Live Q&A from the Black Belt Retreat 4-5 Aug

Recorded live at the Black Belt Retreat on 4–5 August, this Q&A session features Tom Panos, John McGrath, and Troy Malcolm answering real questions from attendees. Covering market conditions, pricing conversations, leadership, recruitment and high-performance strategies, this episode delivers practical insights and actionable advice for real estate professionals.

Transcript

Meet Troy And The Northern Beaches

Tom Panos 0:00

I want to let you know we're going to do this. Now, Troy, John and I have been doing up this podcast since 2013. It started with John and I, and then Troy came in. He started off as our A V technician, right? And then the next thing you know, he came up with new graphic designs a month later where the three of us were on the podcast, right? Right. And then, and then you know what else he did? I'll tell you what else he did. He went and he went to JB High or some shop in the city that had the greatest microphones. So John Lowe, so for around five years, John and I sounded shit, and he would come in with those, you know, that golden mic. You've got to make and you can win. But Troisey, I've seen Troizy, I've seen this guy develop as a guy that is, you're like a bit of a like a, I wouldn't call it a stun-double, just as a support person. Now, this guy here is running big operations in the northern beaches. Troy, because a lot of the people aren't in New South Wales, yeah, and they've always known you as the podcast with us, and they've always known you being head offers as training, education, leadership. What do you do now?

Troy Malcolm 1:11

Uh so I am the managing director of three of the McGraw offices. So Manley, the Forest, and St. Inaves. They're on the Northern Beaches. Uh we've got 53 staff across those offices. Um, mix of sales, property management, and also um operations marketing, a full service uh operations. So we have a little beautiful place on the Northern Beaches. Those that know Manley, we're directly opposite Hugo's. So arguably Australia's best real estate office across the road from uh the beautiful beach there at Manley. Uh, but we've got an amazing team, and a lot of them have been loyal long-term members. Like I started in 2001 in this business working directly for John. Uh, but I grew up on the Northern Beaches. So I always had this desire to go back. Um, and you know, four or five generations later uh of my family being on the Northern Beaches and Manly and surrounds, it's really nice to go back and reconnect with with everyone up there. So that's in a nutshell,

Why The Inner Market Wins

Troy Malcolm 2:06

Tom.

Tom Panos 2:06

So, team, let's start off. John, when what what did you get into real estate out of curiosity?

John McGrath 2:12

Oh shoot, 80 property management, 83. 83.

Tom Panos 2:19

Right. This market that we're seeing right now, how do you compare it to so you worked through the 9092 correction?

John McGrath 2:30

Yeah, all of them in the late 80s. In fact, I opened the office in 89.

Tom Panos 2:34

So you opened in 89. That was the the big boom. The 88 boom.

John McGrath 2:38

The big bust. The big bust when it came off a clip 89.90. Um so the answer is I've been through half a dozen of these. If your question is, what do I think about this? See, I've evolved, and hopefully the company as a result of my evolution evolves too. I don't think the actual physical market, economic market has much to do with anything. We talk about the inner market. The reason most properties are not selling today, in my opinion, is not because of lack of buyers or buyers not wanting to buy. There's plenty of transactions happening. It's the conversations with the sellers that need to be had and not being had. And some sellers are still hoping they'll get two million for their property because the neighbor sold last December for two million and theirs is as good. Reality is theirs is now worth 1.8. The agent goes out there and quotes 1.9 to 2 million, the buyers don't turn up the auction. It's another statistic. So my my my my view is the bit Arm at Nyack, yeah, in our Paramatter office. Um last month he went away from them and his team sold 23 profit in his absence.

Tom Panos 3:43

I think he's coming in later with con. He's in this program, John. Oh, awesome. He's you know who admitted, he spoke here last time we were here.

John McGrath 3:51

Yeah, and you know, Matt King's group last Saturday did 12 out of 14 auctions. I'm not I'm not spreading about him, I'm just saying there are results happening, and I know there are some non-results, and I saw your your post. Um I get it, but statistics cover the whole spectrum. What I want to do is say, what are these people doing? What are the people that are getting 12 out of 14 doing? So we got a webinar tomorrow. No, so we did ours today. Today, print principle IMR. We're gonna talk about what they're doing that's different. So my my view is the inner market's the only one that matters. This current market is no different from any other correction. You know, markets down 15% in six months. That's kind of the headline. That's about it. Some markets are not affected, other markets are down 20%, but you know, the headline would be 15% in six months.

Tom Panos 4:39

Um What do you John? Do you think the bottom is near or years?

John McGrath 4:44

Well, statistically, if you look at the last six corrections, other than one, they've all none of them have gone beyond the 15% correction in price. So that would suggest historically we're kind of at the bottom. Um if this one's different, I'd be surprised. I think we're towards the bottom. I think um what are the factors that are the biggest factors now? Interest rates, and are they going to keep going up? That's that's concerning people, and obviously coming back to borrowing affordability at one. Um, obviously the global uncertainty with Trump in Iran, you know, that's meant to have finished several times but hasn't. That finishing will help petrol prices eventually, it'll help cost of living crisis. Yeah, so that's it. I think the market had gone a bit far, too, in many markets. Sydney certainly is the one that you know, probably a lot of our businesses in probably went a bit too far and had to come back. It was due for a breather. And so I think you've got the the breather that it needed to have. I think you've got interest rates, host of living inflation, unrest globally, um, you had a whole range of factors. Then more recently it had the the government throwing out a budget that's property unfriendly. So, no, you know, it's actually it's performed pretty well. When you think about all those things, the fact that it's down 15% off probably a 40% increase over the last four years, it's not too bad.

