpack the differences between private treaties and auctions, and why a top agent needs both in their toolbox.
This training will help you understand and believe in the auction process.
We also share effective auction strategies and the critical role that vendor servicing plays.
We emphasize weekly buyer's meetings and presenting comprehensive weekly reports to vendors.
Hear a heartwarming story about an agent who went the extra mile with a first-time auction attendee, resulting in a listing.
John Panos, John McGrath, Troy Malcolm, it is that time of the week where you get your best value real estate training in all of Australia, New Zealand. That's what I actually think and the reason I say it is not only do we promise a guarantee on it, but we're actually not taking any money from you. Like all podcasts are hey John, hey Troy, how are you? Well?
John McGrath:I tell me that's right. You get what you pay for here at MDA, and neither risk can go wrong.
Tom Panos:What's that? What's that? What's that? One line saying you pay peanuts, you get. What do you do? You pay peanuts, you get monkeys, is it?
Troy Malcolm:Yeah, you pay. You want to get the million dollar agency, and, tom, that's what it is.
Tom Panos:You pay peanuts, you get MDA and I'm the organiser. But I've got to tell you there's something nice about today. I think it's the fact that I know this is the last week of winter. You can feel it's getting warmer, you can feel people are thinking okay and it is a key time in real estate. I don't know what you're hearing, troy, from your team, but there is stock that's coming on the market and there's an indication that more and more stock will come on the market, and the topic we're going to talk about today is in line with that, because I think, if you're an auction based agent, you want to make sure that you're running a 10 out of 10 process from the minute you list it to the minute the auction starts. You want to make sure that your vendors and buyers are getting the best experience, and we're going to drill down into the most important components of it.
Tom Panos:We all love auctions. We all do we? Actually, I saw, john, you did an auction two weeks ago that was carried by the press. Where was that property at? By the way, john, you did an auction two weeks ago.
John McGrath:Yeah, surrey Hills with Mark Foley, we did a little boutique warehouse sold for 3.32 million, 3.321, I think, yeah, it was good, it was good. But the thing I love about today, tommy, is that auction is in a sense, exclusive to Australia. I mean, hardly anywhere else in the world does many auctions and if they do them, typically they're desperate sales sold by the local sheriff or mortgagee. So I think that this is a really unique opportunity. We've got the agents and the top 100. Tommy, you coach many of them. Most of them embrace the auction process. G'day to Alex Jordan. He doesn't. He loves private trading, so that's good. There's always exceptions to the rule and Alex he was like it's funny.
Tom Panos:It's funny you say that, john, because we had a zoom with our gym members the other day and someone asked that question. They said Alex, you're the best agent in the country, yet you do zero auctions. Explain, and it was so eloquently explained by him. He was actually very supportive of the auction system. He basically just said that this is the model that I operate. I know how to do it. It works for me, it works for my marketplace. It's not a marketplace where most of the buyers and sellers are used to auction and before we go on on that, that does play a level of some sort of importance whether that marketplace, the buyers and sellers, are conducive to auction as being a method, or whether you're the only one that's doing an auction for the whole year. What do you think about that?
John McGrath:Yeah, look, I think so. And Richard Chaloub is a true who's incredibly successful, works for us in the CBD of Sydney and writes several million dollars, doesn't do auctions either, because the market, specifically Welsh Bay and Merangaroo, that he works in, he says that they're not auction markets either. So whilst I say, and I believe it's the most exciting and probably the most successful method of selling almost any property, I totally respect that it's not for everyone. So you know you've got to make up your own decision, but I think you need to have it in your toolbox and Alex does easily do auctions. It's just occasionally and I'm just saying how did the skills? So we're going to talk a little bit about the process today and hopefully we'll give some insights. And other than that, I mean do you guys do it or Jim Tommy, do you do auction coaching training? I assume you do.
Tom Panos:We do, but we don't do significant because it's actually. I mean, the data across Australia will show that there's far more properties sold by private treaty than auctions. Right, but we know that. But it's funny, john, we haven't really touched on this subject in all the time we do the podcast. We don't normally pick one method and just sit there and talk about it, but that's what we are going to do today.
John McGrath:Yeah, yes, so truly, you know I might kick off and just you know see where it takes us. I'll just give a few insights of what I think are some of the key elements of auction and many of the problems you've probably just alluded to them. I'm going to be very similar for private treaty. I don't think the process of listing properly and selling properly up holds apart. I think there are some distinctions, some small nuances in them, but overall I think, whether you're doing a listing presentation for a private treaty or an auction, there's a few components that are really critical.
