Episode 122 | Pandemics, property & purchasing | John Cunningham, Cunninghams

During this crisis how has the real estate industry taken up the challenge to adapt.
In this special episode we bring back John Cunningham, Principal Director of Cunninghams, a successful and established real estate agency based in the Northern Beaches. John has a well earned reputation by experiencing all aspects of the property market; buying, selling, advising and investing. We sit down to discuss the state of the real estate market during the pandemic including how all of the changes have impacted buyers and sellers, getting cold feet or becoming hot to trot, and on the other side, how agencies have taken these challenges and restrictions head on delivering a service that has adapted to the situation.

Here’s what we covered:

• Are real estate agents equipped to be trusted advisors?

• How are real estate firms finding the lockdown laws?

• What are agents doing to ensure clients safety?

• Is the gatekeeper mentality helping or damaging the real estate market?

• Why has the pandemic been a wake up call for the property market?

• Still in the market? What should you do?

• Timing, wait another year or action now?

• Is there a conflict of interest with agents giving advice?

• What should property managers be doing during the pandemic?

• How much of the real estate market has dried up?

• How are agents pre-qualifying their clients?

• How are sellers dealing with their property under inspection?

MENTIONED EPISODES:
Episode 12 | John Cunningham
Episode 120 | Michael Yardney

GUEST LINKS:
REIA - Home
Cunninghams

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: info@gooddeeds.com.au 

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

Buy the book - AUCTION READY How to buy property at auction even though you’re scared s#!tless: www.getauctionready.com.au
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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 4 April, 2020.

Veronica Morgan: 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 buyers agent cohost of Foxtel's location, location, location Australia and author of a new book called auction ready, how to buy property at auction. Even though you're scared shitless.

Chris Bates: 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 property.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website as well as download our free food or forecast to report which experts can you trust to get it right. The elephant in the room.com.edu.

Chris Bates: Please stick around for this week's elephant rider bootcamp and we have a cracking Dumbo of the week coming up

Chris Bates: 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 buyer's agent. They will tailor and document their advice to your personal circumstances. Now let's get cracking.

Veronica Morgan: The real estate industry is fast coming to terms with how the Corona virus is changing the way we do business. Suddenly property managers need to be up to date with government stimulus packages and be able to effectively communicate and support both tenants and landlords who are under financial stress. Overnight auctions went online and sales agents had to cease holding open houses, in fact to change the way they'd qualify buyers and handle negotiations. Everyone in the industry has said to field an avalanche of questions from their clients questions they don't know the answer to most of the time, and of course they're also worried about their own financial position. How will they survive when commissions dry up, when falling rents erode their recurring revenue. When it comes down to it, are real estate agents really equipped to take on the role of trusted advisor in this landscape where calm guidance is so desperately needed.

Veronica Morgan: Here to discuss these issues with us today is John Cunningham who has had a long and distinguished career as a sales person, auctioneer and principal of his own agency Cunningham's on Sydney's Northern beaches. Now, John has made a significant impact on the industry as a whole. He's been the president of the REI new South Wales for a couple of years, a few years back, and taking on the role of chairman of the professionalism committee of the real estate Institute of Australia and really spearheading a whole new movement. Now, you may recall our last interview with John back in episode 12 where we discussed the future of the real estate industry and the pressing need for reform. Well, it appears that the future is here. So welcome John. I'm looking forward to this conversation today.

John Cunningham: Thanks. Thanks Chris.

Chris Bates: So John, good to have you on here again. May, how did it feel when you got that call that you probably thought it was inevitable to be honest. Probably already pre-prepared, but when you actually saw it on the news, I don't know if you're watching it at 10 o'clock when, you know how I've been home has got canceled, auctions got canceled. Was it a big freak out? How did your team react? You know, what's changed?

John Cunningham: It wasn't a surprise. I mean, the reality was that we knew that you know, there would be staged entry into into a shutdown, a lockdown. So the objective was to be prepared in advance for that to actually have the team in, in with a mindset that change is going to come at a rapid rate on a day to day basis and therefore we have to adapt to it. So yeah, it wasn't like a shock. It was like, okay, now we move to plan B. We were in plan a, we need to plan B. We were about plans seem, we thought about plan D,

Veronica Morgan: I want to know about C and D.

John Cunningham: Plan C was where we are right now. You know, that's the, you know, the four stages of, of of New Zealand are in plan D. So it's like, okay, how do you, you, we understand that's how it's gonna play out by studying and understanding how these things work. So therefore you adapt a business according to, to what you can control, what you can do rather than what you can't do or can't control.

Chris Bates: And so one of the major differences between, you know, businesses versus plan, say you're in now obviously you've got the simple things like the gloves and the hand sanitizer and you know, temperature check maybe if you're going that far. But what are some of the other things you're doing that you would never do before?

John Cunningham: Cool. I think the interesting thing is I call this as 1977 revisited. You know, we are basically dealing on a, on a one to one basis so that the concept of, of the trusted advisor really only exists when you've got personal contact. And you're, you're dealing in a, in a, in a service based thinking. So the biggest shift for everyone is going to the private appointment concept. The way that we do it, the, the sanitizer always. They're just the rules of engagement that exist in that space. The biggest change that occurred was mindset shifts from agents and mindset shifts from consumers to say, well, this is the new way we do things. There's no right or wrong in, in what is the best. It's just this is how we can do it. So how do we therefore facilitate the best outcomes in this current environment or the next environment. So you know, the move into the digital space where you've got, you know, your workflows digitally enhanced by technology and then you've got the things that have to happen regardless. You've got to exchange a contract or that sort of problem, you can do that digitally. All the things that came as a result of the shifts that had to take place were just simply a nuancing of a, of a, of a old way of doing business.

Chris Bates: We've got two mindset. You've got the growth mindset and the, I don't even know the word is I'll just think about growth. Yeah. Why don't we kind of get stuck in present day thinking, et cetera. Doesn't really think forward but as a positive kind of real estate agent out there. Reality is you've got a product that you need to sell and you need to find a buyer. Isn't this shift potentially going to get you better relationships with your buyers? Then if you run an auction campaign where people are just rocking up to your open homes and kind of avoiding you and don't want to talk to you, now they have to book a time with you and actually be, you know, talk to you.

John Cunningham: I think it's, it's, it's fantastic, particularly for the agents who have only been in the industry for say the last 10, 15 years who have been to an extent, particularly through those boom use order-takers. They weren't really engaging in, in a building relationship of trust. Cause that's what it comes down to. And, and you know, fortunately I started my career a long time ago where this was the only currency that you had. At that time you were engaging on a one to one basis. You were discovering, you were understanding, I think understanding to me that the key component here, unless you're actually understanding what your client's needs are, what your customer's needs are, you can't actually deliver what they need or want. So discovering, understanding, and delivering back solutions that people sometimes didn't even know they needed because you actually understand what their needs are. Consumers don't fully understand what they're entering into. And you guys would understand this more than, than anyone. They're very much in the dark. Our job is to guide them and now this is the greatest opportunity. Agents have got to actually understand that.