Tom Panos 6:03

Yeah.

John McGrath 6:04

I mean, I've I do the only thing that matters is what's happening right now. And if it's down 15%, it's down 15%. And if your sellers are down 15%, their expectations it will sell this afternoon. Yeah. And if they're not, it will never sell until it eventually catches up, which time they might have gone further ahead. So I think it's a it's about listing. It's about, you know, people that are selling right now need to be aligned to where the market is, or they just ain't gonna sell. This is not a market where you can start in the listing, a little bit of a high expectation, and there's a probably a pretty good chance you'll get eight buyers at an auction, and we might get there, might even get more. This is a market where the buyers know what it's worth. The buyers are hunting for a bargain, the best buyers are prepared to pay fair market value, which is 15% less than six months ago. So you've just got to be fishing where the fisher. And if you can't have that straight up down conversation with the vendor and get them a line, you're going to be one of those none out of six or 40% clearance rate statistics. So the industry is a big part of right now, because three months ago, a lot of sellers were still hanging on to what I could have got a month ago. Now, anyone that's listening today should be there's there've been plenty of headlines, plenty of statistics, plenty of sales in the neighborhood at the new market, plenty of agents they've probably spoken to about what they're really worth today. So, you know, you've just got to be aligned to that level. I I don't think it's too bad. I actually don't think it's too bad.

Tom Panos 7:30

So,

Interest Rates And Buyer Affordability

Tom Panos 7:31

John, in your mind, compared to do you remember what it was like in 1990?

John McGrath 7:36

Oh, yeah, yeah. That was when interest rates are at 18%.

Tom Panos 7:40

Was much worse.

Speaker 2 7:41

Well, you imagine that in today's dollars, median price in year is $1.7 million. So to take out an 80% loan, you'd have to be buying, you know, one and a half million bucks at 18%. Forget it. You couldn't the only people who are buying those that had cash or trading down and and cashing up. That was really hard. That was really hard. I don't think this is too bad. You can still get money, you can still get loans, you're paying a little bit more, but here's no, you're not paying any more than historically. Most people in Australia over the last 30 years have paid an average of around 7% mortgage. That's where we're at. So it's not like this is some 18% like back then. This is sort of like about the average. It's the law of contrast that says, well, five minutes ago, two years ago, it was kind of down at 0% cash rate and 2% or 3% mortgage rate. So it feels like we're paying a lot, but in actual fact we're not. So that's hibbed affordability, which means the guy that had $800 to borrow has now got $650, $700, and if it's an investor and they can't negative gear, they might have $550. So that impacts everyone, comes down, fair enough, the market gets reset. We haven't had many, I haven't seen them through our group, and maybe it's siffing in your market, but we haven't seen many distressed pressure sales where people are giving stuff, where banks are taking over. We haven't seen much of that, thank God, because that's when the problem comes. Because every time a desperate seller takes a bargain price, that resets the market for everyone. So if you're you know selling a home in Homebush and all of a sudden the bank sells something up for 300 grand less than it probably should have, that's the rational at all.

Tom Panos 9:17

I did

Forced Sales And Price Freefalls

Tom Panos 9:18

a post, I did a post on that this morning. There, I'm not seeing for sales. And if you don't see a forced sale, you don't see a new price point on a CMA at that level. The problem that you have, when you look at property prices collapsing, what you'll see is one common denominator: a large number of people that are distress selling at the same time, which creates a new price point. That is not happening. Troy, what do you say?

Troy Malcolm 9:43

I was gonna say we're gonna look back, I think, in six, twelve, eighteen months' time and go, God, that was good value buying. And I think that it depends what your clients are doing. And I think the education piece around edge, like knowing what their next move is and getting deeper on that relationship. If they're trading in the same market, obviously if they're upgrading, they're gonna see a benefit. The small portion of downsizers, they are making decisions when it's not necessarily they're taking a loss, they're just deciding to hold on for longer in our market.

John McGrath 10:13

It's a two-sided market, and you've got buyers and sellers. Pretty simple, it's not too complicated. Your buyers are out there wanting to get a bargain at best, but most of them are prepared to pay the new price as long as it's the new price 15 cent less than a year than a year ago. So, you know, the the graph and you've got it, Tommy, and if not, we can share it, you can share it. You know, we'll show that the last six or seven corrections, they they rarely go above 15%. So we should be at the borrow.

Tom Panos 10:40

And normally 12 to 18 months.

John McGrath 10:42

18 months. Yeah. 18 months. How long they last? So they go above.

Tom Panos 10:46

So I think that's um So team, I'm gonna tell you the most common thing I've heard in every correction, this time it's different. I've heard it. Tom, this time it's different during the COVID. Tom, you don't get it. This time it's different. The whole world's gonna die. GFC, Tom, this time it's different. You don't realize the banking system is shutting down, right? It's never different, right? It's never different. And we're gonna look back.