John McGrath:First thing on Troy, I think for auction, is you've got to believe in it and a lot of people don't do it. It's because they just they haven't had the experience, haven't been trained well, they just don't believe in it. So you've got to expose yourself and you've got to convince yourself. This is the right method, because if you're going to convince a client, a potential seller, you got to convince yourself first. I always take the view tell me that. You know my role in representing is not to sell your property because you can do it yourself, or the guy that just finished it you know, haberfield Tafe could do it as well. The question is how do you get the most outcome, the best outcome, the highest possible price for your property? And I think the auction method comes into its own, especially if it's. If I had an estate and there was 50 identical properties on the market right now, I probably wouldn't be optioning the 50 first. But most people are not in that category. They're selling residential property, which is everyone's got a bit of uniqueness. So I look at it and I say how do I get the most price for your property? The formula which we work to, troy, as you know well, is the more buyers I can get interested in your property and I can not just get them interested, I can get them emotionally connected and committed to your property and then I can create, if I can create, a competitive tension between those that are interested, then I'm going to get you the best price.
John McGrath:And I think auction is the perfect box to tick for that third element, which is competitive tension. You can do it without auction, by the way, but I find it's just the perfect. And you know you guys are great auctioneers. You know what it's like when you've got five buyers there and they've all figured out the property's worth a million dollars. Every comparable says a million, and then you bring the hammer down at a million, 120 and you know the last 120 was competitive tension and adrenaline. It kind of feels pretty cool as an agent or as an auctioneer to preside over that process.
John McGrath:So I look at it and I think well, why auction? Predominantly to get the best price. Sometimes it's because some of the properties we sell are pretty unique, they're different from anything else that's sold, and I always find that once you take the price pressure off the market, then it allows the market to engage, get excited, give you feedback, which is always good, because you don't want to overshoot the runway by listing something that's worth a million at 1.5, hoping because it's an unusual property. So then I just say well, you know, let's come Troy back to the auction. What do we do to get that right? How do I get more buyers emotionally connected and in competition? Well, pricing, which we talked about a little bit off camera, and we're always sensitive to the Queensland situation where they have restrictions on price quoting and we're sensitive to that. But you know, I think you've got to get the pricing right, be it private treaty or auction.
John McGrath:The beauty of auction is, tom, it allows you to not commit to one finite price at the get-go Most states you can commit to a range. You can then build that range. If the competition suggests that the range is at the conservative end, you can build that. So really it takes that pressure off. So I'm very careful in the words I choose when I'm with a client and Troy, you've been listing appointments with me when we're talking about guiding price on auction, because I think that's one of the beauties of auction and I'll often say, troy, you know, right now we don't have to commit to a price. We need to have a robust discussion about the likely comparable sales that the buyers are going to point to when they assess the price of yours. And then my job is to create an emotional connection and then use competitive tension to help us maximise price. And so people generally get it. So it does take a bit of pressure off price because, as we all know, in private treaty you've got a lot of agents who are out there. They're quoting a higher to try and win the business than they're apologising and backtracking you know from day one. Or they're quoting what they do might be a realistic price range and they missed the listing because of end or thought they were negative. So I think the ability to take the pressure off price day one is important. The opportunity to build competitive tension is critical.
John McGrath:We did one last week. I was due to do the option. I went to the listing with Tracy and Sam over at Loggerville. Anyway, long story short, you know they were hoping to get close to 20 million and we did. We sold it before auction last week. We had three people that all wanted it and the bidding sort of came in just beneath the $20 million range. So it's not just about a price range, it's about a process and because we were able to get a number of people through the property, identify the top three potential buyers who all wanted to try and acquire it before option, and the vendor was happy with that outcome to sell it before. So then we were able to extract the best price before. So that's a beauty, troy. It gives the opportunity to sell before, during or after over the year.
Troy Malcolm:Yeah, that's exactly right, John, and I think the other thing we've got to always remember is that when you're taking a property to market and into an auction campaign, you're not only looking at the retail sales that indicate value, you're also looking at being on the market in competition, not just in isolation. So it's actually the timing of the market and the dialogue you're having with both buyers and sellers because we've seen recently properties that have come onto the market their circumstances, they've sold the property that becomes the new benchmark for what are the recent sales in the area and those properties that are pipeline to come on. So it allows for that. I think the tighter timeframe in regards to days on market also is a really great strategy for a lot of owners right now in the market.
Tom Panos:Yeah, and Troy, I put you on a lot of auctions, and so here's my view. Tesla said to me the only reason I went to auctions is to reduce the amount of the total decisions I was having. When the market turned a year ago and I said, tell me more, he goes, I would sell a property, and it got to the stage where I had a 50% chance that this sale was going to crash, right so, and then I'd have to resell it again. This is when things were very when the market had turned last year. Since then it's different, but that's why I went into it. It actually allows you to sell a property once and not have to resell it twice or three times and only get the one fee.
