Episode 92 | How to bring your "A-game" to any auction & win | Phil de Fegely, Auctioneer/Coach

Where to stand, what to wear & how to get the competition off your back

We interview auctioneer Phil de Fegely. Phil coaches many other successful auctioneers & he works with well known agency groups such as McGrath, Buxton, Jellis Craig, to name a few.

If you’re looking to buy a property, you will no doubt be dealing with an auctioneer at some point, so here’s the inside scoop on:

• How do good auctioneers influence buyers to bid?

• What type of bidding wins the auction?

• How do you know when the property is ‘on the market’?

• Why bringing your whole family to auction is likely to make you miss out.

• Strategy, predictability & other things to confuse the auctioneer.

• What is “Auction strategy” - what are agents trying to achieve?

• What are the three things you need to know about the reserve price?

It’s a great episode, get in touch & let us know what you think.

WEBSITE LINKS:
Australian Property Investment Show - Free Ticket Link
Simon Russell, Behavioural Scientist - Episode 1
Damien Cooley, Auctioneer - Episode 2
Tim Heavyside, Auctioneer - Episode 36

GUEST WEBSITES:
Phil de Fegely - Auctioneer/Coach

Work with Veronica? info@gooddeeds.com.au
Work with Chris? hello@wealthful.com.au

EPISODE TRANSCRIPT:

Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…

This episode was recorded on 11th September, 2019.

Veronica: You're listening to the Elephant in the Room Property Podcast where the big things that never get talked about actually get talked about. I'm Veronica Morgan, real estate agent buyer's agent, cohost of Foxtel's Location, Location, Location, Australia and author of a new book “Auction Ready How to buy property even though you're scared shitless" .

Chris: and I'm Chris Bates, financial planner, mortgage broker, and together we're going to uncover who's really making the decisions when you buy a property.

Veronica: Don't forget that you can access the transcript for this episode on the website as well as download our free food or forecast report. Which experts can you trust to get it right, www.theelephantintheroom.com.au

Chris: please stick around for this week's elephant rider bootcamp and we have a cracking done by the week coming up.

Chris: Before we get started. Everything we talk about on this podcast is generally nature and should never be considered to be personal financial advice. If you're looking to get advice, please seek the help of a licensed financial advisor or buyers agent. They will tailor and document their advice to your personal circumstances. Now let's get cracking.

Veronica: How many of you have listened to our very first podcast episode, if you haven't urge you to go back there after listening to this one. Why? Because it contains a foundation of everything we talk about in this podcast, the behavioral biases that influence our decision making. Most of it completely unconsciously. In episode 1 we interview behavioral finance expert Simon Russell following his analysis of an auction conducted by Melbourne agent Tim Heavyside. And then we interviewed Tim in Episode 36 and discovered how he conscientiously refines his skills and works with mentors such as today's guest. It's no accident that Simon was able to observe so many instances of how effectively Tim influenced the audience at that auction. So in this episode we have the pleasure of quizzing Tim's, coach, Phil De Fegely. Phil is an auctioneer in his own right. Having originally started in the furniture and car game before moving to real estate a couple of decades ago, it's not only Tim he coaches, but many other successful auctioneers and he works with well-known agency groups such as McGrath, Buxton, Jellis Craig to name just a few. He's even coached the odd buyer's agent. And welcome Phil. We look forward to hearing more from you and gaining more insights into the influence of the auctioneer.

New Speaker: Thank you for Veronica. Thank you. Chris.

Phil: Lovely to be here.

Chris: Um, cars horses, you know, lots of different things and auctions, are they all the same? Do you use the same techniques or do you have to vary what you do?

Phil: Well auction by name but totally different by nature? Yeah. So car auction, uh, is so much faster. Uh, you're selling a lot every 45 to a 70 seconds, I suppose. That's how quickly it can move. So it's a lot quicker and the momentum is there and you need to have total rhythm. Whereas, so I, I started that, uh, selling that type in, in, in the mid eighties. And then in 1998 I, uh, decided to, uh, to move to real estate. And it was really like, it was like learning to write with your left hand, right? Totally different. So you had to go back and retrain and retrain, which we did.

Phil: And, and, and my first couple were, a bit ordinary must admit because we wanted to, uh, I wanted to get, get on with the job. When I first started, we had to do five minutes of introduction, then we had to do five minutes of description and I was lost. So, you know, now, now if I'm not into the bidding by three in three and a half minutes, I'm taking too long. Yeah. So thankfully we changed a lot of that and a lot of the lot of the things that we, uh, we used to do or thought we had to do, we got rid of. So it's changing. It is, but yes, it's essentially this year there's, um, there's a number of people who go from chattels to, to, to uh, real estate and I, and the, and in Sydney there's a lot of those that will, that will do plant and machinery during the week.

Phil: And then they'll go and do the real estate on the weekend going back. The other why is you find, and you often see it a charity auctions, you'll see a real estate auctioneer. Maybe they'll get up there and it's pretty slow and laborious. Yeah. So it's a different type of auction.

Chris: I mean, I guess if you limit the start, is that leaving a bit more meat for the real action and for you to take a bit longer there? I mean, is that the goal to really for most auctions to drag it out as long as possible?

Phil: Well, depends. Sometimes it's not. Sometimes you need to, depending on the situation, you need to, uh, we need to wrap this up. We need to take it offline or take it inside and then continue the negotiation in there. Sometimes they're just dragged on and on and that's, that's all about, that's all about feel.

Phil: That's all about assessing the audience and doing that. And that's what the work we've done with team and, and, and the others that we've done through and they're all, they're all really good at, you know, the master Watts jealous Craig is Hocking Stuart. They're, um, Nelson Alexander, they're all working along that time, that really analyzing the audience of where it's going and you, we put them through training programs and then they learn the basics, learn what to do. We give them a template, which they follow and they get out there in the marketplace. And then the more that they, they honing their skills and it's really watching that audience. It's so, it's, it's, it's really important.

Veronica: It's fascinating isn't it? Because, you know, I've been in many, many auctions as a buyer. I've never actually been an auctioneer. Um, and you're right, I mean, but then you've got all these individuals and collectively they create an audience and obviously that audience and the mood and that audience and reading that and how the auctioneer plays with that. I've been to auctions, we really bad auctioneer's you've not read a thing. And I've got, and those who are just seem amazing, like magicians. So what are some of the things that you teach? You're the auctioneers in your coaching, you know, to look for him it was the basics. What's one Oh one what's the thing that they learn,

Veronica: you know, from the com and they go, right, we've done my five minute intro, my preamble. Then I do the auction and I wrap it up. You know, what's the first thing that they need to start learning about the audience.

Phil: well first thing to learn is to be a, being comfortable about being uncomfortable. That's the first, that's the first thing we teach them and it look, it's going to be uncomfortable. So you get over that. So then alum and then stat. So basically we give them that. We give them the template of what to do so that we can eliminate a lot of the, of the issues that might happen so we can, so they know, right? They're into that. And then then it's about, it's really about asking the right questions and knowing what's happening in the campaign. So we, we, you don't just rock up and be unprepared. If you rock up there and just with no knowledge, you're going to be left. You're going to be left like a proverbial shag on a rock and.

Chris: Especially when you're starting to describe the area or describe the house and it's not really detailed enough or it's not really giving it something wrong about the area. Like is it the best part of, you know, so-and-so, they, everyone's going, no, it's not.

Phil: or you know, many, many years ago what I did at his and described it to a, it was a great restaurant and they'd been chef for two years, you know. So those, the sorts of things to be cognizant about. But yeah, you find that most of your audience know the area better than you do. Yes. That's what I mean. And you watch and what is everyone doing? What, what are the, what is the audience doing when the auctioneer is up there and, and, and pontificating about the area. What are they all doing? They really, they're looking at their phones or they are really not interested in as much as they think they spend all this time and they spend all, they pour over this and they feel as though it's all about that. It's not, it's not about them. It is. Yeah. So it's really about where we're moving towards is more storytelling is telling about why, what's it about? The, the, the description really should only go for about 90 seconds, but others like to think that, Oh no, no, no, we, I've, I've got a lot to give you. And the fallacy about ohh, look, I do it for the vendor. We'll have vendors inside them. Mint. What doesn't really care that they want you to say nice things about the home. Of course they do. That's they do, but they really, what they're more interested in is the result.

Veronica: Of course. And not only that, but it's, so the auction, he stands up and says a few things. They're not going to suddenly make somebody bead. Oh, I hadn't realized that. Okay. And, and they go through and now I'm not going to go through the property room by room. And then they promptly go through the property room by room and th they're all standing there with a brochure like this, this stand here with a brochure and everything is on the brochure. They're already yet. So it's just so tell us something new.

Veronica: So from the buyers point of view. That's a really good sign that the auction is not the sharpest tool in the shed.

Phil: Maybe, maybe not him. Maybe look it's about what I'm spending in the third first, first minute. What I'm trying to do is make eye contact with everyone in the audience and, and, and I do that when I'm presenting as well. Try as, as you saw that, I really try to make it get eye contact with as many people as I can in that first couple of minutes so you can engage. Yeah. And so then you can see what's happening in the audience and the audience are telling you telling me this stuff.