John McGrath 11:13

We're blessed with residential property for a number of reasons. 70% of them are owner occupied. So it's not like investments. Every share, you don't live in a share, right? Every share is an investment. So if you are having struggling with the cost of living, you're fearful for the future, you just gump the shares, you go to Comsec or whatever account you go, or you're in your broker if they still exist and sell them. So 70% of our uh our portfolio of $12.5 trillion worth of property is owner-occupied. So look, owners, worst they say usually is well, let's just hang on for a couple more years if they want it. Yeah. So I think that's a benefit. The other thing is shares, if you have a loan on them, as you would know, a thing called margin call, if you have a loan on them and they drop below a certain amount, they will force you to sell or they'll sell it for you. That doesn't happen to residential property. If you bought last year for a million, and let's say theoretically the property is worth 900 today and you've got a 950 mortgage or 920 mortgage, whatever you might have, um, they don't force you to sell it. No. They don't even know what it's worth. As long as you keep paying the mortgage, they're happier. Commercial property, however, many of you in the area in the room are familiar with that, they can force you to get revalued and top up. So in Resi, which I think is the majority of people in this room, we are pretty blessed we have some natural buffers called owner-occupier, um, called no margin call, no forcing to sell up. And most banks will kind of, and I'm not being critical at all, they'll show the blind eye. A lot of banks know there's a percentage of their portfolio underwater. We've lent, you know, this much money, values are dropped, and you know, percent, but as long as people keep paying, and even those that stop, they'll give you time to sell it, you generally, or they will, you know, sort of give you a honeymoon on your repayments.

Tom Panos 12:58

So that's so Burrus, actually Burris is speaking after the break. Burris said to me when that those storms were in Lismore, and he said, You need to understand we've got a problem there because a lot of those properties are worth lower now than what the loan is. And then I go, What are you going to do? He goes, Listen, banks aren't in the business of just, you know, going off and goes, you work with people. We're past that, right? And banks don't want to have that reputation. You've noticed it. You know when you get a mortgage e-sale, how often the instructions are, like you don't get that many. The instructions are not to use the words, not to put in the marketing. They have that, you know, the middle party that actually acts between the bank and that. It's not, it's not like it was in the 80s and that. So I think that's gonna, you know, help

Buyer Dialogue Without Pressure

Tom Panos 13:45

us. Now, welcome back, Belly, part two. A V.

John McGrath 13:48

Um give you an example. Belly will know this one worked as one of his horns. Uh another thing or two.

Troy Malcolm 13:54

Yeah.

John McGrath 13:56

You know, it was, I think it was, yeah, 15, 20 years ago, Justin Hemi. So he's a yeah, wonderful off-the-cality czar and and binion there, I think, now. But there was a lot of talk, and Billy and I know better than Eiler about this, there's a lot of talk that he's building in George Street was well undervalued. What it costs, what he bought it, what he'd spent on it, what it was then worth, and hospitality had clammed up, no one was going out. So he was in he was potentially in trouble if they'd have sold it up. They figured out if he can't make it work, no one can. So we're gonna take a big bar. So they found a way to help him forward through that, and lo and behold, he's now a billionaire. So, you know, I think the beefs are pretty good. They they try and help out. Uh, we don't have margin calls on property. And but you know, it's a buyer and seller, so you've got the buyers. How do you people were saying to me, how do I convince a buyer to buy? I said, Well, care, but not that much. What does that mean? Well, if you really love the home, Tom, you want to buy it, let's do it. And if not, if you're not ready to buy, if you don't think it's the right time in the market, just call me when you're ready. Yeah. Or if this is not the right home for your family, let's keep looking. But you know, don't pursue them with commission breath, because the more you do that, the more they they pull back. So, and you know, you can show it if you want to. You don't you can't or can't show that graph, but just say to people, look, here's the way I look at it. The market's down about 15% when you from when you and I started looking. Well done, you. Whether good luck or good management, you're 15% better off. The market's also going to jump back up that 15% at some time. Is that three months, six months, 12 months? No one knows. History will tell us it's probably early next year. Uh, but you've got to figure that out for yourself.

Tom Panos 15:32

Join, Billy had a chart yesterday. Uh Billy, I want to share that chart with my members. Is that all right? Because buyers need to see that chart as well, because buyers sometimes can fall into the trap thinking, man, this time it's different when we've got 10 case studies that it's not different.

John McGrath 15:46

And the minute they realise the market's on the way up, it's probably too late because then they've got to go out, find something they love, which will take a month or three, then they've got to stand in line at an auction beer with another 10 people. I mean, it was Warren Buffett that said, you know, you should be buying when everyone else is fearful and selling when everyone else is greedy. And it's it's very, very true. So right now is the perfect buy time. You wait too long, you're gonna miss at the boat for that's okay. You'll go back up to 15 if you can afford it. Good luck

Anxiety Drop And Vendor Truth

John McGrath 16:12

to you.

Tom Panos 16:12

Okay, guys, I'm gonna I'm not gonna go and put the name of the person because he doesn't want me to put the name. So I've got a series of questions here that they put in. Yes, he is. Is he in the romance? Or I can't fucking say no, yeah, yeah. No, no, it's all it's all good. Where it's all good. How do you manage the anxiety of a performance drop to get back on track? I feel the weight on my shoulders of my staff.

John McGrath 16:46

Of your what?

Tom Panos 16:47

Of my staff. Okay. As the selling principal and also our sellers who are struggling, I don't feel I'm handling it as well as I could. Is there any tips you can help? So, in summary, a bit overwhelmed with it and feels like he's letting his staff down, letting down his his uh clients, he's and he's dropping the performance. And I want to let you know, this person does a hundred sales a year and over, right?

John McGrath 17:14

So we're not gonna take some of the emotion. There's a lot of emotion.