Tom Panos:But probably, I think, a good use of the time I'm going to shoot I've got here right now is just in one minute, tell you what I've been able to define as the perfect option process for a listing agent, and that is one vendor report a week going out on a Monday, after you've done your summary calls on a Saturday afternoon and Monday, a vendor meeting on a Tuesday. Some people choose to do those face to face. Admit a Yak who does eight. Eight every Tuesday does am using Calendee and zoo on or sometimes on FaceTime. So he does 15 minute vendor meetings extracting feedback of values from buyers on what they think of value and hopefully, by the time you've had the auction day, you've had at least three to four offers or opinions of value. So you've got a vendor that's got some sense of what's going to actually happen on the day. So I see for vendor reports, for vendor meetings, at least three to four offers and then in this market, probably pretty auctioned buyer meetings accompanied to the reserve meeting.
Tom Panos:You know, john and Troy, I see great auction agents as the ones that sit with a buyer before the day of the auction, before the Saturday, or if they're doing in rooms and saying, hey, listen, I want to let you know this, what this is what actually happens on the day and this is what you need to do and you need to be aware of these obligations. And also, what I'd like to do in this meeting is to share with you the last three transactions that have sold in the last seven days that are going to give you an up to date idea of what's happening right here, because that's your chance if, if, if you actually had gone out and quoted two million, but you know, a week before the auction you actually feel like this actually might go for more than that. This is the time to be doing it, to be sitting there prior to auction, because nothing I dislike more than going to an auction and having a buyer walk away and turning around and saying, oh, the agent said you and I was quoting this figure. Now, don't get me wrong.
Tom Panos:There are times. There are times when a property genuinely goes over because the agents have done the great competitive tension process. But there are also times. There are also times when there are some real estate agents that are quoting loaf figures knowing that there was no way in the world the vendor would any anywhere come near that which is called under quoting, which is illegal, which we don't know of. Us here on this podcast talk about and law or, or, or suggest or endorse.
John McGrath:Yeah, you're 100% right, tommy, those weekly buyers meetings accompanied with a weekly sorry seller meetings and a weekly written report to a vendor. I find sometimes the written word has a certain gravitas attached to it that's even stronger than the verbal. I think you've got to do both. The buyers meeting leading up to the auction is really critical, plus with the benefits of being the highest bidder. Here's where the interest is, here's what's likely to happen, here's what happens if we pass it in. Here's the window of opportunity for you. I agree with all that. I think the other thing, tommy, is you need to get very close to your buyers along the way. A lot of agents make the error that, because someone's come back a second time or even downloaded a contract, that they're strong starters. It's not always the case, some of you, but they might have done that to six properties that day. I think it's really important to check in, tom, just checking if you guys got the contract. Did you have any questions? How are you feeling about the auction? Are you feeling that you made the decision? You'd like to have a crack at this on the weekend? What else would you need to make a safe purchase? Really check in with them, because it is a mistake to just assume that because someone's showing a little bit of interest if you haven't dug a bit deeper.
John McGrath:It's funny, kelly, my partner and my girlfriend that you both know she did an auction in Darlinghurst recently. She's just a little baby, one better. I think the reserve was like $6.75 and she sold it for $7.15 or something like that. She was really touched. At the end of the auction the underbitter came up and said can I give you a hug? She was just like yeah, of course.
John McGrath:She said this is the first time I've been to an auction. I felt I've met an agent that really cares about me and an agent that guided me every step. He held my hand, so I was kind of so yes, I missed out, but I'm cool with that. I didn't expect you to help me get it, but you really helped me get ready to buy it. Now Kelly's on the lookout for something to find for her. But I think that's the ultimate definition of success. You get a good price for the vendor, you have underbitters and I'm sure the others would have felt the same Underbitters who feel they've really been supported and you've done everything you could to help them get ready for the auction. I think that's a nice testament to A, to Kelly and B to the process of running an auction campaign properly. I think that's really, really important.
Tom Panos:John, I would say to you, to me it was a defining moment in vendor servicing for auctions, because many years ago I had one of my vendors ask me this is when I was listing and selling real estate. He said, tom, what do you reckon the reserve should be". And I said to him you know what I'd love to do? I'd like to ring up everyone that I think has shown some form of interest and I want to ask them what they think the reserve should be. I'll just ask them straight and then what I'll do is I'll come back and we'll just go over it. And I did it, john. There was probably about 45 per people. In the end there was about 12 that sort of showed interest in the property. I rang up those 12. I said listen, I'm seeing the owner tonight. We're going to set the reserve. He's asked me to ask you because you're one of 12 people that have shown interest. I'm not saying 12 are coming, but one of 12 that have shown interest. What do you think the reserve should be?
