The MOST Important Factor When Selling Property (It’s Not Price) | FUNdamental Fridays

We desperately want to buy it. It's the best one we've seen. There's no good stuff up. The execution or the purchase of the property. If you have the prettiest home on the prettiest street in none of them will buy it. If you have home, don't close the deal. He is not your cake. It is your cream. And I have that. And that's the hit up. That's the hit up. I can't be talked off of it. Hey, couches, it's the end of another working week. That's right. It's Friday and in Friday. We talk about money stuff. We don't talk about it. And I'm delighted to be joined by one of our couch crew Shane Pope and mate. We're wearing our real estate hat today on as we talk about dying on a hill. So, I'm welcome to the show. Thank you for having me. Let's get the couches to learn more about you. Tell us about your backstory. 10 plus years, I think, now in real estate fully licensed. A long time on the selling side. Recently to the buying side, always an advocate. So, I found from my position whether it was getting home ready for market or looking for them to purchase for families, it was just about educating them on that side of the purchase. Well, I think life is about education and guiding. So, I think we're in the right house here. For that conversation, so mate, I've got to go straight to it. What is the hill that you will die on when it comes to real estate? The hill that I will die on is that you will real estate agent. And they will show the transaction. The real estate agent is the most important piece of your puzzle. It's not your price. Right, it's not your marketing. Right. If you don't get the right agent, nothing happens in your favour. And as a buyer's advocate, I love taking advantage of that. Okay, so let's unpack that. Why is it that you think the quality of the agent is the most important? It's probably two factors for me. The figures last time I checked was somewhere around 70% of the real estate forced that represents people to sell, is in their first or their last year. So that's a very small pool of people who are successful over a long period of time. And if you get the price right and lots of people come, and the marketing is beautiful and the home is lovely, and the agent is like talking to a wet paper bag, no one's going to want to do that deal. We literally see it. The space that we buy in principal place of residence, people have to have a feel for that home. Investment is a different thing, and I help principal place of residence purchases. So if the agent is no good, your campaign is no good. They are the people that greet the buyers. And so tell me then how can the no good agent stuff up the execution or the purchase of the property? It can be lack of quality feedback to the vendor, to position them for a deal. It can be lack of a follow-up for a buyer to see if they're still hot on a deal. There's lots of things that fall down if the agent's not set up for it or educated in to help that deal get done. And you just mentioned before, obviously as someone who works on the buyer's agency side, you're in a situation now where when you find a good agent, what's usually the communication like when finding a good agent versus then working with an agent who isn't apprentice or not quite there or not at the top of their game? I've got a case study yet that happened in the last week, which I can talk to you about. But anecdotally, the agent that is good will follow me up and tell me what's going on with the campaign. And an agent who is not, I will manage them and I will help get that feedback to the vendor about where we're at. So recently bought a home north of the city, quite a large home, just over $2.5 million worth. And we spec the value on that home with comprables and land size and features of the home at around about $3 million. And there was significant data available to us that homes of that size in land and dwelling should sell for around $3 million. And over the course of five months, we were able to secure a deal at $2.65 million. This was over the last week or so. And the reason we put that deal together and waited so long was I found out through a good agent who contacted me knowing that I was looking at it. He said, I know you haven't bought it yet. I'm getting the listing on Wednesday. And the first thing I went back to the purchaser and said was excellent that he told us he will be telling every single other person with $3 million that he's going to sell that house. So we bought it for $2.65 under pressure and giraeces over the course of a weekend. Yeah. And so obviously, you know, that's the craft of keeping high communication in play. What sort of frequency of communication should you expect from a very strong, you know, operating agent? If you're on the selling side, I would think if you're, you should be on the phone in some way, phone or text, at least four times a week. Right. You'll have pre and post open. Yep. You'll have your Monday follow-up after reports and Wednesday to touch base. That is the bare minimum of a high performing agent. Depending on their stock levels and what kind of team they have, that can be three times. It could also be eight. Yep. And so I mean, and obviously not every deal falls that way in terms of, you know, at the end of the day, you know, the good properties that you're trying to buy for an owner occupy. They've got an emotional attachment to the purchase. Yes. That don't necessarily. It's not just a transaction. It's got to meet their brief. So you're not always getting them under what might be the budget. So take us through a situation where that might be the case where you're under competition. What are some of the things that you're looking to do to allow for that conversation to go in the direction that you want it to go in and hopefully give you the best chance of buying the property? If we identify on a brief from the purchasing side that an owner wants to buy the home, numbers will only take us so far. One of the key things that I articulate to my clients is that it is very difficult to overpay for something that you value. This is not an investment that's going to have a capital growth return that's halved by CGT. It doesn't have a yielding aspect that has to serve as debt on a loan. You get benefit of use. You will be able to watch your children play from the kitchen into this backyard because of the way it's laid out on the block. It's the only three bedroom home in the area that you like. Therefore, the value to you might be higher than everybody else's. And under a competitive purchasing environment, the best deal that you can get as the purchaser is to buy the home. The DD still needs to be done. So the due diligence around comparable and meeting the brief. Yes. As part of that. But once you're there, then it is about, okay, well, it's that story of, you know, you've been looking for so long. How long is this going to take? It's almost watched the stretch price in the event that we miss out on that because how long do these particular briefs occur? Which is probably another good question for you around that in terms of from