Tom Panos 17:17

And and by the way, he's I just realized Angie, he's not in the room. He's not in the room.

John McGrath 17:23

Um, yeah, so there's a lot of emotion, bit of drama in that, and you've got to take that out because it is what it is. Markets people's journalists say to me often as they say to you, Tom, what's the market doing? It's down 15%. That's it. That's factual, that's what it is. Yep. Are there as many buyers as there were before? Not quite, but there's still buyers. Um so I think the the best way as a principal or an agent in the room or not in the room can grow their business is look at their current stock and ask the current question, what has to happen for this property to sell? And it's generally price. Maybe a bit of it's marketing, you need to get in marketing refresh, put it back through the the the portals. Maybe you need some presentation tips that because everyone's talking about some issues, but probably it's going to be price because price can usually solve almost any other problem. So the quickest way to do it is, you know, most people hopefully have got five or ten or fifteen listings, maybe more if you're in office. Work out what do you what do you have to do to get each to every one sold? Then you pick up the phone and you go and see your vendors, preferably face to face, but it's not. Minimum call them, maybe zoom that's greater on the zoom. Yep. Then you go and see them and you say, look, Tom, here's where we're at. I know you're after two million, market's telling me one eight, market may get a little bit worse before it gets better, and it'll probably be 12 or 18 months before we get a quantum improvement. Because we said in 12 months it'll stabilize and then eventually go up, but you know, it's it's going to be a while. So I just want to know, do you do you can you make it work at 1.8, or do you think it's better we take it off the market? And some people say, I'm never selling one eight ever. I reckon take it off the market. Good. We can do that. Well, do you really reckon that's all we can get? 1.8? You reckon 1.9? Market says no. Oh, okay. Well, could you put it on at 1850? I think if we put it on, we should be looking for anyone that's got one eight or more. So you have that conversation. And most of them are waiting for you to have it, funnily enough, expecting you to have it. Almost surprised you haven't had it. It's not your fault. That's how I start a lot of the belly. It's not your fault or mine. The markets come back, man. It's happened. Like we haven't caused it. So let's just make a business decision. And I you put the word business before decision. Let's make a business decision if you can make your forward plans work at that level. And if you can't, let's consider withdrawing it from sale, and I'll call you the minute it looks like it's going to start heading back to two million. Let's have that chap. And a lot of them there to go, it's care, but not that much. But you can't like protect when it was uh GFC 2008, Chauncey, one of Billy's many clients with us. And I remember him saying, we had him on our webinar, weekly webinar, and he said, um, he said, I saw the market changing, and I figured I had to move fast, because if I didn't move fast, my clients were going to suffer because the market was only going to go one way for at least for the next six or twelve months. So he said, instead of giving them doing buyer callbacks on Monday and a vendor callback Monday night, he said, Saturday, the minute my age of fierce are open, they hit the phones, they got the feedback, and then he said, I was going around to see people Saturday night, the vendors, give them feedback in real time, what happened at five hours before. And he said, it just unlikely went on. He said, I figured every vendor deserves to hear the truth. And he said, That was my mantra.

Tom Panos 20:44

Every vendor deserved to hear the truth.

John McGrath 20:47

And that was his mantra. So instead of doing vendor feedback Monday night, he was doing it face-to-face Saturday night, and he was getting buyer feedback Saturday afternoon. And those shifts all of a sudden started shifting his properties, shifting his prices, and he became the momentum agent in a market that wasn't in momentum. So then everyone came to him and he just adopted that same process. It's like every vendor deserves to hear the truth.

Tom Panos 21:10

Do you know a lot of real estate agents that didn't follow that philosophy prior to the budget or even four or five months before that? They've cost their vendors a lot of money. Yeah. Because they did not sit there and say to them, this is a state of the market. And I know that because I had a client ages ago that said, Tom, the thing that pissed me off is I wish that agent had said to me, take the offer, right? And then what happens is they miss it. You know what I'm hands up if you can relate to what I'm talking about. Yeah. So a lot of the times you have an obligation to tell them. Sorry, Troy.

Troy Malcolm 21:43

I

Leadership Energy And Daily Check Ins

Troy Malcolm 21:44

was going to say, on the back of John with the current stock, we we're kind of living this right now in our offices. So we we focused on four key areas. First one was for the leaders in the room to create and clear the energy. You know, you can just get a sense where people have a dark cloud above. Them, it's taking them out of the environment, taking them for a coffee and finding out what's going on outside of work. Because 99% of the problems are not actually applicable to the day-to-day task of real estate. It's something else that's going on. It may be financial pressure on their own mortgage, it may be one of their children. So create and clear the energy to make sure they're focused on what they need to do. The second one was absolutely nail buyer work. So just focus on the buyers. If you've got 10 plus attendees that are open for inspection, or you've got less than 10, what's the like buyer callback like dialogue that you can have face to face with them at the time of the open? No one's answering their phone on a Saturday afternoon or a Monday morning. So do it face to face. You'll get a real understanding of where they're at. The next one was 10 out of 10 listing presentation. So take the time when it is a little bit quiet to go back and go, right, well, let's have a look at our listing presentation and nail every element of it. And then the last one, and probably the most important for the principals as well in the room, is set some achievable KPIs around accountability and then be there with them. So we're back to pretty much daily check-ins with all of our senior agents, we're weekly one-on-ones, we're group training sessions on a Friday morning with every associate. Uh, it's role plays out loud. So can I ask you, Troy, what's a daily check-in look like?