Veronica Morgan: It's really interesting what you say about a lot of agents have been order takers. It's very, very true. Maybe not so much in the two years of the downturn. But certainly in the five years preceding that and since lost my, but what I'm finding is, is real mixed bag and the agents that we're dealing with out there, there's those that really, you know, and they just roll with the punches. It's like, okay, was this a new way? We've got to engage and we've got to ask more questions. Oh my God, the boss are giving us the answers. You know, we're qualifying those, those those buyers before we actually make an appointment because it's inefficient to let everybody who wants to look at a property comes through. And we ask them about their finance. We ask them whether they'd be sat on other properties.

Veronica Morgan: We asked them exactly, you know, where they're thinking on this property and they tell us, and this, that's some feedback I'm getting from some agents, other agents I'm finding like their heads spinning, they've got no idea what to do. I guess if they're not being led by a buyer sales manager or principal who understands what they need to do now, then the, it's really interesting seeing people who've only been in the industry in the good times because they seem to feel like everything's gonna fall off a cliff. And the amount of panic that goes into some of the advice they're giving them, they're both the buyers and the sellers. It's just appalling.

John Cunningham: Yeah. Look it is, it's, it is interesting because what I find both interesting, frustrating and I love turning, you know, frustration, the fascination that even during the boom years, during the times of, of low stock, high demand or, or balanced markets, it doesn't matter what the market is, the market's the market, the agent has to ensure that they adapt to that market very rapidly. Probably more important than any of that is the fact that no matter the market, we should be in this discovery understanding mode. We, we, we don't really have an excuse. Even if you've got 50 people coming through a property, they've all come there for a reason and we've got to simply do one thing and that's to find out why they came through. Now each one of those people, and this is how I viewed it, have a purpose in your business.

John Cunningham: You have an opportunity to find out what their needs are and look at it either in the short term, medium or long term as to how you deliver solutions to those people. So this, this to me is like nothing's really changed. All that's happened now is that rather than trying to have expedient two to three minute conversations where you can get as much information as you can before you move on to the next person, you're actually going to be having 20 minute conversations where you are going to actually get to know these people. And those people are going to be your future business. So nothing's changed. It's just the way that you're going about it. There'd be less consumers, so less buyers in the marketplace, they'll be still have a necessity or a need to, to actually transact in some form. There is still so that will have that need to transact in some form.

John Cunningham: And I was talking to someone this morning or on a webinar about this. I said, you know, the reality is we might've had 80 people come through a property over a three or four week period and there's only one buyer that combined. Now we might have eight people that might look at a property over eight weeks and there's still only one person that can buy that property. And your likely that one person's within those eight people or just, sorry, just as likely that one person's going to be in that eight people is in the 80 so it's an interesting dynamic where we're focusing our energy into really discovering and we call it, we we're going to find out, are ready, willing and able buyer list. That's our currency at the moment for potential sellers that has far more relevance than any marketing that we're going to do, not dismissing the marketing elements that they've, that's changing significantly as well.

John Cunningham: That it's when you actually get to find who these people are, then you ask the question, if I found the home of your dreams, the home that you've given me, that the criteria that you want, even though you said you're sort of out of the market, that property came up, would you like me to give you a call? Now nine times out of 10 they're going to say yes. So the concept of discovering what people think they need and what they really need is to me where the great agents are going to shine at the moment.

Chris Bates: The point is what you're saying is it potentially the number of buyers have left the market? And I'm getting the same thing on pre-approvals a little bit. Like a lot of people who were thinking about buying a, saying, Oh, I'm not really sure about it's gotta happen and work and things like that. And I think you're talking to the same people on the other end of the transaction, right? And you're calling him and saying, you know, he's still in the market. A lot of saying, well no, I'm not in the market, but, and you're saying you're flipping it on a sentence saying, well, if I find the right property, you win in the same all year. I am. So they're kind of convincing themselves they're not in the market, but really they still are. If that rent property comes on, which is really interesting.

John Cunningham: Yeah. But without a doubt. I mean it's, it's been a, you know, a standard question forever a day. It just has more relevance today because of people going, I'll go and sit on the fence and you know, it's, it's incredible. And one of the, again, one of the the questions you asked or one of the realities that you make sure is see to them, do you realize that all the people who are sitting on the fence right now are gonna come off the fence at the same time,

Veronica Morgan: Which is what we saw at the end of last year. Of course now with, with that, but you know, herd mentality is social proof, all that sort of stuff. The things that we talk about this podcast over and over again. With that, how, how easy inquiry you know, on the ground with you guys, I mean, I guess what would you say has happened to your, your requests for appraisals? So potential new listings, what's happened for your, your buyer inquiry. So if you've got any sort of numbers around that to give it, give us a sense of, you know, the reality and the immediacy of this cause we've got to remember that, you know, beginning of March clearance, right? Was over 80%. That's a month ago.

John Cunningham: Yeah. Look, the reality is everything's changed. You know, we, we look at last week for example, the number of inquiries we got. There's two things is there's inquiries we generate and there's inquiries that we, that we get. So one's primary, one's reactive. We generated more inquiries. And the number of actual reactive inquiries was down by 75% week to week. So we, we had one property the weekend before. We had 17 individual viewings of that property on Saturday, week ago. That same property the following week had two individual dealings on the property. It sold. As a result of the, of the 1921 all up, we ended up with two buyers. It's interesting the ratio still haven't changed that much. And we've had other properties where the last week we've had zero reactive inquiry. So if you looked at the numbers 75% down on that, but are actually proactive inquiry is increased by probably 150%. That with agents actively going out, sourcing buyers, reactivating buyers, doing those sorts of they're what we call care calls. But their, their response calls in in my view that we want to actually get response to put them into, into the, into the loop.

Veronica Morgan: And what about on the listing side of things? Have you found that,

John Cunningham: Suppose we're really active for the two weeks up until this week. It's an interesting shift as well because we're moving into school holidays and they vary from state to state, but we're in new South Wales or shifting the school holidays this week. And and a lot of private schools have closed anyway. Most of the kids are at home. There's this, at the moment, this transition period, I think we're going through where people are just going to sit on the fence over Easter. And we're just offering, you know, virtual appraisals. We're offering real appraisals, we're offering two teared appraisals, we're offering all kinds of appraisals. This is still happening, but they've dropped again probably by 70% in that week. And I wouldn't expected that during this transition. And then we'd go into the next phase.

Veronica Morgan: But it's sort of funny because it's like what is a side? Eastern school holidays is usually an issue in particularly a family areas because people go away on all of that. So it's like, Oh, right off am I go to my bedroom? It shouldn't make any difference in the current climate.