Chris: and how much is that? How much does the real estate agent prepping the auctioneer prior to the auction? Like do they know the full works on that by, you know, it's a couple, they're just about to have a baby and they'd been looking. Yeah, well you know, not all right. But you know what I mean? Like there's, you know, they're from the outer area, you know the budgets, you know.

Veronica: they missed out the last week. Yeah. These sort of things.

Phil: Some are fantastic, some are really, really good. Know that implicitly and others will say, Oh look, they, they keep their cards pretty close to their chest and then then that's when I start to worry. Yeah, you haven't asked enough questions. So the though that auto [inaudible] he's an airborne by, he's really good are the one, I'm going to watch him and I'm looking at you and your two comfortable and I'm thinking, yeah. And then I go afterwards, I go on and find that you didn't beat it. And I'll look and I'll say, well, what's it, are you not interested? Or have you got Veronica to bid for you. So I look at that and sometimes that's the case. So you've got to watch that. So it's a sort of, there's a, there's a couple of levels of comfortability that you're looking for. But I want, I don't want comfortability. I want to see people that are edgy and most people are, look, that's, you can't hide it.

Veronica: They got the whole entourage there, you know, mom, dad, grandparents.

Phil: And that's it. In a lot of the time. That's a big problem too, is you don't bring your family, right. Leave them at home. You know, kids, kids, if you're trying to buy a property, it's not the place for two year olds. You know, I've seen fathers and mothers that trying to bid and there is a squirming two year olds, Hey, I want an ice cream. You know, hang on, this is yes. And so, but that's a that you would see it happening all the time. They come along and just, Oh, let's rock along and see what we can do or we'll bring everyone else. Mm. And lots of opinions.

Veronica: It does give you a lot of, um, a lot of clues though to the auctioneer and the agent how committed they are properly.

Chris: Yeah. But a lot of the time they miss it. Yeah. It's a lot less distraction. Buyers, they change their personality, right? If they're not quite timid, they try to come across and you know, it's not the, doesn't really, not very authentic. Right. But out of all the auctions you've seen in property, which I'm sure you've seen in the many thousand, is there a certain type of personality that you think gets the best result in terms of, you know, effecting their competition in terms of winning over the agent know, is there some type of, you know, how you should rock up at an auction? What should you be the aggressive one? Should you be the more timid one, the more friendly one should you, or should you, does that not even matter?

Phil: Okay. Eight, if it's, if I'm okay if one O one O one of coaching bidders is, I always tell them to be bold. I always tell them to be bald, but they've gotta be authentic as to, so you, you, you, and uh, and I as of what I sent you, um, yesterday was, is basically it's a guide to say, ok. These are a few things that you need to do. You've got to make sure that you're dressed properly. Hmm. Don't rock up in your tracksuit. Just make as I, you look as though that you're coming. Now people will say all that doesn't care, because when you go to the plant and machinery auction, you'll find probably the worst dress people are the ones with all the money or they are. But that's another thing. But if you're trying to buy your first home buyer and you want to try and buy a home, make sure you're dressed for the part.

Phil: It's, it's, it gets, get yourself in a position where you can see everyone. Make sure you can dress part just in case domain are there, I guess. And you might be in the papers. It's just a mindset thing is getting your head in the right mindset thing. You feel good, you feel good. And people looking, Oh, I look smart. You know, it's just what other people are thinking. He's kept all, Hey, he must, he must be doing well. She must be doing well sheet, whatever it is. It's just a bit of a mind stand in a position where you can be seen by everywhere and make sure your body language is, is wrong. Mike Short unit, you're in a strong pose. That's what you need to do and make sure that with your vocals, that with your vocals that you, that you, that you're firm with what you do.

Speaker 2: Yeah, there are some exceptions to that, but gee, it really depends on what the situation is. So there and there, and there's sort of, so the, it's not, you can't really take a scone cutter approach, but if you're going for the first time and you've never done it before, that's what I recommend that you do. Wouldn't a guarantee that you buy not 100%, but it'll put you in the best position.

Phil: So the positioning thing, which is a good little segue there. Um, should you be where you can see all the bidders and you've got the oxygen, you're off to your side or should you be kind of at the back where you can see all the competition but they can't really see, you know?

Phil: No, you've got to, they've got to see you.

Phil: You want the competition to say so you kind of want to be close to the auctioneer but not under the nose either. Cause that sort of you, I've seen it in Veronica, you would have seen it where they go and you're the auctioneer, Chris and I'm standing in your space. All right. You know, and that that really people will look at that person. Yeah, yeah. Bit of that. Yeah. You really need just, and that just sort of people. Yeah. I just want to, I want to beat him or her. So there's a bit of that that goes on. So no, I always say see and be seen. So you want to be able to see everyone and so everyone can see you. Yeah. So I think that that's a, that's a better, a better, a, a better position to be rather than trying to be underneath it. Yeah.

Chris: And do you think a bit of familiarity with the eye, the Eigen and the auctioneer and, okay. Auctioneer by their first name, I don't think, I don't think it does any harm doesnt any harm. But again, a again, used appropriately if it's over done and then the authenticity so can, yeah, it's delicate. Yeah, he can. So, so it's really, it's uh, th and what I tell what I, what I tell to potential bidders is go and talk to the auctioneer. Go and talk to them. Yes. Y'all don't get to know them. GO and watch them go and watch them. And another option, don't go on, go and watch them if they've got one. If you're buying at 11 o'clock go and watch their 10 o'clock auction. Go and see how they do it. Introduce yourself. Don't sort of, you're not giving anything away. You're actually getting closer to the person and the person that you know. Aw, now I know you like your trust you, that sort of thing. We'll there they, Oh, okay.

Chris: How do you know the auctioneer then? Is it on the contract?

Phil: What are you going to ask? You can ask, you can ask all who will conduct the auction and the agency should know. If it's not the person standing in the door, they should know who's going to conduct the auction. Yeah. So the auctioneer Martin talked to you there, mightn't, that lends it so it mightn't work. But a lot of, most of them will. Yeah, most of them will.

Chris: Yes. It's probably seen you before as well.

Phil: Yeah, they seen you about,

Veronica: and it's a bit of a flip side thing though. I mean, you're absolutely right. They're getting comfortable with bidding at auction and quite, I'm absolutely amazed at the amount of people that bid and buy at their first ever auction that they attended. And it's like, wow, this is a big event and the odds are stacked against you being the winner. And I say the winner in the sense that, you know, they might've over paid, who knows or that maybe they shouldn't have bought her or whatever. Often they miss out because they don't know how to play or they haven't worked pout how to price, whatever. But to go to your first ever auction in being ever, uh, is quite astounding really. But then, you know, you talk about coaching bidders to be the first bidder and that's really in your best interest, isn't it?

Phil: Well, it can be, but I would, I, yeah, but I would say it's in their best interest too because you, you look at it and you, you go through the statistics and you find that so often, either the first or second bidder buys the property. Oh, often it does. And you can't influence an auction if you don't bid.

Veronica: 100%, you can't eat.

Phil: And so if you, so often we see it that that comp and put an confident competent that's starts the bidding and uh, eh, that will bod and the, what we've been through is we starting to see both in Melbourne and Sydney now, we're still starting to see more competition. Go back three months ago there was no competition. So if you bead, uh, there was a good chance that you'd buy. Yeah, because you'd be the only one. So then, then it got damned in negotiation. So you were in, a lot of people feel that, but don't feel that you're in control.

Veronica: This is a good one actually because it, and it does annoy me. Obviously I'm a buyer's agent, but I was a sales agent as well. I understand fully how both sides of the equation work and it doesn't normally bias say, well, I'm not going to bid against myself. And I'm like, yeah, except as actually if you're the only one there, it's a negotiation. It's not bidding. You know, it might be an auction, but the end of the day we're actually, yeah, yeah. You're getting to a price. It's not just because you make your low beating cause nobody else bids it. That means that the vendor should sell for that. Yeah. And there's this funny expectation that that that in an auction scenario that's okay, but if you're negotiating outside of an auction scenario, you would continue to negotiate. You will continue to do, it is bizarre.

Phil: We looked at the, the fee is last quarter of last year, the auction clearance rate in Melbourne and Sydney was around 45 to 48% on auction day. Yeah. But when we looked at a bit seven days post, it was that that had moved up to 60% yet type 14 days, you're up 75 to in some cases, 80% yep. Yep. Now in any market, that's a good market. That is a good market. It just wasn't happening on the day. So what was happening? Well, okay, there may have been adjustment in price. So I was getting to a level, but then, but that wasn't the only, they weren't just dealing with one buyer. A lot of cases they were dealing with a couple of buyers. So there was this double negotiation going on. Whereas if you go on in on Saturday on auction day and been the highest bidder, uh, you would have had it, you would have had a really good opportunity. So I, I think that the, but the, it's uh, it's a bit about social proof too.

Veronica: Massively.

Phil: Huge about social proof. So, Oh, what's wrong with it? What have I missed? What? Oh, why isn't anyone interested in, what am I the only one beating and why not? You know, what's going on here? What? Well, it's just your lucky day. The others haven't turned up. But I mean it's a bit of a,

Chris: if you've done, your due diligence isn't even got enough market knowledge. You know what it's worth. Cause you've, you know, I've done enough comparables. You really happy with the price. Should you really be that worried about the competition? That's why you shouldn't, you should just start off.