Tom Panos 23:16

What does that what's that?

Troy Malcolm 23:18

So we've got 11 senior agents within my offices. And before 9 a.m., I speak to every single one of them. Hey, how are you? How was last night? How'd you sleep? What's on for today? What's follow-up? What blockages can I clear? And what do you need from me? And that's it. It's a it's a three-minute phone call. And they are now all in the habit of good, good, good, got a problem there. Sweet. I'll get Chloe on it, I'll get Chris on it, I'll get one of the team on it to clear it out. Um, and then they can get on with their day. Um, and we used to do this as a daily wit. Like when I was working directly for John, it was the same thing. It was a little bit earlier, 7 a.m., but it was like, right, what's on for today? What do we need to follow up yesterday? What didn't we do? And what do I need you to nail for me? So John used to have on your emails a CBF comeback file. And I knew that that was key in everything that we did. If there was those three letters, you could search those letters on any email and it'll come up with all the activities that I was still yet to do for John back in the day. But it worked really well, right? So have a system in place that allows you to keep your team focused.

Recruiting Agents Beyond Commission Splits

Tom Panos 24:24

We've got a question here on recruitment. I'm looking at recruiting experienced sales agents. What incentives are you seeing working to help agents make the decision to shift? Um I'll start off with So I think I think good real good real estate agents have got listing presentations, and I think good real estate recruiters have got good recruitment presentations. Number one. I think number two is recruitment is not a one-off recruitment, just like you prospect for listings, you prospect for people. It's an ongoing thing. So if you could just think about it, there's conversations happening all the time, and then some of those conversations might lead to coffees, and then some of those coffees will lead to come and sit at the office at seven o'clock at night when everyone's gone. And in terms of the incentives, I have a view that you should have a level playing field in your office, that everyone should be clear, that's the scale. You can have a scale that obviously rewards high performers, but people can't turn around and say, I don't have access to that scheme. No, you do have access to that scheme. You don't. I think what I do see that helps in recruitment as an incentive to get people on board is that they might sort of say, listen, to get you up and running, you're going to get X amount of deals that you're on 100%, right? That can help you with your personal marketing and what have you. And um sometimes they might look at like further incentives and say, look, we'll work with you. There will be four or five properties, we'll put you on there to give you a bit of momentum, right? They're the incentives. Guys, anything else you're sort of seeing?

John McGrath 26:16

I think you've nailed it. Um money shouldn't be the reason. They should want to join because they see their career flourishing at a higher level, data vibration, as a result of working with you. So, what's your employee value proposition around case studies? I mean, you need to develop case studies to show that when people come on board with you, their performance increases. And you know, Amit's a great, great case study for us. He joined us at a million dollars and he's nudging four million as we speak. Um, and uh we don't take credit for that, but we've been able to provide a support structure and an environment and a team of high performers around him that's been conducive to him continuing to grow his business, which he's done.

Tom Panos 26:59

He's at 200 he's at 214 sales for the 12-month period. Yeah. And he said, mate, like this market, I I mean, he's still held bent that he can exceed the number of sales in this market. I mean, he's got the goal of doubling his business. Yeah. Um, he also accepts that he might have to change the time frame on when that goal is met, right? But he's a classic guy that's in growth mindset. We're talking about a guy that used to be a chef at a restaurant probably about a decade ago, right? That's what we're talking about.

Troy Malcolm 27:33

Um I was just gonna say, Tommy, like have a system. Um, again, like we have a basic system, but I'm chasing $76 million worth of talent right now. Um, know what they're doing, but it's not all about, as John was saying, GCI, focus on what you can provide them. So is there an area that you have low market share that you want to have a presence? Is it a niche price point? Is it apartments? Is it waterfronts? Understand what they're not getting with their current team. I think that's a big one that we've seen a lot of recruits want to come to the table. They want to know what does the coaching, what does the training look like, what does our marketing look like, what's the McGrath Foundation programs look like as well. So the environment that we take them through. Um, you know, we use to our advantage the bigger McGraw USPs because we're still developing those case studies. But knowing that we do have a really high concentration of top performers in the Australian real estate industry, and we have done for such a long time, even the ones that have moved on and created other successful businesses, they attribute a lot of their success back to the MGRA system and training. So we definitely tap into that. So I think it's understanding how you position yourselves in the market and who you want to be as well. Don't just hire for GCI, because if you hire for GCI, you're guaranteed that you're gonna have tiers because it's gonna destroy or have the potential, if not managed correctly, to destroy culture.

John McGrath 28:54

I agree with Tom's point. Level playing field. You can't be doing deals under tables and stuff. It's just bad for culture, toxic in fact. But as a principal, and I know many of your agents and principals as well. I mean, if if I said there's a five million dollar listing, you'd probably spend quite a bit of time getting ready for it now, chasing it afterwards, and it probably will yield you a $75,000 one-off fee. Whereas with a great agent that writes a million, and maybe a very good agent writes a million, but might be on 60 or 65%, that's a $350,000 recurring annual fee to your business. And yet most principles ignore that and chase the five million dollar listing. Well, you need to do both, because part of your recruitment strategy might be bringing in all the good listings and then sharing them with the team. But um, I mean, recruitment generally in this industry is not done well consistently by principles, and that's the key to unlock the real value of your business down the track.