John Cunningham: It does because it's basically a time to take stock. And I think that's the key when you go through periods of change and we've gone through a month of complete and utter uncertainty. In other words, what can we do? What can't we do? Where are we heading? When is this going to be over? And now it's only getting these positive outcomes that give us hope. And hope is a, is a incredibly important currency at the moment. So, well, like how are we going to, we are going to come out of this, the numbers that are declining, the biggest fear is that complacency will sit in and we'll see those numbers start going up again. And there's, you know, there's an idiot born every day and there's plenty of them still out there. And you know, if we can control the idiots and keep bringing on those thousand dollar fines I, I like to see someone get an $11,000 fine actually, and just to, to shake it up right now, we're going to come into the next phase and that's what I'm getting my guys ready for at the moment.

John Cunningham: It's the next phase. And I believe there's going to be a three phase exit. Not only just from the point of view of, of government requirements or regulations, but also how the market will respond

Chris Bates: In like 2019. We, what's causing the prices to rise so dramatically was the buyers came to the market before the sellers came to the market. And so there was lots of buyers, you know, labor didn't win the election. Interest rates are low, let's go, let's go buy property basically. And the seller said, hang on a sec, my property is not going to fall 25% anymore. Maybe I should try to do that upgrade. And there's this lag of sellers hitting the market. So if for example, those inquiries do come to sell at the moment, John as someone with an abundance sort of growth philosophy across your whole business, which I assume that's the case how, how are you actually saying to those buyers that don't have to sell or they're sellers? Do you basically say some look, you know, maybe we should just kind of watch and wait till the end of the year for buyers to really come back. I mean, the sellers that you know aren't going to go sell anywhere else and their customers for life.

Chris Bates: What's some of the advice you're saying to them right now?

John Cunningham: Yeah, really good question Chris. And I go back to what Veronica said earlier about, you know, people giving advice that is a bit panicked based and not really well thought out. We were giving our potential sellers advice that starts with going through an understanding process of what's actually going on first. That'd be good. Let me get you to understand what's going on. Then. Let's look at what your options are. There's three options that you can do. You can go to market take a long view. And, and, and see whether your buyer, that ultimate buyer could be here next week. They could be here next month. They could be here in three months time. So take a long view the be in the market for that opportunity because yeah, property selling the person that would love your home more than anybody else could have just sold their place the day before.

John Cunningham: The reality of this auction break is only three weeks, so we should pack it in and there's plenty of buyers in the hot markets for them to actually activate a competitive environment. Clearly, right now, if we can create an environment where there's two buyers, which we are still creating we get the best outcome, but we're still getting the best outcome with one buyer because it's about desire what they want. That's one. That's option one, I should say option two is, look, you know, if you're in no hurry and you want to wait for the market to to change and be in that marketplace, that's great. That's, that's not a problem. Let's look at the consequences of each step. So that's the consequences of that step. What's the worst thing that can happen to you right now? That's an open question. What's the worst thing can happen to you?

John Cunningham: The answer is quite simple is the market doesn't change. It stays the same. That's the worst thing as a seller, that can happen. On the flip side of that, the market may decline. You sell, now you're ahead of the market. When you go to go to buy the market is not going to be rising. So we, we're not, we're not going into a space where that's a concern to any potential seller. I'm still on a delayed settlement, sell it, sell it, and then go and rent somewhere. There's plenty of rentals out there. Because we can still move home. So therefore it comes down to, well, what's really driving their decision to, to sell? And I talk a lot about time. You know, we've only got a finite time on this planet. You know, you want to wait another year or do you want to actually make the move now?

John Cunningham: If we can achieve the right objectives for you and then you can move that, those funds into another property, how does that look to you? So it really is making sure they understand the, the drivers and understanding the pros and cons of it. And then we can actually say, okay, does any of that make sense? Would you like this is one of the key questions. Would you like my recommendation? Right. Because they're wanting guidance. They're wanting to know that you have the solutions, that you know what you're doing and that your advice is based on good facts and figures and skills and knowledge and therefore you're worthy of their trust. And they go, yes, please. What do you think I should do? You can only get there when you've gone through that exercise. And that is, that is to me what being that trusted advisor, that guide on their journey or their property journey is all about.

Veronica Morgan: I'm interested to know what's actually happening with prices. Cause you say that, you know, good outcome is when you've got two bars on it. Or one, and I'm seeing, I'm expect, what do I say in a transitional Mark? And you use, use, use that word. I use that word as well, is I seeing consistencies. And there's inconsistencies for a number of reasons. One is because you got owners with different levels of motivation. Some may have been caught in the crossfire, I they'd bought already. Others my not be in that position. But they do want to move, but they don't have something to move to. So they're going to hold out more than somebody who's already bought, for instance. So you've got different owners with different individual pressures. And then you've got different agents saying different things. So if you've got trusted advisors who are asking them lots of questions and going through the different scenarios with them and helping them understand that the consequences of each age approach versus those that are basically, you know, quick, quick, quick.

Veronica Morgan: So now before it all falls off a cliff significantly, you're never going to be in a better than Accenture, et cetera, et cetera. There's plenty of that going on, rod, the minute too. So, yeah. So, and then buyers of course are then then out there dealing with these agents and getting these mixed messages from different agents. And so we're seeing some, you know, we've been in some competitive situations on some properties, we're seeing some properties sell for a reasonable price to some self, a little less than we would have expected. Others just not still there at all because the owners are fixated on a price and they're not, they're not meeting the market. So w what are you finding, I guess on the ground where you are in terms of the prices that you're getting today that you might've got a month ago?

John Cunningham: Yeah, it's definitely changed. There's no doubt about that. We've let some results that I would say, again, it's sporadic. It's sporadic. You, it's not consistent at all. We're, we've got some sales that I would say haven't changed from a month ago. And we were pretty peaking figures a month wealthier. Others we have had seen some where there's been sellers who needed to sell because they bought and they probably come off 10% just purely out of the fact that they want to transact. If I took a general view and average it would be around 5% at this point in time. Could it continue to go down? Absolutely. It could. It could. And we could see a 10% across the board. There's economists pitching 20, 30%. I don't see that. Just due to the fact that we'll go into a bit of a hiatus at the moment with buyers and sellers in less numbers.

John Cunningham: But when we're talking to buyers that the, the, the interesting thing is that there's this sort of always two types of buyers. There's the buyer that really wants to, needs to do something. They're actually more emotive and they're making a decision. They bought a already sold, they need to buy or they can go and rent. That's a choice. Most people want to be in their own home. So they're there. They're buying at the moment and they're saying, absolutely. If I find the white place, I will, I will be diving in. There's opportunists. And it's, it's interesting that when's the best time to buy when, when there's a crisis. Is it, is it at the beginning? Is it in the middle? Is it towards the end? And you know, those opportunists will make their own decisions. I'm not gonna have any conjecture on how, what is, what is the best time? But usually most opportunities think who think their opportunities aren't. They miss it as you probably would. Well, you joined the throng at the end with everyone else that's come back off the fence.