Tom Panos:Got the numbers of each person, went to the owner. I said let's go through it. He reckoned the reserve falls at this, he falls at this, he falls at this and he turned around and he goes. Well, that's a little bit light on. I said that's what they're thinking. I said there's a possibility. They've got a little bit more up their sleeve and they're not telling me. But this is what they're thinking and it was just so good to take the pressure off me and put it on the buys. Yeah, yeah, it's right.
John McGrath:Wayne and Harker that worked for us many years ago was a different friend. I haven't seen him for a while though, but Wayne and Harker, I remember that he was very. He was very precise in his buy and buy Buy a management, buy a feedback and subsequent vendor feedback and he did a similar thing. He would ask every single person that had any interest or as across the market, what they thought, and he turned into a bell curve so he would actually do it. You know, the old station bell curve is so well. There's a few bargain hunters that thought it was only worth about 1.2. As you can see, the bulk of the interest is sort of saying one, two, 50 to one, three, 50. A couple of people mentioned one for. They said they're not going to come and bid. They thought maybe that it would have reached around one for, and often when you see so, everyone's got a different approach. But Wayne was a very successful agent and, yeah, that was his approach. Last thing, Tommy, because I know we're pressing hard for time, we've got a couple minutes to go.
John McGrath:Auction important to manage expectations of both sides again, a private treaty or not, but especially with auctions, I think you have to be savvy. You have to be street smart. Just because you've had 12 people come back and take your contract doesn't mean you can have 12 bidders tomorrow. I think you need to be a little bit careful with your pickle Love it. Sorry, my little dash out of my scratching. You've got to be careful with your feedback because it doesn't always go that way and you know you've got to. You just got to be mindful, Hang on.
Tom Panos:By the way, everyone if you're listening to this podcast you can't see, but Johnny is a wonderful dog decided that it was going to rip into and do an interior decoration of his study.
John McGrath:But continue going, john, continue going, yeah so I just think you know all agents and everyone needs to develop a really strong skill around managing expectations, because the only thing generally that gets an auction or a private treaty sale not sold is when you've got a buyer down here and the seller up there and the gap never gets closed. So it's just important and I'm not talking about you know the horrible people talk about conditioning vendors I'm just talking about managing expectations, making sure people don't get carried away on the upside or the downside. Just keep a nice even keel to information and as way in a harker. As I said, what a great study of success there. He actually built a curve for every property he was representing and it showed where the level of interest was, where the bargain hunters were. So I think, just develop your own style and your own process.
John McGrath:You've mentioned Amit Nayak, one of the great agents in Australia. He does 15 minute, 20 minute bend door weekly calls, backed up with a weekly written report, which is why he's one of the most successful agents in the country. So just make sure that you really have a stroll reporting process and you eliminate your subjective commentary and you start talking about market feedback and data from other things that have been listed and sold along the way.
Tom Panos:Really important beautifully said, john and Troy. I'm going to finish off on this note, bit of a somber note, but I'm letting everyone know that's going to be listening to this podcast. You'll see a post in the next 48 hours remembering Stephen McMurray and I'm going to be putting a link to where he wanted any support that was going to be given. He doesn't want flowers. He did pass away. Many of you do know that. Many of you might not even know Stephen because he wasn't. Stephen was not the kind of agent that was flash on the stage at conferences. He was with you, john, for many, many decades. He did go to Ray White for a short stint and then had come back. And, john, I know that in the last few months you were spending a fair bit of time with him, both at his home and also at Life House. Stephen McMurray, I don't know if you want to say anything about Stephen, john he was an incredible agent.
John McGrath:Thank you. The most important thing was a bit of a human being. I had the pleasure of go to school with him 40 odd years ago at Sydney Boys High. He was a great athlete, he was a great human. He started business as a mechanic at age 18. He was a mechanic for 10 years and decided it was bloody hard work and there must be a better way to make a crust. He got into real estate and soon after, joey Dustin, was with us the majority of his career, as was his wife and still is his wife, lill. Now one of his daughters, julia, is working with us as well. Just terrific.
John McGrath:For those that knew him, we'll know what we're talking about A man of integrity, a man of quality. You talk about doing the right thing by buyers and sellers. He was the best embodiment of that example of that I've ever seen, which is why he had a well, 32-year, successful career. It's not hard to have a good year in real estate. It's hard to have a 32-good years and he had 32-good years. Thank you for mentioning it, tommy. We loved him, we love his family and we'll be doing everything to support them going forward. But, guys, health is critical, so make sure you do whatever you can to look after your health. We will see you at the same time, same place next week, john Troyer day, winding up.