Veronica: That's the Elephant that.

Phil: you should, no, you shouldn't quit. No, you shouldn't. If you've, if you've done your work, done your due diligence, done all your research, no, you, you should go there to the auction thinking, I don't want anyone to beat Zack. I don't want anyone to beat. And look, I hear auctioneer's going, who's the brave one? Who's going first? Stop talking about being brave. Don't talk to me about gimmick. You don't need gimmicks. Oh yes, I see that. 

Veronica: You know what makes me laugh with that? It's like, Whoa, hold up a bottle of Verve. Yeah, sure. I'll beat off. Yeah, thanks. I'll take that. But they hold up a Grandan you that $15 crappy stuff sometimes they hold up the bottle of wine. I'm like, I definitely will not bid because I do not want that bottle of fine.

Phil: Well it was the bottles of wine. God, we've seen that. That's gone through with the huge it now. Now it's normally Veuve or Moet or whatever that's there. But I remember I went to one unfollow, went to his open for inspection. They had just at the auction, they had everything laid out and he had a bottle in the head. He's face on it. And I said, all right, so you give them a bottle of wine with your face. What's that like? Is it, Oh did I, Oh, I'm not sure. You know, we got up through, the boss got out and it was done and modifying and anyway, I said, so that's great. They're spending 1 million bucks and you're giving him a bottle of wine. It's no bloody good. And he's got your face on it. I think I would change that.

Phil: so yeah, it was very quick for that. But yeah, no, I'm not big on them. The gimmicks of the starting the bid, this should be enough incentive. And this is, this is something I've been talking about for the last 10 years, is about coaching bidders to get the opening the bid and the agents just don't do it. I go and I, I went to four auctions on the weekend and it was a 78% clearance right here. And I saw four pass ins and, there was two, there was two auctions that were beating and the beating was slow. And I just, I question how, what the agents had done with it, with the knowledge with the buyer's. And I think that is a, that is a big part that I'm really working with, with buyers and, everyone wants to keep their cards close to their chest, but do you know, OK, I hear that. But I think there's more to be gained by actually drilling and asking agents the right questions. Yeah. By asking buyers, asking the right question, what's that? So what's that? Who's interested? What have I got? What's the competition? Where are we at? As long as you know that, if you know your price range, you're fine. You're not giving anything away.

Veronica: Exactly. Right. The price range is so important to understand. Um, and in fact like, Oh, just chuck in there. I've got, I've got a free course on this, which is www.homebuyeracademy.com.au/freecourse on how to work out the price. You know, how to actually research and understand where that property sits in the market and help you set your maximum bid. Because if you go in with that and that full understanding, like you say, it doesn't really matter. All the other stuff is peripheral. The thing is though, when buyers ask agents questions, they don't always get straight answers. So I know when I was selling my straight answer, when anybody said to me how many contracts are out was four, didn't matter where they had one or 20, I'd always said for the reason for four was because, well a, it's a stupid question. Doesn't really matter. Um, at the end of the day, you know, if you want to buy the property, you have to go and get yourself organized. Um, but secondly, because four says, well, you're not the only idiot interested, but there's not so many people interested. I want to scare you off. That's pretty much it. It's a standard. It's a four and then giggle usually afterwards and say, and guess what, I will give you the exact same as, it doesn't matter what property you asked me that question four, I will tell you the same answer every single time. It doesn't matter, but there are questions that do matter. Right. But then won't necessarily always answer them, you know? So how, I mean, I guess, how do you coach your agents in that regard?

Phil: Well, it, it is. The thing is if I'm, I'm going to do an auction for you, Veronica, what? What I would ask you, I'd, I'd asked you, okay, what's your quote? Range where's your vendors thoughts on price and how many bidders it'd be gone in that quote range.

Veronica: And how many agents do you reckon can answer those three questions?

Phil: The good ones can, the good ones really know. They know. Then they'll know. They will give you by name of who they are and that's fantastic. Yeah, really good. No, exactly. And I'll, they'll actually give me the, probably that where they think their levels are, but that's how good they are. But then if I don't get those answers, I know that, well, I'm probably looking for or preparing for pass in. So that's really what I'm doing. So the, so my whole at what I'm doing is I want to control the outcome I want.

Phil: So I, what do I want people to walk away feeling? So even when I don't have a bit, yeah, I want them to go away feeling positive because I know that this will sell and this is good.

Veronica: And the agents have to deal with it afterwards and deal with it all good.

Phil: You know, you know, I know that what I've got to do, I know what I've got to say. I'm going to talk about, I've got to talk about that, the features and attributes. I've got to talk about the benefits. I've got to talk the value and talk about how it's and justify value. I've got to talk about the benefits to the buyer, why you should buy this, talk about and then talk about the benefits of beating because yeah, why you should bid and hold back. And then, uh, then I talk about that it will be sold. And it will be solved very soon. And we'll wrapped up in your intro. No, no, not at all. That's no, that's all in, no, that's in the bidding. That's all through the bidding.

Chris: And so when he gets to the pointy point at the point of point, right at the end drive and you know, you know it's going to go, this is the last couple of bids.

Phil: Okay. I want you to give me the scenario. Is it going to be knocked down. They're going to be sold.

Chris: Yeah. It's going to be, we were on the market sold on your market, you know, you're fat fighting it out. We just one other person, everyone else has kind of given up and it's just you and this one other person. You both, you feel like you've only got, you know, a couple of grand left each. Yes. I'm a beat in LMR. Yeah, we're both beating. Oh right. And we just want to, you know, you know that it's not going to go, you know, you're going to walk away with, you know, two grand more than what I would probably happy to spend. But we just kind of fighting it out at the end. It's like a bit of an arm wrestling it right at that end. What can the buyers do just to potentially win that fight and get the other person to kind of just back off and just go, I'm going to let this go without kind of just, you know, continuing just to continue to go. Like they must be sort of strategies that I can potentially do that just maybe makes that other person think that they're going to not win this. Okay,

Phil: So what, what can you do? Well, you got an, you've got to know where your end figure is. You've got an, you have know where that is the as, as I say, there's the seat three prices. You need to have a price. You'd love to pay the price you're happy to pay and a price. It'll really hurt. That'll hurt today. It'll hurt tomorrow, hurt next week, but I won't hit in three years time. Mm. Oh, I bet you've done that. You've really worked at what their price is. So you've then got to look at your opposition and who, who you are and that, that's a bit of a bit of a VIX question because if I've got a really aggressive bidder, well then I want to slow it down. Yeah. If I've got a, if I've got someone who's running out of gas, well then I want to jump up. Bang, bang, bang. Yeah. Was used to say you can't kill snakes anymore, but you know how to do that. Do that in, they're not allowed to do that. But we have a desire. You always hit your bank. He used to hit him three times. Yeah. Yeah. One to stun them, one wanting to kill him. The other one to just make sure that its dead, yeah, that was the, all that was don't do that anymore. No, because we're, we, we love, we love animals here. But in terms of, uh, doing that though, let's say I want to,

Phil: let's say you're the aggressive bidder and I want to slow it down. Hmm. How do I do that without making it feel like I don't want the property? Uh, when you go, you really just got to slow it down. I'll have trouble probably trying to piss you. Really?

Phil: Yeah. That's what I'm trying to do. Because you, you, you're, you're the, the, the alpha, you're the, you the aggressive and this is what you will get. What you want. Slow it. Absolutely slow it down. And how would you do that? Just to just take Matan years. My phone. Do that. That's what I'll take your time to make that beat. Yeah. Yeah. That's what I was really kind of. And then what? Pretend that you're thinking about it or just, well the thing is, the thing is, with what, what I would do is, is you'd be, you'd be, don't be predictable. That's the thing, because predictability is what I want. And most people don't know how to do that. Now it's predictable and what you're going to do, so what's are unpredictable things. You would just just mix it around, mix it around, don't you?

Phil: You'd be hard. Then you'd be the, then you'd bid slowly, then you'd beat. So just be, I'd mix it up. Odd numbers, odd numbers. That's, that's what, and not stupid. Not stupid. Not you. Sometimes. Sometimes you can do that.

Veronica: I love, I love doing this one. You, so it's like you think, Oh well I'm prepared to make a twin grand brood. Yep. But you know, I'm going to do it $13 then a seven. So I'll go before anyone has even bid back on top of me. He saw, okay, I'll give you 13 I ain't got a minute. No. Well make it $20 and it actually sounds like I've just got money to throw away as well, like as casual, relaxed, you know, so, but most people can't do that because it's their own money. I can do that because I know what my client's limit is and it's not my money.

Phil: And it's very difficult to do it for yourself really is, it's a bit like me would be me auctioning my property. Yeah. Which would, y.

Veronica: Would you.

Phil: NO.

Chris: And so let's say on the opposite, right? Cause I used, did she, she got you there. You major two personalities either you're the agreesive one and the more timid one, do you think? Yeah. Yeah. So let's say I'm the opposite. I am a bit more timid and.