Veronica Morgan: Well, that's why garbage, you know, that they're so focused on the park and they actually lose sight of the actual asset itself.

John Cunningham: So for us at the moment, it's really understanding what those flying drivers are. So again, we'll be dealing with less people, but we'll understand them far more. But also give them information that will enable them to make a good decision. So the influencing that we're doing right now is, is about saying don't go have you thought about this fully you've got your finance in place now. You may or may not get that same finance in three or six months time depending on, on, on our fiscal position at the time. So think about that. It, we may not be able to get what you need. If you're in a secure job, you're both in good jobs where there's no issues in relation to you know, have been stood down or having your hours reduced factor that in as well. Right now. So it's making people aware of of the environment they're in. And then they'll make a rational decision.

Chris Bates: Yeah, I think you're a hundred percent right. I think the, the people who are probably in a bit of trouble here, and you've probably got these clients on your books that did buy before selling. And you know, they'd bought and there's, you know, maybe in February and then they listed their property in March. And things just aren't going well. And I think they're the ones who are, you know, unfortunately going through a lot of stress right now where they have to meet the market. There's a finite time on how long they've got to meet that market as well. And they're potentially getting opportunists and low ball offers. And how, how are you dealing with those clients? Join us if you've got a few of those or are you seeing that,

John Cunningham: Look, we heart and the definitely there, they're in that stress mode. And you know, we, we're making sure that they're working with our brokers to look at solutions do due to the fact that, you know, the banks are coming to the party in deferred payment plans and things like that. The, the concept of bridging finance today is not like it was when, when I started out in interest rates for 17, 18%. You know, this is a great time to actually get some bridging findings. If we can get it and say, I'll, I'll take that months with a bridging and our capital to my onto my loan and I'll figure it all out later. But you know, we're making sure people consider that rather than walking away from deposits, you know, that, that that just leads to a truckload of pain.

John Cunningham: And and potential court action and all kinds of messy situations rather than saying, well, let's see how I can actually finance this thing over a six month period and see how that works. It's just going to be an extended loan option or, or a, a higher repayment option down the line. So yeah, making sure they're getting the right advice. And bear in mind that we're not giving them that advice. We get heading into people who will give them that advice. But it is, it is, it's, they're the ones in stress. So they're either going, okay, I'll take the heat now and, and capital into my my new debt. Yeah, I'll carry this property and try and sell it in a better time. You know, all each one there's that, there's not a perfect outcome, but there's an outcome.

Veronica Morgan: It does lead into another side of this equation, which is the rental side of things. Cause obviously if that's going to be an option for people, they've got to be able to think, okay, well now I need to rent the property out for a period of time. Or maybe they don't, I guess. But what, how, I guess on the tenancy or the property management side of the business, what have been some of the hurdles and the challenges that your property managers have to deal with that you know you've never come across before?

John Cunningham: Yeah, well the, the reality is we haven't in, even in GFC and those, those times that it wasn't about rent negotiation, it was about at the end of the lease, they're either going to stay or they're going to, or they're going to break lease or, or they're going to renegotiate the lease at the, the end of the least. This is an entirely different world. And to me we've had a couple of landlords say, I'll look, I, I just, you know, with all this going on, I think I should manage the property myself. And that's the craziest concept for anyone to do right now to manage the property themselves. So we had to explain to them what that means and what they're getting themselves into to do that for the small saving that they're going to make on our, on our, on our fee for them to actually embark on the journey for the next six months with what's going to happen would be, that would be insane.

John Cunningham: So that's, that's one element that flipping over for the, for the property manager onto the tenancy side they're in, in a place right now where the hours that our property managers are putting into negotiate outcomes and still do all the jobs that they're doing is, is, is unbelievable. And in, you know, it's, it really is you're seeing your, your, your, the value of your property manager only to the client, but to, to the business in these situations. And then they're put under massive pressure. So we spend a lot of time working on dialogues, mindsets with them to understand this is, people might be under stressed, but you're there to help them, not that you're not there to be abused during the, in that in that sense you're there to help them. They have to understand that you're there to help them.

John Cunningham: So, you know, in our business already we're about 7.5% of our, of our tenants have requested help. So far we've had 5% or sorry, about 70% of those landlords have agreed to terms. We are waiting on the other 25% to come back with the detail. We believe some of them won't come back with the detail because there've been opportunists the daylights say that, but, but some people are opportunists in these, in this environment. And so therefore they have to understand that it's like applying for a property for lease. You have to supply information for the landlord to make a decision on you. In this situation, it's exactly the same. We need this information to enable the landlord to make a decision, the landlord might even actually be worse off than you are. So we're going to have to work through this and come with some solutions.

John Cunningham: We're still waiting for the state government to, to come back with their decision, which we're now expecting to be Saturday or early next week. So those pressures on the property manager and the communications that we're doing to both our landlords and tenants have to be very well thought out. Because the last thing you want to do is get criticized for your communications. And we've, we've had some of those already in, in, you know, here's a list of government things you can do and you'll get criticized for doing that. You know, we're here to help you. But in return we need, we need information. So let us know if you're in strife. Landlords would do a lot of pre-framing with them as to what is coming. We've done that each week. And so they understand where we're at, what numbers look like and how, how the, what the actual options they have in front of them.

Chris Bates: I think it's a really good shout out John to property managers because I think they, they've got a tough job. The reality is, you know, the amount of properties, a lot of them do manage the time tenants not paying rent, repairs. Like there's so many things they do that are probably already filling their day and now they're dealing with this and having to manage the conflict of interest between an investor's needs and a tenant's needs and is the tenant's needs legitimate or trying their luck. And then you've got the investor who's so nervous and stressed about not having that income to manage and pay all their bills, which they haven't got enough buffer for and they might've lost their job. So I think it's a really tough gig. And it shows the, the, the good ones already working flat chat and then they've got all this additional workload on them.

Chris Bates: And it shows probably to me, I just sent her an email. I said, look, you know, just give you a heads up. You, you really feel free right now because I know that you're dealing with all the fires around you. Just because it's just a tough, tough job. And let alone right now. So you know, I think if you were self managing right now, imagine having to deal directly with your tenant who's, you know, potentially lost their job and having no independent third party to help you with that negotiation and potentially abuse going around.

John Cunningham: They're doing daily updates just to our team because it's changing daily. And the expectation is when the prime minister put it, that thing about moratorium on, on addictions so many times, Oh, don't pay my rent. That's fine. We're getting, you know, it's like, come on, there's a little obligation to pay your rent. You've signed a contract. This will affect your credit rating for the rest of your life and all the other things that come as a result of that. You know, this is not an excuse to have to pay your rent. So it's, yeah, it's, it's right when government makes announcements and everyone will size what that means. But it often isn't what it seems.