Tom Panos 29:51

There's a document in the real estate gym, which is a 72-page EBU business plan. It's been based on Tom Hector from Harris. That business plan has been intelligently used by real estate agents in recruitment, and I'll explain to you how they do it. They get that plan, they make it theirs, they change it around a little bit, nice solid document. Then they sit in front of a person they've nurtured and I'll say, Can I ask you, what's your plan? One, three, five-year plan that you've already set up. Most people don't have a one-month plan, let alone a one, three, five-year plan. Then you put it out on the table, bingo. So I'm letting you know this is the first thing they're gonna be working on with. You've got to show unmet needs and things that they don't know, right? Playing the game of, oh, I'm on 60%, I'll get 65%. I've got to tell you, whenever I see anyone recruited on percentage differentials, it always ends in tears. Because the bottom line is 50% of something is better than 90% of nothing, right? And it always seems to go back there, right?

John McGrath 31:04

In that real case study, Alex Jordan was on 90% where he joined us 10 years ago of 380, you say 380, getting 90%. We're offering him 60%. But I saw a multi-million dollar, I saw a million dollar agent and beyond Inium, and I said to him, well, 60% of a million is a lot more than 90% of 380. And I convinced him that working with us, we would have a methodology and a process that would be able to do that. Anyway, he's then hit $10 million three years in a row. So he's been, you know, like just uh greatest ever case study uh of people.

Tom Panos 31:37

The Lowry brothers, they're the two in black belt, they're the only no, yes, they are New South Wales, the only commercial people. Stand up, Lowry boy, so they know they might get a few referrals. Right? Yeah. They're the two brothers.

John McGrath 31:52

Right, guys. Great great social media, you guys.

Tom Panos 31:56

They're good. They really you've gone and you've gone and copied that guy that says, This is what five million buys you, right? You've done in commercial because I've got yeah, peep, people, people, you follow them on TikTok. Yeah, yeah.

John McGrath 32:08

I saw one a couple of days ago. It's brilliant.

Tom Panos 32:09

Okay, so the Lowry brothers have asked a question.

Converting Prospects With Relevance

Tom Panos 32:12

Thanks, guys. The Lowry Burrers currently we're and Jason, when are you getting married, man?

Jason Lowry 32:18

Uh December.

Tom Panos 32:19

Okay, we better get you some listings. All right. Currently we're running, uh, we're running away a lot of business that is overpriced or not our core stock. We are still prospecting heavily. Most of our business is long-term relationships currently. What can we do to increase our appraisal to listing to sales ratio for new owners uh we have met this year? So, Jason, maybe stand up and in your own words, summarize uh summarize yeah.

Jason Lowry 32:54

Yeah, I haven't tend to talk a lot. But we're putting a big emphasis on working with clients of the last decade that we've worked with previously, and that has been a large majority of our Lapique business in revenue this year. Uh we don't want to lose it, we want to nurture that as much as we can, but also You want immediate sellers. Yeah, we're doing three and a half thousand connects a year between Nick and I. We could obviously be doing more, but we'd love to see a higher conversion rate.

John McGrath 33:24

So that's that's calling commercial property owners. Correct. You then database them, have some sort of an ongoing communication conversation with them. Three and a half hours, that's a good number.

Jason Lowry 33:36

Vendal connects, and um we we try to adopt the approach recently just to add as much value to people as much as possible and talk less about ourselves and what our results are. We're taking a view in decades and up weeks. We'll be listening and loading in the gym as well. Uh we can immediately tell it the dialogue and conversation changes straight away when you change your mindset. So we're probably I mean, speak for myself and it, but I'd like to see more of a conversion rate, but I guess it's a it's a tiny education.

Tom Panos 34:16

You got look, I I'll tell you, I get asked I I get asked this a lot with people, and one of the things you've got to watch, Jason, is that you can overreach with a bit of commission breath when they're not ready for it because you want that appointment, right? You've you've so I think it's I think it's a fine balance with having making it easy for them to say yes to actually get in the door. But at the same time, I think that sometimes, and I see this with a lot of associates, there's resistance from that owner. The agent has been brought up, nah, nah, nah, do what you've got to do to get in the door. They're not ready, they start seeing as being pushy. Six months later, when they are ready, they think to themselves, fuck, you were, you know, like you were like being a little bit commission-y breath. What's what's your view, guys?