New Speaker: You are probably timid, you probably unsure. Yeah. And you're unsure on what, so you've just got, I've got to, accentuated that you are unsure and I know what I'm doing and yeah, you are. They're just going to keep going. They just going to keep going. They've got plenty of money. They've got a lot more money. Oh we're nearly at their point. You would say that? No, no, they wouldn't but That's what they feeling and that's what they they're internalizing saying we are near, Oh look, maybe another thousand with another thousand, get it all, but they're going to go, they're going to keep going. They're going to keep going and.

Veronica: How do you as an auctioneer deal with that cause buyers do says that. Cause buyers do say that actually audibly say that. Um, how do you as an auctioneer tackle or recommend the interruption? He tackles lap. Did it, what was some of the thinking? You know,

Phil: I give them, I give them time and I'll give them encouragement and always encouragement that it's okay to change your mind. It's always in its okay. It's good. And knowing when and look and knowing when they're having, when they need that time and knowing and being able to fill that space that it's, that it's okay. And when you can pick that, that when they need that time just to think, to reassess.

Veronica: So then I moved to another point of the audience and so Damien Cooley talked about that in episode two we interviewed Damien and he was saying that at that point he often slows down. He's talking, he talks directly to them. So he keeps talking at them so they can't think.

Phil: Yeah well then use what I would yeah, that's, I tend to talk to another part of the audience but I'm actually talking to them, isn't there? They're overhearing that they're eavesdropping on another commerce. I'm working on a third party. So things that would be really, um, relevant to you, Chris. I'm actually, I'll make sure you're delivering that to Veronica. I never will ever. I know that you can work where I know that you can hear it.

Veronica: Well y'all be hearing it cause you're thinking, I want to hear what's being said to that buyer.

Phil: Yeah. You know there's some nature kicks in theory. Um, uh, so that's, that's the uh, so it's working with you and you just need that time and I know that you'll meet again. I know that you'll beat again. You just need that time. And so I want, I don't want to be too aggressive of I'm too aggressive with you or I could push you away.

Chris: So I think mean it's interesting. So lets say you, we don't and you don't get it right and it's not on the market and it's gonna get passed in. Um, but you're the top bidder and it's going to go behind the closed doors. Are you gonna go out the back and negotiate, you know that they want to sell it. Right? But you, you know, you want to buy it but your kind of feel like you won here because it's pasta and I didn't get what they wanted at that point in time.

Chris: Yeah. Probably, the buyer feels a little bit more confident. Right. If the seller is a bit deflated cause it's passed in. Hmm. What's the best kind of way to play that? Should you try and make a deal there and then while you're at the house, should you say, let's do this on the phone after. Do you think there's actually a best way to play that? Majority of the time.

Phil: Most of the time, yes. Do it. Try and do it there. Why? Because when you decide, when you decide to sell your property, the first thing you want to do is sell. The second thing it is for the highest amount that's in price the converse with you. When you decide to buy, you want to buy. Mm. And what do you want to do? You want to buy for the lowest price. So that comes to that situation. You, uh, if you can do it there and then it's they see it, they said the bird in the hand and that's it. And it's done most of the time it is. But there are other occasions where look your best, your best to your best to walk. But the problem is when you do walk, someone else can come in and that's that. You just have to be really, really sure and really know what's going on for you to you to walk. It's a dangerous thing to do and you don't have to walk though. You can potentially say, look, I'm gonna walk. Oh yeah, you can. Can you be when I'd say when you actually do, because I've seen plenty that have walked only they come back and say, well pay it and we said we've sold it to someone else.

Veronica: This is the, this is the issue with knowing what it's worth and what your walkaway prices and, and that painful price really shouldn't ever be paid on the unless it is under competition.

Phil: I don't know, competition, but if you've got the, I ask them to do the painful price because they know that if they, if they were under competition, they would have gone. I would have gone to there. I know when I've done the negotiation, I've sat there and we would, they would the bidder and we said, we're not going to go anymore. And I said, that's fine. That's fine. And that, look, I know that you would've come here with a, with a price, you would have paid under competition and I'm tipping that we are well below that. Mm. And they looked at me and said, well how did you know that? And I said, well I've been doing this for quite a while but we put, that is the thing because it's a foreign thing for a lot of people who been in negotiations. So said, come on, let's see what we can do to, to w w we need to, we need to have a little bit of movement.

Phil: We did with some flexibility here. We'll be able to, we'll, we'll be able to put a sold sign on, on the board and you'll be able to sign a contract and you will be able to, you know, get your Saturdays back as what all auctioneers.

Chris: What is the agents saying no on the other side on those cliches. As you can see on the other side though, like yeah, I can say that the agent is trying to work the bar to get up as high as possible, but behind the scenes on the other side of the door, the agent wants to get the deal done as well. Right. You know, they don't want to go back and put it back on the market and do another open and it looks like it passed in and got style. Yeah. What's the agent saying to the vendor or to kind of get them to make a deal at this point,

Phil: every agent should be trying to maximize the result. That's the, that's that's why you, that's why you paid. That's what you're there for. Your job is to maximize the result. As much as an auctioneer, that's my job is to maximize the result on the day and I make, no bones about that. That's what, that's what I'm there for. But occasionally, sometimes we, that expectations of vendors can sometimes be elevated. As I say, with a reserve price, three things we know about a reserve price. One, it's usually too high too. It's always a around. Number three, it'll always change. So I don't get too fixated on a, on a, on a price, especially around price. So what we're here to do is to try and get the best possible price. So we work with our, with our highest bidder, we work with them. And most of the time I like to say always had that I like to work with the highest bidder because they've done the right thing. They've won, they've, they've put themselves in there and a lot of the time they usually your best buyer. Yeah. Yeah. So if we let them go, then what are we going to do? What are we going to do? It would can be, yes. So we can say, so there's the situation is, but that's, that then goes back to being what's been said during the campaign and where's that,

Veronica: I want to lead that to a point because on your website, for instance, you say that auction is a strategy, not an event. And yes, I know what you mean by that. But how about you explain.

Phil: So as what, as a yes. And the, and, and the campaign formula, which has a, have a job distributed to a number of agents about and, and, and really what it it's about knowing, so what is, what is your house with, what is my house worth? Well, we've done our comparables. Yup. Okay. But they're not exactly the same. We're not selling coffee cups. We're not selling bottles of water, which are exactly, they're all the same as the one, they all have value. But there is, and there's, there's differences in it. And we know that that what was, what was selling in may is different to what's selling in June, or what's selling in September and what's gonna happen in October. Well, we know October was going to come, there's probably going to be a bit more stock in it. So you know, yeah. That there's a bit more competition. So what's it worth? What's it worth now if we have to sell? So we have to find out what it's worth. So it's running through that, running through that campaign. And so you have to make sure that you've had people view it. You've had to, and the beautiful thing about the internet now is we, we, we get all these people that view just by sitting in their lounge room now they're not wanting to, they're wanting to buy a cake.

Phil: They're wanting to buy a house. There were some people that just sear it serially, look at, look at the property, but most people, most of the people that go in there and that's why that, that, that, that the data that you get from REI and Domain I think is so valuable, so valuable and especially in that first week of the campaign if you're not using that as an agent will yeah. As what I caught about is benchmarking because we will know that for this type of house in this area, we should have X amount of views. We should have X amount of people coming through our open for inspection and we should have second inspections by X amount.

New Speaker: Does data show if your a serial viewer. I liked that IP addresses looked at it 15 times. I don't know if it goes into the, I don't think it does.

Veronica: I think they, I'm sure they do. They probably could. They could probably drill that. But whether,

Chris: Cause that'd be obviously be really interested in, right. You know, you've got 3000 views. We don't know whether, you know, 2000 of those are just people loving look at the property today. It could be, or it could be a thousand of them, you know, or 300 have looked at at six times then you know, that's obviously much. Yeah.

Phil: But if I, if I'm, if I'm selling a house in Wright's terrace in Pharan, it's little single fronted timber cottage where there that, you've got a lot of data on that because you know that, so you will know how many, how many views you will get. And it's a, it's a really good guide. Yeah. It's a really good God is to know what happened and then that can generate into, uh, inspections through the door. There is a correlation for the people that view it. Then how many people will then come and look.

Veronica: And so then if you're reviewing that data and you think, well, we're low on numbers, why is that? If I got over the price guide wrong is it, is there's something wrong in the description if I've actually, you know, usually the dollars. Yeah. Yeah. But just staying away from it.

Phil: Yeah. It's usually you can, you can, will, you can, you can fix the, maybe the inspection times were wrong. It might be, will you fix that? You might need to open it. You might need to have a Twilight one, you might need to change the look. It needs a photograph from the front or it needs this, the photo was in there. The stalling might be wrong. What a bit needs that. There's some things that you can change, but then what you really got to look at is look at the price.

Veronica: Yeah. We'll look at that is how people are price searching and that is, and and in an are the agents really, really pressing for that opinion of value from everyone who walks through the door? Yeah. So what do you think it's worth? What do you think is worth, sorry, I'm not interested. I'm just a neighbour, but well, I'm with me. You're a neighbor. What do you think it's worth? Oh, I think it's worth it. Oh yes, it might be worth a lot more than we need. Okay, so that's a neighbour, so then you've seen, he said, well, your neighbors all think it's at that, but they don't want to buy it. Yeah,

Chris: So The Elephant in the Room is 100% for you.