Veronica Morgan: It's actually a good point because, you know, in my team, you know, we're all sort of looking to the REI new South Wales for direction because even though there's an official announcement then has to be actually put into place by each individual state because of the legislation is a state based legislation. And so then we have to wait for interpretation for starters is what the government meant when they said certain things. And know, and then, and then it's like, Oh, and then actually what is the legislation in the state? So how is that going to be actually rolled out? And we're still waiting, as you said, we recording this just before Easter. We'll go to air as soon as we can, but but the reality is it might be between when we're recording this and when we go to where with this we will know.

Veronica Morgan: But at the moment, what property managers are facing lots and lots of questions lots and lots of feed from people who have lost their jobs or and that goes for landlord and tenant says you have, you've mentioned but no answers and, and it's like, we will want to help you. And so that's, that's extraordinarily draining from them because also property managers haven't typically been you know, they're not the property manager. Part of a business is a very different part to the sales part of the business. You know what I mean? They're not necessarily on the front foot with all this sort of stuff in a way of sales might need to be traditionally. And typically I'm waiting in a difficult area. You might pull me out of these Meyer. I'm better.

John Cunningham: You're right, you're right, Veronica, because what it is, is it's, it's the actual detail of, of property management mostly built around process. So here's the things that you can, so, you know, there's rights and obligations for landlords as rights and obligations for tenants. They understand those elements of it. In the sales space there's so many so much broader implications in relation to how the property is, is to release the property so that the breadth of knowledge is definitely without a doubt, a different space right now. The, the reality is that they're living in a a whole lot of unknowns. Okay, here's an announcer. This, this might happen. This is what you can and can't do. It's like when you know that, that thing, that assay put out about the financial advice that, you know, it was just like, come on, let's get serious about what's actually going on here.

John Cunningham: This is that people actually go into a negotiation position and that you do understand people's financial position to do that. Privacy act issues, all these things with Atlanta. And so I want to actually see the information that we have to get the tenant to do that. We're not providing financial advice, we're just providing links to all the things you can do that the government have told you you can do. You know, it's, it's, it's a crazy space and none of it's been legislated except for the public. Yeah. Space issues. There's nothing been legislated. And so therefore, until the detail comes out and we know that the detail, the devil's in the detail not only with, with what we're talking about, but with the commercial rents code with the job keeper program, the, the devil will be deep in that detail as to what is and isn't allowable. Even the $10,000 state government grants to small businesses, you don't want to detail a lot of conditions attached to it. So it's great. We're making statements and announcements. Everyone thinks, Oh God, the government's doing something. But yeah, let's see what actually comes out of the detail.

Veronica Morgan: And of course, the issue with property management businesses that your revenue is falling as well. If you're into falling you know, you're doing more and you're getting pilots like we all are. And I think that's, that's the thing. If we all pull our belts in and that goes for landlords and tenants and, and, and sort of all right the way through the whole chain, then we can all get through these. We all share the load. And I think that that's sort of an interesting you know, there's a lot of people that do have that mindset around this and I think that's really healthy and you know, we're all doing our bit and our businesses in terms of that as well in terms of our staff, et cetera, et cetera. But and I think the government stimulus in terms of what they've come out with from a business point of view is, is helpful as well.

Veronica Morgan: Cause it takes the pressure off business owners from sort of worried about how are we going to survive this next six months. You know, we're going to get support, we're all going to get support. So I think, you know, these announcements, whilst we don't have the detail is somewhat reassuring in the sense that, okay, help is at hand. We will get there. But I'd like to pull out just for a bit in terms of the bigger picture, because I know John, you know, the, the pathway to professionalism and looking at well agents stepping up to becoming trusted advisors to becoming professionals. We all know that really there's still only going to be a small percentage of the, the real estate agent population that will step up and will take on this. I think you said 20% is expected. This is that fair to say?

John Cunningham: I would think if you, if you create the right environment for it, yeah, that's my expectation. But at the same time, it's, it's a really interesting situation that we're currently in to see what impact that has because everything that we're currently doing has been regulated to where you must comply when you go into actually applying some professional standards. It's a choice. And that's the interesting thing about our industry in relation to its willingness to police itself. It's never done well at that. And it's an opportunity for actually for the industry to grow up in my view to actually achieve that. So coming out of again of this, this regulated space I look at Sweden versus Australia again you know, I would suggest in Sweden, yes, that they would be smart enough to do that. I think Australia still is a, it's a young country, still has a bit of a teenager mentality to it.

John Cunningham: And I think we've still got a while to go. Will we attract that 20% out of this coming out of covert 19 crisis? I think a lot of things of that nature, I go to get tighter into a core group of really good people. And you, you know who they are chronically. We've met them. Those people will always, they're running great businesses. They, they, they've been part of their communities. They, they, they provide great service. They've got great knowledge. So all those things and those businesses will thrive as a result of coming out of this because they've set their businesses up to understand being agile being innovative to adapt really quickly. And Charleston will be proud of us. I think

Chris Bates: On the actual purchase side though, I think when I've been looking at listings we've been there, they're getting advertised a little bit differently, right? So I'm seeing some that are priced on requests. I'm seeing call the agent, I'm seeing expressions of interest are still seeing price guides. Do you agree, John, that the way that they're positioning, even just shopping price is, is kind of gets shown on properties, is things changing in terms of how you're marketing the properties to create that sort of smoking mirrors uncertainty around the price to correct competition, et cetera. Like if things changing there, John,

John Cunningham: What I've observed in the last couple of weeks is a complete mash of the way people are seeing the way to how they're interpreting the best way to market properties. So we've had, we've had a similar situation in our business saying okay we've, we've, we've always done price guides or we've done fixed price. So we call that in our business asking price. It's like that's the asking price. It's the, you know, yeah. 1977 revisited. It's, it's, this is what we're, this is what the vendor was asking. So in other words, it's for sale. Then there's the guide, the guide price. We're doing less and less of those. We, we are of the belief that consumer in this current marketplace needs much more transparency and clarity. Let's say transparency, clarity, what do they want? So in this marketplace, I know for example, in Brazil, Whitney have done that.

John Cunningham: They've, they've gone to majority asking price fixed prices. They've not doing any auctions. It's, it's about going well, what does the consumer need right now in my view? And what they need right now is clarity. Let's give them as much clarity as we possibly can around pricing. So they go, okay, I'm going to make you an offer. I mean, again, it's, it's just back to the future stuff. So it's simple, straightforward, easy to understand. And I, and again, it's what we should be doing as an industry is making it easier for people to do business with us.

Veronica Morgan: Yeah. And therein lies my concerns for the industry to be quite Frank, because I, what I'm seeing on the ground is yes, some agents, like you say, they get it, they go, what does the buyer need? What does the vendor need? How are we actually going to look at the differences in, in requirements on the differences? Although let me tell you, they've always want a clarity. Let me tell you, always want clarity. It's just that the market conditions has been such that they didn't need to have clarity because there was competition. So therefore you know, and they would then determine whatever they're prepared to go to. But now, yes, it goes back to what buyers always want and always value and there's less buyers around. So therefore agents are going to have to, to deliver if they want to sell a property. But I'm seeing a, an inordinate amount of inconsistency around how properties are marketed, whether they're going to go to auction, what really is an auction anyway?