John McGrath 35:04

The other thing, Jace, if they're not, and you might be doing this, but if they're not thinking of selling, they might be thinking of buying. So you could convert them. So it's a double-ended opportunity when you call them. So if someone thinks the market's not good enough to consider selling, they might think, therefore, the other side of the coin is it could be good enough to start buying. So I think always make sure that. Yeah, look, I I'm I'm with Tommy there, just the number of calls you're making is great. Connect, sorry. That's that's great. So can't fold you there. I think it's playing the long game, and I think it's a bit like you might be digging for diamonds here, you might be only a few shortwater stitches. If you're doing with no commission breath, that many call connections, and you've got a great social media presence, and you're terrific guys that get great results, it's gonna happen. You just might just have to keep going. You might be that close to it, might be a few more, you know, sort of troubles. So I think I think it's it's good. I really it's interesting because I didn't know you'd be here today, but I watched something you did two or three nights ago. I thought it was outstanding. There was informative, educational, and I sort of watched it from go to low. And I thought that was really good marketing in myself. So I think that's good. Just crop questions. A lot of agents they jump on calls, they say, Oh, I'm making, you know, 50 connects, 100 connects, 150 connects. And if you would listen to them, it sounds like a call setter out of Malaysia or out of, you know, sort of India or something. It's just like bang, bang, bang, bang, bang, bang, bang. And people pick up on that. And sometimes they've even got a colleague near them doing the same, which you can hear in the background, which just exaggerates it even more so. So I just sit down, I I even trial less calls, better conversations, longer. You know, uh, it's not right for you at the moment, Jace, just because I'm gonna be around for a long, long time. Is there anything in your mind that you would see in the future for you that would be a catalyst to have you think about selling? Whether it reached a certain price or another, well, you know, we're talking about it. I'm 61, I'm thinking of retiring at 65, or probably cash up then. Okay, well, let's let's drop that down, unless sort of we know that for follow-up. We can call them ten times within the next four years and just check in on them. Start sending them information. People don't generally want or need more information. They want more relevant information, yeah. Relevant to them. So if I'm a retail shop owner in a in a strip shopping mall, send me stuff about retail homes in don't send me stuff about Chatswood office space. So I think just make sure that the conversations, the data, which is why, and this is for Resi agents too, in your agent box equivalent, your CRM, make sure you don't just get name, phone number, email address, they're the obvious basics. You put their home address and you characterize the type of property they have. So then when a luxury home sells in their area, you send them information on a luxury home sale. I could think of nothing more infuriating if I've got a penthouse apartment, someone's sending you stuff about a semi that's sold up the street. It's just spam. I start deleting or unsubscribing. So I think curation, better quality conversations, um, always thinking about them. We had Glen Mills on our webinar morning at nine o'clock.

Tom Panos 38:07

The guy that won the award.

John McGrath 38:08

Yeah, he won one of our awards. And he just said that half the time I'm saying to them, I don't think you should be selling. Invite him in to sell, and he's looking at it and he's thinking, I don't think for what they want to achieve, this is the best or most opportune time. And he said, I spend probably, you know, 25% of my time in Loundry was talking to someone out of listing, not into listing. And that's what the exact opposite of commission, Brett. That's when someone really gives a damn about you, and you never forget that. And it may not get you the listing today, but it might get you 10 listings over the next decade. So I reckon you've you're you're doing all the right stuff, just play the long game and just have you know, keep having curated conversations.

Tom Panos 38:48

I got a question here. Okay. Guys, we've got three minutes. We're gonna have a is it 11 o'clock or 1045? 1045's around. Right. Okay, team, we're gonna have a break in about two, three minutes. I just want to finish off with one because I know it's come up in different variations. Christy

Listing Scripts For Price Alignment

Tom Panos 39:09

that Christy's asked it, but so have a lot of other people. Can we have some dialogue to use in listing presentations regarding the changing market and conditions and any dialogue in your price alignment conversations once the property's been listed, right? So maybe let's start off with at a listing presentation. I sent essentially what this is how do you handle price at a listing presentation? Christy, are you in the room? Yes, there we are. Christy.

John McGrath 39:37

You did tell us an example and a question. Christy at a listing that that you're the vendor.

Kristie Davies 39:42

Yeah, so just some examples on what you use with vendors. As we know, like uh prices have dropped with 10%. So just dialogue to use with them to still get the listing, if that makes sense. Just talking and pre-processing.

John McGrath 39:54

So they know the prices that come back?

Kristie Davies 39:56

Yeah, but just getting them to align with that.

John McGrath 39:59

Yes. Um so first thing I want to know why you're selling it. Christy, what's your about? What's what's the purpose of selling? What are you trying to achieve?

Kristie Davies 40:06

Downsizing.

John McGrath 40:07

Okay, and in what area you live to?

Kristie Davies 40:10

Up the road about an hour away.

John McGrath 40:12

Okay. And how are you feeling about Harumapa? Where's your confusion? Just give me a seat today.

Kristie Davies 40:19

Price.

John McGrath 40:20

Yep. You're going? Tell me about what are you feeling about price?

Kristie Davies 40:23

Um I'm expecting more than what the current market is. I think my house is worth one butt three.

John McGrath 40:29

Yeah, we look, we all wouldn't, and I understand the the uh expectation or a desire, if you will. But the market's very efficient, Christy. Everyone has access to all the same data, and the buyers actually know the prices better than you and I. Why? I'm a local expert, guess, and you'll probably either, but you know, you've got a vested interest to some degree sell buy, and obviously a range of properties. They're looking in one price range of one sale of property, and they know every inch of this area. So we've got to start in the fact that does it make it work for you with your forward plans at fair market value? And let's say fair market value today, based on recent comparables, might be 1.2. Correct. Now, that doesn't mean I'm stopping there, by the way, Christy, because I actually have a really straw track record of getting above market value and getting great prices. And that's my desire when I work with you. You and I work together, and we're going to do everything we can to maximize that price. But what I want to know is a fallback position. If the market, the efficient market says it's worth one two, can you make that work for you down the track? So then you had that conversation. And if Christy says, no, I'm moving out of here less than $1,350. I might have a conversation that says, Yeah, might be might you may want to rethink the timing for you.

Kristie Davies 41:43

Okay.