Veronica: The reason that Chris and I do this podcast is because we passionately believe that property buyers can do it better. We really want to help all of you understand all the risks, but also the ways in which you can avoid your elephant making the decisions.

Chris: But what we would love for you to do is just to share this episode and share other episodes with people around you that are going through the property process. Just by you sharing our episodes, you really helping.

Veronica: Give us a review on iTunes. 5 star please would be very appreciated because this is about making sure that we all benefit from the wonderful information that our guests have been sharing with us.

Chris: You obviously love the auctions and you love that people should take their property to auction, but do you believe everyone should use an auction to sell their house or like what percentage of people should sell their house under auction?

Phil: Well, I think that if always people say it's not an auction property. I think probably every, every property is an auction property. It's just the situation boxes on the hillside wall could be, could be maybe, but then I can, you need to do something different. You need to, you actually need to create something that's different. If you got, yeah, are in Docklands, are there, there's a hundred and, and whatever. The others, they're all the same, are all got this and this. Well you got to do something different because of that. What do you got to choose? Yeah, so maybe some sort of campaign might be different.

Phil: Might get people happening. It's just depending on the situation. And I remember going and doing a um, ah, a training session in Ballarat and there's auction donesn't work up here. It doesn't work and that doesn't happen. I said, Oh, well here's the situation. What about if you had a, a postwar home? Ah, um, deceased estate, what would you do with it? Oh, I would auction it. Right. Okay. Next door comes up. It's, it's exactly the same house, same condition, same price range. Ah, but the person just wants to move on. What would you do with our private sale? I said, so what do you mean? So it's whether you have an auction not as depending whether your vendor was alive or dead. Is that, is that the difference? And it was just a mindset. If it wasn't a mortgagee or it wasn't a decease to auction didn't work. Yeah. And that's bizarre. Same house. Same thing.

Chris: It wouldn't, you wouldn't, wouldn't you use an auction?

New Speaker: Of course you would. You would use an auction there. It would work, wouldn't you? Um, when wouldn't you use an auction is, um, it's a good question. If you, um, if you've got the, if you've got a property in a provincial area, where you've got a very small bar base. That might be a difficult thing to, to have premium properties.

Veronica: What about a house on a highway.

Phil: Yeah. Well that could be, yeah. But the, you know, there's a buyer for that. Yeah.

Phil: But there might only be one the mine, it might take six months to find them. It might be, but it might be you, it, it might be you, it might be your auction that I it more. Or it might be your, it might be, you've got to create an event. well, it'll get people through it and that's what you need. You need feedback. And look, there's plenty of, there's plenty of agents that we deal with that have, that. They have a full book of listings and especially these happens in, and you go to, you go to Western Australia, you go into Queensland, you go into sort of outer new South Wales and B, they've got a full book listings and not the problem. Everything. Listen, everything's double listed. It's open listed and they're on the, and the, and the, and they're on the market for, you know, I'm waiting for the right buyer. 870 days, you know, so. Well, what good does that. Yeah. Oh yeah. Look, I'll, I'll see if I get my price. Well. Okay, well you're not gonna really sell at that price, so you'll have to wait for four years.

Chris: So I mean, I've been looking at, we were looking at buy at the moment and um, it's interesting. So you know, there's quite a few properties that have been on there for six months, five months. They're nice properties, but there's something flawed about them. Um, but they're just sitting on the market so the vendor doesn't want to take it off. Real estate agent is probably pulling their hair out because they're like, well, this is just, you know, we're doing an open every week and yes, there's new buyers, but every time we get new buyers, I keep walking out the door.

Phil: Well why?

Chris: some of the floor with, let's say it's the light or the price price probably. Yeah, it's price. It's price related to features. Yeah. Yeah. And so what should these sellers do and what should you, let's say you do rock up and you do want to buy these pro and you think, you know what, I want to buy this probably, but I've looked on RP data and I've seen this on the market for 180 days. I actually think it's still good property. There's nothing flawed about it. I've seen the building and pest or whatever, but I want to buy it. If you made an offer cause you think it has been on the market for six months, so that's what everyone else is doing. That's why I said in the locker for six months, no one wants to make it over. That's what everyone does. No one wants to make an offer, make an offer.

Chris: Could you start a low?

Phil: Well I wouldn't start it. I wouldn't start at their price because there's obviously reasonable. I think there's probably you, you, you go and do your three prices and you work out what it is and then then go and say, look, there you are. Yeah. I get unconditional make, take every, every reason not to accept it away. Yep. Now we've just got to work on one thing. And that's probably the reason that situation is that the agent is not actually managing the vendor's expectations.

Veronica: You know, they've lost control and they just, we call them defender agents where they're trying to defend whatever they put on the property in the first place where they're trying to defend the vendor's unrealistic expectations and they're all defending each other and nothing's ever happening. And so therefore the buyer has to take control of that situation to actually get something happening. But most buyers don't. Like you say that at my coffers. So, but it's a really interesting psychological thing because nobody wants to be, they insult the vendor by offering what it's worth.

Chris: Yeah. It's interesting because these properties like I think they're three, $400,000 over what, you know, similar properties are selling for. Has the agent asked you what they think, what do you think it's worth?

Chris: Well, I was actually interested in the properties, but then they do, they they, you know, cause you go to the open, you give them your mobile number and then they call you and literally won't call me last night and there's no way it's ice. It's priced at say 2 million, right? Yep. It's probably worth one five to one six like it's that much above because it's a South facing block. It's a big block. The house isn't special, but the one across, you know, in a better side of the street or North facing backyard, nicer house. Sold at $1.55. Um, and so it's so far like beyond, but you just think why you even bother trying to sell this? You know what I mean? Like it's, it's you who's going to buy it cause it's just so overpriced.

Phil: Well, it, it needs to be, it, it, that feedback needs to be given to them all. They might because yeah, the, the, the, Oh, eyes don't make offers. They don't, people say, Oh, but no one's made an offer. Now we'll let one book is the process to help.

Veronica: The asking price is what what triggers a bottom line. You're far and amazingly enough, it gets in the realms of reality. Sometimes you can have two people fighting over it and get bought in.

Phil: They're asking and it does happen. It hasn't. We've seen seen that happen where there's been a, there's been asking price and then all that's all that's all for that. Well, I wouldn't want that all the buys, I would pay only five know that they would have taken that I would have paid that. So, and I talk about the, the philosophy of adjustment cause you, you need to keep adjusting the price you do because as I say to how often do you sell a property at the exact reserve price? And the answer is very rarely. Very rarely. It's either, it's either above or below. But it's really that price.

Veronica: So with that, because pricing is so critical. And so when I was a selling agent, you know, we are certainly understood that every property has its price and at the right price, every property will sell in, in the in the inner areas. I don't know about regional areas, but, um, and that's pricing their philosophy. So those properties have been sitting on the market. That's just because of the price, right? The problem isn't as a buyers agent, what I recognize is not every property is worth buying. Not every property is a good property. It doesn't matter what price that fundamentally there are good properties and bad properties and that to really simplify it, in my world, it's like, well, when I was a sales agent, when I went to an appraisal, I thought, man, this is a Cracker. This is going to off like a frog in a sock. What am I saying? Used to be? Um, then that is a sort of property that you really want to be buying because that's the sort of property that has lots of people interested in it and will get competition, et cetera, et cetera. It's growth is going to be greater than one that's a dog to sell, right? So that's fundamentally what I build a whole business around understanding those characteristics of those crackers, you know? But how much luck, so there's, there's the asset itself, the sort of property that, you know, we'll get competition. An idiot agent could sell it. And do well, you know, you have to be really bad to stuff up some of those campaigns. Um, and then you've got most property which isn't like that, you know, the majority of properties takes a lot of effort to get it right to get those buyers there to get the pricing right, to get the marketing right that the vendor in the right head space.

Veronica: And is it about what you talk about a strategy rather than an event. All of the things that are involved in doing that, whether it passes you don't or not, and then continues afterwards, the price they set it, at, you know, the conversations with that with buyers, et cetera, et cetera, et cetera. It's all part of the very, very big complicated, um, exercise. But there's still situations where there's luck involved, there's luck for the vendor, there's luck for the buyer. So can you give us some examples of how luck can play out in working with someone just turns up out of the blue and that often?

Phil: It happens until we had a situation where we were signing the contract and they said, can you hurry up? Because we've left a cake in the oven. We didn't expect to be going to went out for a walk and they ended up buying a property. So how good was that? So you get that sort of thing where that comes out of total life. Yeah. Yeah. Feel well now on the flip side, you get that we're, we you haven't read the campaign. You thought it was all going well. You thought that you had buyers and they were, and actually the buyers weren't it all our buyers but they weren't bidders is as I give me bidders, don't give me buyers. Yeah. Um, and do it when you go and question them after. Aw, look there. I've just worried about that. It's South at the back and that's it's this, you know, we sort of like it when others are there. So what you thought your head or you the, the, the thing was you used star by that your had on Fridays, bought on Thursday nights for the other buyer. Yeah. Yeah. Well it can be, that's the sort of thing that you've got two people. It'd be that, yes, I'm absolutely keen, keen, keen and then they see something else that they go and buy. Yeah. And that happens. So that's unfortunate fee of indoor because it was looking like it was a really, you know, you looked as though you had, you had four where if we had four then one bought, then one didn't turn up and the other person instead of having four, you've got one.