Veronica Morgan: You know, how, what is this online thing or is it a video stream or is it just a bunch of offers that are fielded? On the telephone. Like what, what is this? And it does seem to work. We've gone to the jungle and it's like every man for himself in terms of working out what, how are they going to deal with this? And it does remind me somewhat. And even the open houses, right? You got these ridiculous, are we going to open house by appointment, you know from 1130 to 12 o'clock and Saturday contact us for an appointment. All right, so I'm going to get 10 people get three minutes age. I mean like it's just stupidity of the, they think if they word it that way that they're going to get away with it. And it's like no you idiots. It's a change and you need to Intel, they wouldn't do a video still we're saying we need a video before we'll even look at the property cause cause we're all practicing social distancing and I don't want to look at anything unnecessarily.

John Cunningham: If I need to understand about the property and then I'll make a decision, well I'm going to view it and I want to understand that I'm the only person doing it. And one person at a time.

Veronica Morgan: Yes, exactly. I've moved into a, into an inspection where I made an appointment and the next thing I turned to walk into a room and there's people there and I went, I've got to leave these house because we're actually breaking the rule. Don't you get it? You know?

John Cunningham: Sure it is. I'm just blown away by what people think is acceptable right now. It's straight straightforward. It's black and white.

Veronica Morgan: I mean it's like auction quoting legislation. It's the same that you and I have always been in rooms that REI new South Wales runs these, these road shows. And we sit there and there's room full of real estate agents all learning about new legislation and the questions I put their hand up to paraphrase, excuse me. So how can I get around it? And that is basically the time of a lot of the questions in those rooms. And these are people actually going to the road show.

John Cunningham: Yup, yup. Yeah. They're the ones that are actually smart enough to go those that don't. And that's just the nature of our industry. It's opportunities to industry. And again, people are looking at the moment you know, it's like, okay, what can I control? What can I do? I get that. Okay, I'm, I'm, I'm going, going with that, right? All that other stuff that's out of my control. I'm not going, but so many people are living in that space. And, and this is, these are the same people that want to find their way around it, work with it which is in your control, right? So here's the new thing. So this is how we're going to do it, right? We're going to have a viewing. So when people book or we go, okay, I've got to attend to 10 past, attended 10, 10, 10 my next one I'll do at 10, 15 to 10, 25. And so therefore I'm going to be making sure I've got gaps. But if that doesn't fit in, I'll come back at three o'clock, or whatever it is, you know,

Veronica Morgan: Help him. He's like, John, 10 minutes is not enough for most people to properly look at a house.

John Cunningham: We're only allowing 10 minutes.

Veronica Morgan: Right? So you then say, right, let's it out.

John Cunningham: We've done all the preliminaries, video walkthroughs, all the, all the things that they can do. And this is the quality of qualified buyers. So we say sellers, we are only taking qualified buyers through. So there's qualified buyers go through a series of five questions to understand what their current place is. Other words, are you ready, willing and able to buy, taking neighbors through looking at properties. We're not taking, we are looking after our Bendel's health and safety in these environments where we're, we're gloving, we're sanitizing within all these things and we're making sure there's gaps in everything that we do. But the 10 minute thing is also a recommendation of have less time in a space less likelihood of any transfer, no surfaces to be touched. You agreed to that. We'll be one person at a time. You have five minutes and your partner has five minutes. We're just going right to the letter of the law and there's interpretations out there, but we're seriously not going there. And you know, there is, I think the police commissioner looks, for instance, something like 2000 public Dobbins in the last week. That's going to increase last time. We, one's real estate agents, so over the, you know the news,

Veronica Morgan: They'll stuff it for the entire industry and for everybody who wants to buy and sell a house in this time.

Chris Bates: So John, the downsize of markets, I, all my clients generally they're thirties, forties couples and families and so they might be getting their first time or they might be upgrading from one home to another. Is, you know, a lot of conversations I have, I don't really get, I used to get a lot of exposure to, you know, the 60, 70, 80 year olds. Have you had many conversations with them? Obviously they are, you know, all the figures that they're, that they're potentially not susceptible but more likely to, you know, have greater health problems if they get things like this. How are they feeling and how are they approaching to thinking about a downsize? How are their attitudes changing and shifting and what do they think? Because if I was a seven year old, I wouldn't wanna list my property and have randoms walking through my property. Right. So how are they dealing with things?

John Cunningham: Yeah. Look, in our environment, we've got quite a lot of retirees in that space, downsizing. People move into retirement homes, move into nursing homes, all those sorts of things. And right now we've had more withdrawals of people in that space than anything else. So, and that's a big part of our market, a significant part of our market. So we've, we've had to adapt to that situation. Again, asking the question again, what's the most important thing to you? And they're basically saying our health. And yeah, so we can't guarantee that anyone who walks through their home is, is not a, a, a carrier. You know, it's, they're right. They might be asymptomatic. That's, that's fundamentally the issue that that's happened. You know, there's people in that space. So you know, most of those people that have just said, look, when we sort of said, Oh, we weren't doing it for six months.

John Cunningham: And I said, look, suggestion, can we just take this a month at a time, right? We'll keep your property on real estate and domain and our website, but we'll let people know when they inquire, look, this property will currently will be coming be reviewing monthly because of their particular circumstances. People go, Oh look, I appreciate that and we really like to know about it when it does. And then we'll let the owner know, Hey look, we've had a couple of inquiries. They might have a slight change of, of heart you know, go out, go in the back garden. We'll have a really controlled inspection if you do. But, but of course, no pressure. Everyone's gonna make those decisions for their health, number one. But it is, it is, this is all new ways, but again, you can't do that unless there's trust in a trust at a different level of trust at a level of actual caring trust.

John Cunningham: We're actually caring for their health. You know, can talk sort of being a trusted advisor. But you know, when it comes to the tests, it's who are you actually looking after here? Is it yourself or the person you're dealing with? And that at the moment is being tested fully.

Chris Bates: Have you looked at potentially, you know, I know that some people, we've had Amy on the podcast before your daughter around the styling side. A lot of sellers in the past potentially would have done, you know, half styling. Like I'll still live in the property, but I'll, you know, declutter and style a little bit. But, and when I do the Mac at home, so I still live there, a lot of sellers potentially saying, look, I just don't want to put myself to that risk. I was fully styled the home and I'll go rent something else. Um have you seen that as a solution to that problem or you have people don't wanna leave the house?