your experience on the owner occupied by his agency side. You know, some briefs can take a short period of time to find the right asset. Some briefs can take a long period of time. Is there any sort of discussions that are happening around client expectations? Or is that? Yeah. Particularly around their budget. So when people are looking for a home with us on a brief, one thing that gets locked in early with their financial team that they're working with will be how much they can spend. And if their brief is commute time to work, commute time to school, commute time to, you know, grandma and grandpa's house, if they don't buy an asset quick enough, those commute times are generally the things that suffer because they won't as homes get more expensive. So I'm prepared to get two bedrooms, not three. Yeah. But then they'll have to start moving where they're looking further away. So those conversations happen as as as. It's the classic wise decision quadrant in terms of I love the here's the here's the price I've got. This is basically the asset type that I can buy the land and the quality. All those things are coming into play. But to your point, if you want to stay in that location, that's usually where the price presser is because you're going to have to compromise. Yeah. Tensionally on the type of property. But if you've got kids and you're trying to compromise, well, that's not really a compromise. If you hear you need three bedrooms, we need four bedrooms. You can't put two bathrooms in the one bedroom. Yes. I mean, you can. Yeah, but not long term. You can, but not when your goals are for. Yeah. That's a big thing to act to act. We're going to go, okay, well, the kids can be shoved into one room. Yeah. And we'll deal with that for the next 12 years or we'll drive 12 minutes further every day. Yeah. Those directions for the next 12 years. Sometimes speed to act is your best friend. All right. So let's go back to the point you were saying around on it. Sure. You're talking about the quality of the operator. Yes. In terms of the work that they do. And it's no different. I mean, even in, you know, GPs and specialists, you can still get a different varying of quality of operator. You know, and you did talk about communication as being one of their key points. What's something else that I should be looking for that clearly allows me to separate that these guys are in the top percentage of how they operate versus what's called a Joe average. I think the Joe average term applies to a lot of the respectfully, a lot of the new people that come into an industry and they're full of enthusiasm and give me a chance. And unfortunately, that's where everybody starts. But that is not where I would typically recommend for someone to put their million plus asset in an ideal largely in Melbourne, but it's not where I'd be putting it. It's someone who can come in and go in the last market we did this. In 2017, we had this campaign. My team's been with me for four years and they can show you proof of all the things they've done in and around your area. The biggest and the best are that for a reason. It's very hard to compete with at scale. Well, I know the counterbalance, so that is if I am new, I bring higher energy. I've got less clients to look after. So they're going to be pitching their story around what's their beer. Now, but if they also can bring to the table, if I can add my two bobs in this in terms of my experience in being a buyer's agent on that side as well, unprepared to die on this hill. Yeah, well, here's the story, right? They ultimately, if they have also done their product research, like, you know, so if You've got young energy and you've got a particular I'm just going to look at you, but you just know your market like a pro. That's going to lift your chances of potentially competing with that person, right? Absolutely. And always to that. And the reason I don't on this hill is if your young energy comes in with enthusiasm and you have all of the research, you still get in cell 70 homes in that area last year with 53 underbenders. And I have that as the experience. And that's where your extra value comes in. Right. And that's the hill you're going. I can't be talked of it. Well, OK, let's talk about though pricing and marketing strategy. Yes. Tell me what, you know, how does that blend in with the skill of the operator in terms of it? So you're putting your selling hat on again, talk to me about what my marketing strategy should be and what my selling pricing strategy should be. In a sound bite, you can never spend too much on marketing. It is impossible to overspend exposing your product to a market. You can't sell a secret classic story. Absolutely. You can undermarket something. Absolutely. You can save $2,000 on this part of the campaign. You can save $500 by not doing a video. But given what we know about the demographics of purchases and that some reads, some need photos, some need floor plans, some need video, some need time, do all of it. It's an absolute scattergun approach with marketing. Just do all of it all at once. And then the right buyer will get to the right bit. So marketing for me as you can't overspend, marketing is probably secondary to price. If you have the prettiest home on the prettiest street and you get all the purchase and they all think it's $200,000 over price, none of them will buy it. No matter how good. No matter how good it is. Marketing is not your cake. It is your cream. You have to price it properly. And then once you've priced it properly, you can advertise it properly. And once you've done that and all the buyers turn up, if you have the right agent, they'll close the deal. So let's talk to that. When you find a property that doesn't have the right agent, who is Joe Average. Love that. How are you playing to your strengths in terms of now you're on the buyer's agency on a rock-upide side? What are you doing in terms of making sure the deal falls your way? Do what a really good agent does on the selling side. I communicate with them regularly. I tell them we are at what we're doing. I give them all the feedback that they need to give in a professional language. Of course. So, about where we're at and one thing that I will always do, probably more than I talk to them is ask them. How's campaign going? Has the vendor taken any other offers yet? Just normal, simple questions, but pepper them with it. One of my things that I like to do, particularly with Principal Place of Residence purchases, when I'm representing them, is tell the agent how much we actually love the property. Price is wrong. Price is wrong. And if I was wrong, you would sell it to someone else. And if they get no resistance from them at that point, the price will come down immediately. More than the cost of a B.A. for usually. Right, sage advice there you have it. That's why Shane is one of our couch crew and we're looking forward to seeing you on main couch in upcoming episodes of the property couch. And that wraps up for another week. So just always remember Shane as you will want to know. Yes. Knowledge is empowering, but only if you use it. And if you act on it, by for now.