Speaker 2: So That is hard to manage.

Phil: That is hard to manage and managing those, managing those bars along, which is your does as well because the vendors expectations would have been you going to keep everything bubbling along. It's not easy. It's not easy. It sounds easy, but it's not easy. Yep.

Chris: Back to the, I'm in an auction when you know the property is not on the market. No. I feel like a lot of people are a bit hesitant to be, yeah. You know, they don't really want to fill. We know what's on the market. I'm not going to give them, put my best foot forward and I wonder why. How would you, how do you apply? Because I think that a lot of people would just say the high speed absolutely be the highest bidder, be the highest bidder. Would you be asking is it on the market? Cause that's the one question you say everyone asks. Nice, annoying question for every auctioneer, isn't it? I find that a really simple question. It's either yes or no. So it's a really easy question.

Veronica: How do you answer it? Like cause most won't a yes or no. Did you say yes or no?

Phil: Yes it is or no it's not. Does. Yeah, it's been on the market for four weeks. No, no. Yeah. Is it on the market? No, it's not. It's not on the market at the moment. Yeah. No, you have to keep reading. But who normally doesn't ask that question? He normally doesn't. And that gets asked every auction would you say? Yeah, no money normally who normally had an auction who normally doesn't ask the question? Is it on the market buyer's agent D tens T you'd hope not to anyways and holding the bid normally doesn't last it.

Veronica: That's a good point. Yeah. He guy. Okay. Yes.

Phil: Okay. So the person is, so Chris is holding the bead in. You asked me the question, Veronica, is it on the market? I'll say no it's not, but let me tell you, he's in the best position to buy the property. Would you like to do something about it? No. Better bid. I sell it to him. Would you like to buy it? Yeah. So I'd actually take it off. It's not any, it's not a difficult question to ask you though if you're bidding. Good question. And I've, and I've coached him, um, buyer's agents to say no doubt, always ask it cause you want it passed into you because you know that some people out they won't bid until it's on the market. So why bring in in more competition Yeah. Yeah. So the answer is that it's not always a straightforward answer really. Honestly. Why did people ask it?

Chris: Well, cause they want to buy it. Yeah, I think, I think they ask you because I think should. Yeah.

Phil: I don't know why that, it's a bit of a nothing question.

Veronica: It isn't nothing question, because I'll tell you what, if any extra age, if a buyer's agent asked her is what gets me. Because it's like, well, I can tell, I know why I know, whether it's on the market or not because I can see whether the agent's gone in and talked to the vendor. I can see by their, the auctioneer and the cadence and in the way you speak, that gives it away. There's a lot of, it does, there's a lot of signs. Oh, if they'd done the one, two, three a couple of times and you know, then if they haven't done the one, two, three and bluffed people a couple of times, then probably it's not on the market yet. You know what I mean? There's all these sort of little signs.

Chris: Well, that happened, did an auction on the weekend. So I was there and it's, um, I'm sitting there waiting and this guy, you know, a young couple and um, yeah, he thought he was going to buy it and hadn't, hadn't even gone to the vendor yet. And so he's going once, going twice. Um, and then these are the couple that, the older couple, I thought they were going to buy it. They, they kind of said no. And then this guys like they're getting all excited and then he's like, all right, I'm going to go in and speak to the vendor.

Veronica: So someone who's never been to an auction before.

Chris: and they went inside and talked to the vendor and then it was interesting watching me or the agent, he kind of walked out and said, look guys, we're going to have to pass the see him. We were not what the other vendor wants and just wrapped up the auction like I thought he could've gone again, like to two dragging some more buyers, but it all kind of ended really fast. Yeah, but you gotta remember, they know how many are registered in new South Wales.

Veronica: So there's no one there to drag in, then they're not going to drag it out. Whereas in Victoria you don't actually have registration. So it's a little bit less certainty around who actually can bead, you know. So that's might, you might do something differently down here, right?

Phil: Yeah. You do, but I would, I would suggest that they should do something a little differently in new South Wales, a guy and that you're rocking, you're being too predictable. Yeah. And then when it becomes predictable and it's easier for you to read, I would counsel them and and say that that's not, that's probably the best strategy. Um, you, you need to, yes, yes. You know, how many are registered but but the audience doesn't know exactly.

Veronica: Yes. Good point. Yeah.

Phil: So there's lots of these little things. It's about predictability. And I think sometimes our auctioneers are too predictable and they're too easy to read. And then, and then that what, that's what happens. Hmm.

Veronica: Actually this is so many buyers don't watch registrations. This actually astounds me in all these years, since registration 2003 it came in, in fact, September, 2003. So what's that? 16 years has been going? Um, I've only seen people, other people watch the registration once in that whole time. Other than a couple of odd, the odd buyer's agent, even buyer's agents don't do it. The only time I've seen somebody, it was a woman that looked to me and said, I read an article that you wrote that you should watch the registrations, she bought it. Not us. Yeah.

Phil: Well look, registrations they fought. Has it been Victoria fought it, look at it. It's a nonsense. We were, we were registering bidders in the 80s our auctions. So it's a nonsense. It can be easily done.

Veronica: some register cause I, I've been at the Gates if you like half an hour earlier and they can't give out the bidders card previously. So even if they pre-register, so a lot of agents like to preregister so they know we've got a line up. But basically even if you preregister you still have to rock up and get your card. So therefore every single person who's registered will go to the desk or the agent or whatever and pick up a card or register or both. Right. When you just ask them how many registrations, because they don't all tell you, they don't have to tell you and they won't.

Chris: So what do you do then?

Veronica: All right. Watch and count. And I watched the body language and I watch how many can we in with an entourage. And I watch, you know, how comfortable some people are, how many buyer's agents are there, all that stuff.

Chris: So then I stand near the person getting registered.

Veronica: Yeah. Get to them, you know, just they're in watch. I mean it's no big deal, but the simple fact is then I'm clocking every one so then I go on position, my cell phone, I know exactly who I'm watching. Um, so you know, it's, it's a fantastic tool for, for a better to to go and do that. Um, it's a gift.

Phil: But in my view that that is the thing that if I've got, if I've only got one potential bidder there, I don't mind telling them that they might be the only bidder. But I tell them as the importance that they need to beat because I can help them if they bid, if they don't bid on mine, not be able to help them. But if you want to buy it, Hey, it's your lucky day, you might, you might be able to, you might be able to too.

Phil: If you bid, you're the highest bidder, we'll, we'll pass it in to you and go and see if we can buy it for you.

Veronica: It's interesting. Because buyers, you know, they don't like to compete. So people will say, I don't like auctions, but at the same time they don't necessarily want to be the only person either.

Phil: Yeah. There's, it's, there's a, there's a, there's a contradiction there. Yeah. So they don't want to come. The last thing I want is competition, but then when I say there's no competition where I going to be and uh, and I've, and I, and I see that all the time. I see that all the time.

Veronica: Yeah. So, yeah, I'm an I agree. I think, you know, as a good auctioneer, you're a good agent. Both. Um, we'll have that conversation with the buyer. The problem is some buyers don't know how to deal with the information. No. So how do you deal with that?

Phil: Well, I, I tell them what to do and if they've, a lot of the time, a lot of them haven't been before or they've only done it a few times. And maybe you ask, yeah, we'll, you are professional and you are doing it all the time. But at the, at the REBA conference I've, I said rod or most of you've all a bit at auction and the head, but I will go to another conference and I'll say, and especially with auctioneers, I'll say, right, how many of you beat at an auction before? And you won't get the full room putting your hand up. And a, and I'll, and I'll, and I'll ask that. These are the auctioneer's tell me about it. What was it like a, it was pretty scary. I was, I was nervous. And you are, this is a bit of anticipation. Even when you're bidding for someone else, you've got a sense of responsibility because you're the professional and when you are bidding with your money you go, hey, it's my money. Yeah. So I, yeah, so I've got this, so you've got this, you got this and this or you have, you've got this churn so that you, you're edgy. So what, what people want as they want. And especially I want a bit, if I'm bidding, I want a bit of inside knowledge. I want to know what's going on. Hmm. I would say Chris right, who is my competition. Yeah. I'll go, who am I up against? Which ones? You might say that a guy like that and I'll look and say, nah, come on.

Chris: yeah, should I, should I even buy even try. I mean, you know, yes, you can get a bit of training, but you know, if you're buying smart that you're not trading property right? You're not buying, selling next year, you're buying a property living in 15-20 years or you're buying an investment property and you never selling it. Like that's really what the best investors really do. They buy quality and they hold it. So really they're only going to do things four, five, six times in their life. Yeah, it really is. It, should you even bother even learning about this stuff or should you just go and use a professional?