John Cunningham: So many nuances on that one, Chris. Some people moving out, renting somewhere, stolen their property. We've just got one of those at the moment. We've got a shift in, particularly for the stylist perspective, they're going off how many places we're going into, what we're picking up, dropping things off, which we've sensitized that, all those things. But when we pick it back up safe is it? So with the concept of partial styling has gone through a, a complete overhaul to where we're having styling kits where they'll, the styling kit will be delivered to the property, the owner will install them based on the photographs the stylist has provided as to where they should go. And the, the request is that they do these, this styling when someone's coming to view the property, but it all goes into back into the bag when it's not been used, in other words not being lived with.

John Cunningham: So again, it's, it's adapting to a new way of doing it. And when it's picked up, it's, it's put out in front of the property. It's picked up safe. It's taken back to the warehouse. It's isolated for, for three days before it's touched. So this, these are all things that have had to be developed to, to do things along the way. And so we do a thing called photo shoot style as well, which is where we actually sold a property. When they say attended in there or, or it might be young kids and we're not gonna all leave the stuff there. We'll actually do a, a styling that will be useful in photographs, but it's taken out of the property is then explained to buyers. This has been shot with a bit of style and this is not how, how it's been liquid.

John Cunningham: So that is a, is again, another thing where it would be a controlled environment. So everyone is taking that safety, well not everyone, most people are taking the safety first approach. We still got some people say that this is all bullshit, you know, excuse the French. And, and, and just living, sticking their head in the sand. And you know, of course you're going to get those the Americas follow them. But it's, it's just again, us adapting to, to everyone. And what their needs are. And on the bike ride giant, I mean, you know, a lot of problems I have when I was buying

Chris Bates: A property with a buyer's agent is I you know what, it's made friends with a real estate agent. So it was very forthcoming with information. You know, and I think you can do yourself a lot of damage potentially by doing that, but you've got to do it to a certain level with these sort of one-on-one sorta open, you know, one-on-one with an agent. And potentially you know, being able to ask them, asking you a lot more questions and they potentially would have, what are some of the advice you'd give to buyers in terms of a looking after their own interests, but B making sure they don't shoot themselves in the foot.

John Cunningham: Look, I think the important thing for buyers at the moment is to understand that you know, this, this could be seen as an opportunity for them to be in control of what's going on. The reality is I'm the only person who's actually in control of the whole thing is to sell up because they'll make a decision to negotiate or not. The buyer is basically in a place right now where the information they supply, the agent really can't be used in any way other than to assist the agent and knowing that they're serious. So again, why we're seeing it probably terms of volume, more buyer's agent activity now than before because there's a, a layer in there that the of of I suppose the surety that that puts in that place because of the behavior of agents in the past.

John Cunningham: But I would, I would not be giving any advice to buyers that number to hold back. I think agents are really looking to, for people to work with to put forward off market opportunities to put these changeover things into place. And you'd want to be in that realm if you're an actual ready, willing, and able buyer. I think at the moment you, you want to give as much information to the agent that will enable them to say, you are ready, willing and able to buy. I'm going to work with you. It's, there's going to be a request for actually certainly see your, your loan approval. I had heard of that, but I don't think that's, that's to that level. It's like, Hey, have you got a preapproval or you read their act if this was the right place, what sort of timeframe are we talking about? All that sort of stuff. So I would be just really open if I was a buyer at the moment to saying, okay, what's the needs? And I think, you know what? They're also going to find out they're going to find out who the genuine agents are and who, who were the shallow agents. It's really going to be obvious in this, in this current market place and those agents who are not abiding by the rules immediately be wary of.

Veronica Morgan: Yeah, it's, it is immediately obvious certainly to us. And we have been having lots of discussions internally around that. You know, those, those agents that are giving their vendors and buyers a calm guiding hand versus those that are alarmist versus those that are doing the smoke and mirrors thing versus, you know, it's quite phenomenal. And then there's those that actually act like spoiled children when you don't give them what they want and make their life easy and Oh, it's quite modifying. And I'm like, yes, I know you're under a lot of pressure. I know you want the commissioner in your bank. I know that, but that doesn't mean that we're going to pay you whatever price you think. And it doesn't mean we're going to pay you whatever. It costs you a window. Things, you know, we're going to make our own assessment and guide our clients accordingly. And yeah, some of that petulant behavior has actually been rather interesting, I have to say to observe and I think, Oh, you don't belong in this industry really because this is, these decisions are far too important for to have someone like you trying to influence the outcome.

John Cunningham: Yeah. Look, it's, it's that entitlement behavior that, that really irks me. And I just don't know where it's come from, whether it's upbringing or what, or what it is or whether it's how they've been trained in the industry, but just blows me away, blows me away. This, this is no one's entitled to anything. It's, it reminds me of of a quiet, I think it's Abraham Lincoln, but don't quote me where it was said freedom is not a right freedom is a reward or a gift for honoring and following the rules of the land. And therefore it's like your real estate license, Euro's that license is a, is a gift for you. And if you get the freedom to act in that space, so long as you abide by the law and the laws quite clear. So, you know, there's ducking and weaving and bending and smoke and mirrors and all that sort of stuff that's happened in this industry is appalling because it's, it's just an abuse of the freedoms that we have.

Chris Bates: So on the seller side you know, I think anecdotal and Veronica you'll see this is on a little bit, you know, guiding buyers who are going directly to buyer's agent, which are going, looking at properties or they're going themselves. I'm hearing it second hand a little bit, but it makes a lot of sense at the moment for off-market transactions from a, you know, an outsider's point of view, a, because you stop lots and lots of open homes, you know, you potentially get the sellers, the vendor price fast without all the uncertainty. Are you seeing, you know, potentially off markets rising as percentage of your styles? Are you potentially encouraging that? And Veronica, I guess on your side, are you starting to see agents

Veronica Morgan: Yeah, absolutely. I mean, that had already changed. We were seeing sort of coming out of the downturn, you know, 20 to 30% of transactions.

Veronica Morgan: The agents were saying 20 30% of the transactions were off market or pre-market. So it's just a different way of actually listing the property, to be honest. But now of course, there's a, there's a much greater impetus for people to actually list their property off market rather than invest money in marketing and, and expose it property when potentially they might wait until the end of it. We'll see. So yes, and it was also, the conditions are perfect. They're right for off market. I E can only go through by appointment. And no, no real options. So yeah, we're certainly seeing it. In terms of where the agents are coming to us with property and, and John is at the same at your end.

John Cunningham: Look. Absolutely. you know, the concept of off-market, I've had a bit of a thing, BMI bonded about it for awhile. That they're actually on the market. They're just, it's just fate

Veronica Morgan: Know I call them fake ones and real ones, they draw the real one, but the most of them are fake. Yeah.