John McGrath 41:43

So I think you just talk about, you know, the market's efficiency. Well, it is very efficient. You can anyone can get access to REA, domain, half the world's on RB data. Uh, they've been to auctions, they know the value. And yeah, so why is a buyer going to pay an extra $150,000 for yours? Not I'm not saying this, I'm out of role play, but why why would a buyer pay $150,000 because you want it? I'll pay what's worth. It's like, you know, you go to BHP, look at the shares, the shares are $76, but you're a seller, you want $90. Well, it can happen. The markets are $76. So I think, you know, and not all of that, obviously it was role play, but the initial part was, you know, the market's efficient. Recent sales would say that buyers are going to see value on yours around one, two. Doesn't mean that's all we can get, because I have a really, you know, I've got some magical powers that can often get the high, well, certainly always get the high possible price, whatever that may be. So you don't want to take their hope away from because they want to hire someone that's going to get better than the rest.

Kristie Davies 42:46

Yeah.

John McGrath 42:46

And if all you're doing is guaranteeing them you won't get better than the rest, you'll get fair market value. There's no hope. Now, as you go along, based on feedback from the market, it may well be that one two's where it's at. Like, even with your great, you know, secret sauce and herbs and spicy you had, it's still 1.2. Well, that's the conversation we're going to have. It could be you get full buyers interested and you end up in $1.225 or $1,250, and that's a little bit less than they wanted, but it's a really good price. So I think that's the pricing bit. Don't get caught in a debate on price because you lose. So when they say, look, I'd really like $1.3, I say, I understand. That would be a great outcome. Let's talk about the process that gives us the best chance to get the highest possible price. So you can see, like, just to avert it, like a mortar coming down a hill. Just go straight around it. I'm not going to say here, butt no, that'd be silly, you can't get it. So I think you you have that conversation, and then the market will educate you and the owner as you go forward as to where it sits. And most of us have been in real estate enough time to know we actually don't know what it's worth, including us. We have an estimate. We know what a neighbor that looks similar went for three weeks ago, slightly different market. That buyer's now gone. I don't know if the underbid is gone, but that sort of stuff. But you do have to have confidence. We missed a listing recently to an agent that is a very good agent. It doesn't work with us. You beat one of our good agents and our sales manager made a call to the vendor just to thank them and see if there's anything we could learn and you know and they said, you know, both were great. It was like a so close. And he said, Could I just ask why you you chose that eight? You know, she said he gave me immense confidence. Not about price, but he said, you know, ho Tom, I've sold 12 homes very similar to yours in the last two months. I will almost guarantee you today I'm talking on a daily basis to your buyer. So it took away the fear that no one's gonna be interested in my home. It gave this credibility that you've got a track record, um, you you've you've done the sales and you talk with the buyers. And she said, I just had this immense confidence that he was gonna be able to deliver. Now, whether he does or doesn't, time will tell. But you have to give people confidence in your ability and your process, it will be the best price, whatever that is. That'd be what I'm just saying.

When To Walk Away From Listings

Tom Panos 45:04

100%. Christy, in it uh go on.

Speaker 6 45:06

Yeah, I was gonna ask, I was interested in your comment. If you're you know in not ready to look at one boy or two, maybe you should consider different timing. Is that a reverse psychology play, or are you genuinely able or intending to walk away from those parts of listings? Because I find it really hard to walk away from any listing. I sort of want to get them all regardless.

John McGrath 45:25

Great question. So I always look at the underlying motivation. If someone's bought another property and they got a sell, I kind of don't listen too much to what they're saying. I know they're a seller. If someone's tried three times to sell before and they keep withdrawing it and they've got no real motivation, it's it's a waste of your time and mine. And so I'm gonna be respectful to them and not gonna say it's a waste of my time. I'm just gonna say I don't want to waste your time. That, you know, if if I don't believe, if there's an agent that really believes that one three is above it. But you've also got to remember one three, if someone says it, probably means 1250 or 1225. Vendors are out there and and there's some something in their DNA that they're trying to convince us that if they keep saying one three, it's gonna magically here that is, we'll believe it, and then we'll get the buyers to believe it, and then everyone's happy. Um, so there's a bit of it that I ignore, you know, sort of privately. If if someone's got underlying motivation and they have a higher expectation and they're prepared to put money into marketing and to put a board out the front and do a proper campaign, I'm probably going to be a bit more flexible that if someone says I want off market, I'm only going to pay you 1% commission and all of the things, it's just too hard. Too hard.

Tom Panos 46:35

Yeah, Christy, every vendor in that kind of category, I reckon I listen to agents that I listen to in the gym that are good, they do what John said, they do give hope, right? If that person wants some hope, but these are the kind of words that they seem to use. I'm letting you know the comparable sales of the last three weeks are telling me it's under that number. And you go through them. However, I'm letting you know if there's one three or even one three fifty or one four out there, which does happen, and we see it every weekend. We get prices wrong all the time. I'll be getting it. And I want to let you know the first part of my job is to go out into the market to try and find a buyer that has the same view of value as what you do. At the same time, I'm going to have to balance moving from the sweet zone when you launch to the style zone if no one's looking at it. We don't need to address that now. But my main job is I'm a house price maximizer. I'm not a registered valuer. My job is to get you the highest price. And in some way, you tiptoe over the issue because, as I said yesterday, if you look at any field, pick medicine. Medicine doesn't give you a price when you go see the doctor. Medicine goes and says you're going to go do a PET scan, a CAT scan, you're going to get some bloods, we're going to do a few tests, and at the end of the three weeks, we're going to know the answer. And in real estate, what's the test? It's the

Final Takeaways And Wrap

Tom Panos 48:10

open homes, it's the marketing, it's the buyer feedback, it's the phone calls, and you're only really going to know the answer after you've gone through those tests, right? And if you can somehow articulate it, I'm very mindful of time. We are actually over.