Phil: Well, it's is a bit, it's a bit like, um, you know, I've got a mortgage broker and then we that, that handles that. So I though I could go to the banks myself. Yeah. But it's time and it's effort and knowing what's going on and what, what, what's happening. So I get a professional to help me with that.

Chris: and you can always get a second opinion on that as well. Yeah. Should always get a second opinion on that.

Phil: I'll tell you him a mortgage broker is and you might say, Oh, rig-ht, okay. Um, but I do, I do agree with that. The second opinion is always worth it as well. It's always worthwhile. Um, but so it's the same with that. If you're looking, it is, if you're going to do it yourself, yeah. Get some skill yet to get the upskill and get the and, and, and know what you're doing.

Phil: If you don't, then go on and go on employ someone to do it because you will save time and you will at least as long as you do give them all the information. There's w was what you do with your mortgage broker and I don't know why. I don't know you. So why would you hide it from your buyer's agent? I'd, I've got no idea. But anyway, that's sort of, um, that's on our view. Yes. Are we prepared to go to go to $1.7 and then whether they, you still bleeding at $1.85 and all? Yeah. Well the mortgage broker said we could go to $2 million. Well, why didn't we have this conversation a month ago? You know, so

Chris: So have you seen professionals though, because our every professionals equal. So yeah, there's quite a lot of buyers advocates in Melbourne. Yeah. Agents in new South Wales, but advocates. Yes. Um, and I've met quite a few. Um, and some I would definitely have given, give, you know, my, um, absolutely my future to someone. Absolutely. Uh, but some, there's no way, you know, cause I don't think I would want that. Mean. Have you seen a lot of buyers, advocates stuff it up? Yeah. Yeah.

Phil: I wouldn't engage them. No. Yeah. Don't make sure you make sure you do your due diligence on your own. Your advice to the absolute. Yeah, absolutely. Cause there are, there are some that are um, uh, some that are exceptional and some that are missing. Yeah.

Chris: And so how would you, what sort of due diligence would you do in terms of the buyer's agents to know that they're the right buyers?

Phil: Well, I think that a third party reference is always a really good thing. Um, and of course they, most of them are pretty good at selling themselves as all agents are. So they will tell you their track record. So you want to see what their track record is, what they, what they've done with it, where they've done it, and then get their third party reference and, and check those references and see well, okay. How was the experience? Was it good?

Veronica: I think the problem with that is that the third parties may not necessarily know any better and they might've had a good outcome. Cause I think, well I've got the property but they're not thinking critically about that process or how they got the property.

Phil: And you know, I get asked, you know, well what's your success rate? And I'm like, well how do you measure success? Um, are you insinuating or suggesting that I need to say, Oh get 90% of every auction I bid at? Because if that was the truth, I'd be a bit worried. Because there are times when properties go way over what we believe is value or there are times when that's actually really poor property choice for you and you haven't really thought that through. You know what I mean? And so I call that success. You buy the right property at the right price. That's how I see success. Now I do have a metric for that, but I haven't even bothered counting whether I do or don't win an auction. Cause then what, what is winning? You know, winning at all costs is not winning.

Veronica: No, it's not. And I think that that, I think that really it fee for you guaging your successes. You've got, you've got clients that are prepared to come back and work with you again. So the repeat business, that's, that's, that's so that repeat references are really good yet I would always go back to Veronica. Yes. As you use it because the advice we get is right. Yeah. I'd always go back to Chris because that's what the advice is Right.

Veronica: And likewise with the sales agents, because you've got that situation and this is one thing that went through the market downturn. I really point out we do a bit of end of vendor efficacy in our business and, and really it's around the choice of agent is critical. Absolutely critical, particularly in a slow market. You know, because the, the you, you mentioned earlier that there are really, really good agents and they're all over it.

Veronica: And then there's really poor ones and it does separate, it's, it's the litmus test, if you like, and really does help separate the good from the bad. But often people don't, same deal. They get references from friends because they might've had luck at their auction and they might've got a good outcome, but it was nothing to do with good management. And so it's, it's always dangerous that, you know, references are fantastic and referrals and recommendations from friends, but you sorta even got to dig deeper into that to say, well, what, tell me more about your experience. Then you can make your mind up as to whether that's reliable with references.

Phil: and look at, and as we see this in seeing it for years, must be good auctioneer. He got a got 200 million, thousand dollars above reserve. Wow. Okay. That tells me he's on a very good valuer then. So, um, so that might be the in, so we're hearing this bragging all the time and really wouldn't see it as a, as I said, as the auctioneer, if, if we're making a cake, what I'm doing is putting the cherry on top. That's really the foundation of the campaign is all done. And I just make it look pretty. I bought the big cherry. Sometimes it's a big cherry, sometimes it is. And, and, um, the a hundreds and thousands.

Phil: So, um, as an auctioneer though, um, you know, you might be getting yourself ready for a Saturday or a Sunday. Sometimes in some areas, uh, or Wednesday night. And then on the Friday or the Thursday you get a call and go, we don't need you on Sunday. We sold it. Yeah. In the last week of the campaign. Your experience, um, and it's a good property. In your experience, what's caused that is the buyer and paid too much?

Speaker 2: It can be, look, it can be, it can be a number of things. It might be that it was only one. There was only one, one interested party. Maybe it may be the cause. Was that, uh, that the, um, that there was a potential buyer that, well, it wasn't going to, it wasn't going to be the, they're going to be out of the country and the just said, I'm not going to be here. I'm not anyone else to buy it tonght. They, well, there's my offer and the offer is a good offer and it's [inaudible] tip table, but you need to go back to the rest of your buyers and do the right thing. Yeah. And then it either goes to a boardroom auction or it's just done by exhausted. So the, there's a couple of reasons why boardroom auction is actually.

Phil: A boardroom auction is a peculiarly Melbourne thing. Yeah. Yeah.

Phil: You, you, you, you typed that, you take that, um, that offer and then the interested parties are then ah, into the boardroom and that's in the auction room.

Veronica: Yeah. Yeah. And because you actually have a situation here where if you buy, is it three days prior and two days after the auction? Three days, three days, Paris that it's actually within auction conditions. Sorry. In new South Wales, you on the day of the auction ends at midnight, ends at midnight you get,

Phil: but it's, it's, it's, which is sort of when the auctioneer leaves the property, it's a bit,

Veronica: yeah. Yeah. I don't quite know what they can actually wave their cooling off period up in Brisbane just by in writing themselves. Whereas in new South Wales, to waive your cooling off period, you have to get a solicitor to sign a certificate 66 w but down here you can only waive it in that three, in that six day period. Other than that you always get a cooling off period. Cooling off period applies. Buying prior to auction in Victoria before those last three days is fraught because the, um, this is one of the reasons I think more property going to auction actually get to auction in Victoria and they do in new South Wales for instance, in terms of sold prior because no agent is going to want to take that property off the market and give a cooling off period during an auction campaign. You stuff you campaign and the falls over. But that's the problem. You have to be really sure about that. Yeah.

Chris: I saw that on the weekends, so we went up to an open home and um, I rock up, it was a big sign on the board, you know, uh, properties offers being taken, canceled, open home anyway, come back in two days. Life properties back on the map. Um, you know, there's obviously something's fallen over, but I'm like, why would the agent have taken it off the market without an unconditional offer and they've just wasted and it's an auction campaign. So they've lost last Saturday. Yeah. In Sydney. They have lost their, um, you know, one open and there was quite a few cars there. Uh, one lady was like kicking off.

Chris: This happened to me last week.

Veronica: It is amazing.

Veronica: There's an agetn you don't want to list with.

Phil: It's not a, it's a unlock. I've, I saw it when I was going to Sydney a lot and do the work that I did with McGrah. You saw that and you saw that there was a large, much larger percentage that had cell prior. And I just wonder whether or not one of they missing. And I think now, I think it definitely, if it's right to go, it's right, it's the right thing to do, right thing to do by the vendor and the buyer to do it. Absolutely do it. Sell it, PRI, but you don't just hang out for auction day just for the sake of doing that or getting the auctioneer to so they can perform. Now it's not about that, it's about, um, it's about maximizing the result. But I just think that sometimes that you do, you miss the opportunity when you do sell it prior. You've gotta be really sure.

Veronica: There's an element of fear involved. There's an element of fee from the buyer's perspective, trying to avoid the competition. There's a nominal fee. We sometimes we the agents, certainly not in a hot market, but in the, in a awkward market shall we say, he has an element, a few, Oh it's not gonna you know, I don't want my day of humiliation out there and, and they can't often get over themselves. And is that getting comfortable with being uncomfortable? That's what you start doing.

Phil: There was a lot more private auctions now that are happening and that which are, which are good cause they, they happen, uh, they don't always happen on a Saturday. They often happen during the week, which is, we're seeing that the new form of open negotiation, which is basically an auction, but online, I think that's persons of interests and you will see.

Phil: the expression of interest. But the deadline, no, I just see some of the map. Yeah. Or some of them they have a deadline, but a lot of the time that they passed that on to do that. Whereas I think if you go in to do expression of interest, you better to do, you better to do the, like the open negotion for, for which is online and everything is transparent. You can see what's happened with that. So, so that, yeah, I don't see that's going to be a direct competition to auction. I see it more as as converting & getting expression of interest and private styles converting them and having the hosts that they can work with that. So, um, and it's based on, uh, that, that it's priced on an auction platform anyway. So it's really, it's really having an optional say absolutely. Principles are the same.

Chris: every week we hear incredible stories of the dumb things, property buyers do dumb things that end up costing a whole lot of money and are a whole lot of stress mistakes that can be avoided. Please Phil, can you give us an example of a property Dumbo? We can all learn what not to do from these stories.

Phil: Yeah. I've given some thought. Oh, I really thinking about the seas. Is it often? I see it is, no, probably it's not [inaudible] the strategy of a bind, not having a strategy, not having a bidding strategy. And I see, yeah, I had a beautiful thing on the radio. Um, uh, Ross Stevenson came onto these, talked about John Clark, the great light, John Clark who he said in this episode of the games he said, yes, we've got plan a and then we've got plan B and what's plan B? Well, plan B is plan a with a whole lot of panic. And I, that's what I see with, uh, I see with ah, it is coming to an auction and not having a strategy, not having a bidding strategy, not to do what, or not thinking about the different scenarios of what can happen.

Phil: Not thinking about when they're going to open the meeting or what they're going to do. How are they going to do it, where are the going to, where, where are they going to? And it's really is we'll rock up and see how she goes. And I see so many people about this and we'll go and see what happens. We'll go and see what happens. So what, why are you bothering to do it or not? And I've saw that twice on the weekend where I really saw bidders were just th they could have actually taken so much more control. Yeah. And they actually probably do that. They could have both of them probably one did sell and the other one I don't think sold afterwards that they could have actually bought it and they weren't that far away. Yeah. So you can't tell me with that they, it wasn't their lack of dollars that was stopping him.

Phil: Something else was stopping them. Yeah. I reckon that is so, so the bit of advice if you're out there is to, is to have a strategy, have a bidding strategy, go and work at and do it and ask, ask you all ask agents, what do you think the best strategy is or they'll say, Oh, bid and keep going. Yeah. but then you bid aggressively. Yeah. But then you, then you went and then they, again, it's a bit like that third party reference. Then you'll get the, if you get that from enough people that you'll actually be able to form your own ideas. But the thing is if you, are you better off employing someone who knows what they're doing, not getting a relative who may have done it once or twice. Oh yeah, they will meaning absolutely. As we always say, the bloody brother-in-law, they get in there, the the they, they stop people buying homes. They really do. And it becomes all about them and they all know what I'm doing doing all that. And they, and they, and they, they push when they should pull in, they pull when they should push.

Veronica: So true. I think in that particular instance where you get a lot of people where their friends or somebody will have you volunteer all y'all bid for you cause they just, they mistake the idea that I'm confident and I'm an extrovert and they think they're the only two things you need to be successful at auction. And I often see that in a play. I think the shy person, like you're talking about before, the timid person, vs the aggressive they go and find a mate that's aggressive. And I think that's the solution.

Phil: It's not the seller, it's about the strategy of having their bidding strategy. So I've seen, I see that happen and I see it was I'm conducting and I'm not on conduct as many real estate auctions now as I used to because I'm training all these other people. I want them to do it. Yeah. Yeah. Well that's sort of what, um, uh, what I want them to do and, and, and look, it's great to see the, the, the, the, the new auctioneers coming in. You don't want to say, yeah, yeah. You want to say bring it on to it for the next gig. Cause they've got all the energy and they've got that. We just need to just need to scope them properly to make sure that they don't get too carried away.

Chris: Everyone's got to learn. Someone gets them rather than the board.

Phil: So, you know, and we're seeing more women do it now too, which is really, yeah. Yeah. I know that your website, actually you've got a list of fairly short list or too short, too short, but we, yeah, there was um, three or four that came through this year through our novice programs and they were really good. They were really, really good. So I'm ever hopeful that they, Oh, I know. I know one is, is conducting auctions already at, in, at an Epping and she's out there flying and there's another one in Flemington who's a be up and going and she, she's really good and too, yeah. Um, two in the, eh, Port Phillip and Armidale area. So we hopefully we can get it just adds a different dimension to the, yeah. Yeah. Which is good.

Chris: Thank you very much.

Veronica: Thank you for your time.

Phil: It's gone already, Oh, no time has flown for sure.

Veronica: I couldn talk about auctions forever, a bit more.

Phil: It is my pet subject.

Chris: So yes, we wanna make you a bit of elephant rider and this week's elephant rider training is,

Veronica: well, let's talk a bit about setting your limit and before you go to auction, and I bang on about this all the time, that to go to auction and and along with what Phil in terms of is Dumbo was people that actually go without a bidding strategy, but going to auction without actually one establishing what that property's really worth and two what your actual limit is, is absolutely setting yourself up for failure. You will either pull out before you should and somebody else will buy it or you'll pay too much. So, so you're really at risk of that if you do go to auction without actually really carefully setting that out. So we go through this exercise with our clients all the time and there's four pillars that we say are important to consider when you're actually setting your limit. There's two that are objective and two that are subjective.

Veronica: Now the two objective, the first one is really the caliber of the asset or the property itself. Now we have a tool in our business to actually measure that. But you, from your point of view, um, you know, in, in this interview I mentioned about as a sales agent, you know which properties really are great properties. They're crackers are easy to sell, lots of people are interested in them. And really if you get to know your market and really understand the drivers and the characteristics that are important to buyers in your market, you will know that you'll know that instinctively what's a good property versus what's not a great property. So a good property, a really cracker is worth pushing yourself a bit more for because over time it will, it will do better over time. So that's the first thing. The second objective measure really is actually how does that property, um, where does the value of that property sit within the market and the current conditions.

Veronica: And, and Phil talked about that as well, you know, the today. So you do need to look at recent sales, but you also need to factor in, well how is the market different today than what it was when those individual properties sold for? It's really difficult when you're doing that research to actually find one that's exactly the same as the one that you're looking at buying. And so you do have to sort of factor in well in which ways are these properties better or worse or equivalent and actually rank them and um, you know, make sure that you do have a very clear idea where this particular one sits. So when you do have that real clarity around that, that value of the property that can make that decision making around what price you're prepared to pay prepared to pay, uh, easier. So on the subjective side of things, it comes down to also for you, how long have you been looking?

Veronica: How uniquely does this particular property suit your needs in a way that you have not seen in the time that you've been looking? Um, and even when you're done that, that recent research in terms of recent sales, how many of those would you have bought or could you have bought? So when you get a sense of how unique that property is and how scarcity is relative to what you're after, then you might push yourself a bit harder for that one. But if there's quite a lot of them around, and if you don't get this, it doesn't matter cause you're waiting in a couple of weeks, they'll probably be another one then you're not gonna push yourself that hard. And the last pillar is, once again, a subjective pillar is your limit, your bidding, you know, limit your budget is basically defined by how much you can afford, what you can borrow, how much you've saved, et cetera, et cetera. That's completely unique to you. It's got nothing to do with the market, it's got nothing to do with that individual property. But it's obviously very important factor in setting your limit. So I'll reiterate going to auction with that very clear idea of what the property is worth, but also what you're prepared to pay if you have to is absolutely critical to success.

Veronica: Join us for our next episode when we have a whole episode on mortgage strategy. Don't go to sleep just yet. It is actually quite fascinating. Chris is in his element because of course he knows a lot about this, but our guest is David Johnson who is not only a mortgage strategist but a property planner. Now, what is property planning? You may ask, well, it's a very good question and you should join us for our next episode and find out.

Veronica: I just want to tell you quickly about a property investment show that Chris and I are both presenting on. This is an online event that runs between the sixth and the 10th of November this year. Now you can get FREE tickets on www.propertyinvestmentshow.com.au Chris is doing a presentation. I'm doing a presentation and also some of the guests we've had in the podcast are doing presentations such as Kevin Turner, Pete warden, Jane Slack Smith, Kate Bakos . Now I do just want to quickly caveat that whilst we're encouraging you to check this out, you do need to be discerning by promoting this. We're not endorsing every single speaker nor every single message on there. Now you will know what I'm talking about when she start delving in there. Just be careful. Look for the simple messages where experts are really focusing on sharing simple foundational concepts, not get rich quick stuff.

Chris: So the elephant in the room is 100% for you.

Veronica: The reason that Chris and I do this podcast is because we passionately believe that property buyers can do it better. We really want to help all of you understand all the risks, but also the ways in which you can avoid your elephant making the decisions.

Chris: What we would love for you to do is just to share this episode and share other episodes with people around you that are going through the property process.

Veronica: Give us a review on iTunes or five-star. Please will be very appreciated, or you can connect with us on www.theelephantintheroom.com.au, the links are all there for you.

Chris: Please connect and send us a message. We'd love to hear from you.

Veronica: Because this is about making sure that we all benefit from the wonderful information that our guests have been sharing with us.

New Speaker: Until next week. Don't be a Dumbo.

Veronica: Now remember, everything we talked about on this podcast is general in nature and should never be considered to be personal financial advice. If you're looking to get advice, please seek the help of a licensed financial advisor or buyer's agent who will tailor and document their advice to your personal circumstances with a statement of advice.