John Cunningham: Well, you know, w we've sort of changed the terminology around and you know, it's, it's four Cunningham's qualifies. That's, this is when we're bringing early qualified buyers through a property that hasn't actually been put on phase one, which is going to the web. So as soon as you put it on your website, it's on the market. It means it hasn't got to that point. It's, it's hot buyers basically ready, willing and able buyers again, why we're building the list, build the list, the list. It's pretty simple. Consumers want to see that list. They wouldn't want to send that list, but that list has to be real. It's gotta be acted on. Yes, Krista numbers are increasing and will be far more important in this current environment. Particularly with that bunch of vendors I talked about that are sort of saying all okay, if the right buyer kind belong and the right conditions would you sell? Absolutely will stay. Let's say in this, this pre-market phase, let's sit here. We're only going to bring serious buyers to you, but you've got to have an agency. You gotta have a contract and there in lies another problem. This environment is going to be rife with illegal based showings. 

Veronica Morgan: And just to make that clean. That means if you don't have an agency agreement, you don't have a contract of sale, you don't mean to be showing the property. We are often going through properties where there's no agency agreement, there's no contractor sale. And I, you know, I just scratch my head because the contract to sale thing is important from a buyer's point of view because if you are the only person or you're part of a handful of people and you are ready, willing and able to buy us, as John says, and there's no contract, you can't buy it. And so then over time one of those other buyers who wasn't ready, willing and able, could get ready, willing and able and all of a sudden you got competition there wouldn't have been there had the actual agent had the contract in the first place. So and then there's the agency agreement issue as well and not being straight properties where they, there wasn't an agency agreement. We subsequently bought it to a different agent who actually listed it. And I'm like, well, you didn't have one. So you silly really for showing me through it.

Chris Bates: That's pretty interesting. I mean there's no excuses really. If you're not having a sales contract demand route and he is a conveyance or someone can set that up in 24 hours.

John Cunningham: Really don't tell anyone. You know, the interesting with fair trade there's audit trails all over the place in emails, text messages, phone calls to people. Contracted stated week after it was shown. It's just a crazy thing and you know, fair trading. We were actually going to do a bit of a blitz on it until his head hit to sort of say, Hey, you know, again, there's a lot of agents who've come into the industry in the last five years or more who don't even know about it. They see rules, don't know the laws and again, it's an abuse of the freedoms that have been given. 

Chris Bates: Well they're probably doing it so they're just doing what they do and then it just keep flooding down. I think you came up with the op market versus on market name. I reckon it was real estate.com today, your domain, right? You're not on the market unless you're out on their portal

Chris Bates: 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 there are a whole lot of stress mistakes that can be avoided. Please jump. Can you give us an example of a property Dumbo? We can all learn what not to do from these stories.

John Cunningham: Um it was, this was a classic early, early last month where a buyer was convinced that the other buyer wasn't, wasn't genuine. And so we went, well, you know, here's, here's the trial, here's a D here is your, your the successful Bible. I think I've been pushed up. They go, okay, well he, we, we, we have an audit trail of all the office, right? So this was a pre auction sale transparent, open negotiation. You're welcome to come in and have a look at them.

John Cunningham: You know, we, we can't show you the person's name, et cetera. And he, I still don't believe that's genuine data's out. I said, well, you've got 24 hours to exchange contract. If you don't, we'll be dealing with the underbidder. Anyway, mucked around, mucked around, mucked around. And then 24 hours up, we said, well, where's the contract? Well, I, I'm, I haven't got it organized yet. And I said, well, the other buyer has been on the phone. They want to pay more money for the property. We gave you 24 hours, the owner gave me 24 hours and you haven't agreed to the terms. And so they're ready to proceed. I think it was 10 or 15 grand more or something or other. The, the, the buyer went, Oh, this is, this is bullshit. Dah, dah, dah. And so we said, okay, well therefore, you, you're, you're we'll send an email to you confirming that the other Bible now be proceeding. So anyway, he, he got the email and then his solicitor running us and said look, I haven't been told about this by my, my client. He hadn't actually told me he was buying a property. So he hadn't even activated his, his solicitor. And he said, look, we can exchange contracts today. And I said, well, it's too late. You know, you, this is what you're done. Anyway, cut a long story short. He ended up buying the property, be paid another $50,000 for it.

Veronica Morgan: I love a like that. No,

John Cunningham: It was a situation where we had the audit, we offered to show it to him, which we do in every situation and you know, unfortunately, you know, maybe we haven't done enough to build a trust component there or there was a distrust before between others. But fortunately he freely admitted it was his, his fault. I love that. John, I thank you so much for joining us. I really appreciate your time and thanks for coming on.

Veronica Morgan: Really appreciate your time again John.

Veronica Morgan: Okay, thanks guys. Bye. Bye.

Chris Bates: We want to make you a better elephant rider. And this week's elephant rider training is,

Veronica Morgan: Well when we dealing with agents of varying capabilities, it's important to know some of the little things that they do and say that might give away that they do or don't have another buyer on the hook. I mean John gave a Dumbo where by, I didn't believe there was another buyer. And ultimately they didn't take action in time and it cost them $50,000. But there are plenty of situations where agents try to, to create a bit of noise and create a bit of FOMO and, and try to get you thinking that there is another buyer when in fact there isn't. So I just wanted to sort of to give you a couple of tips of how to, what to look for. Right. So and usually what that is, if an agent is very specific about another buyer and very specific that it will sell to somebody else or there is somebody else that has made an offer that the vendor is seriously considering, then they will be very clear about that.

Veronica Morgan: And usually around the timing around that and, and the terms. But if they say things like, and these two examples that I've heard recently, one is, well no we won't entertain your offer because someone else has offered more. They might even give you a figure but the terms don't suit the vendor. You know they might want a really long settlement or a really short sediment and the vendor wants something different. Now can I tell you if the dollar is a right, they will work the terms out if any, any time an agent says to you, Oh yeah, there is another offer on, but they don't like the terms. That's typically for me a red flag that there isn't really another buyer there or there might be someone sniffing around but they're not ready. So I wouldn't, I can't think of one example really where the terms has got in the way of a deal.

Veronica Morgan: The second example is where an agent says, well, I've got another buyer talking about an offer at X. Well if the otherwise talking about that offer that other buyer hasn't made the offer and what the agent is trying to use is, is, is use that figure to anchor you up to that offer and they're trying to sort of use this nebulous other buyer that probably doesn't exist. So they're just two examples of what agents might say when they're trying to sort of manufacture the sense of urgency, the sense that another buyer might buy the property, but they're very different to when they ease actually another offer on that property.

Veronica Morgan: Please join us for our next episode. When we interview somebody who is a little bit famous for quoting that property prices were going to fall 40% now you know what we think about predictions. What's really interesting about this interview with Martin North is that we do dig in deep as to the sorts of things that he researches and this is going beyond the headline. This is really looking at what's underlying such predictions and should they be looked at in a global sense or an Australian global sense or should you look at the smaller numbers in a micro sense? And really understand what's going down on a granular level. Now, you might have no idea what I'm talking about here, but you must listen to this episode because it's absolutely fascinating and we'll give you a sense about what the future may hold for property prices in this country. Don't forget, we're on all the social channels. We're on Facebook, we're on LinkedIn, we're on Twitter, or you can connect with us on the elephant in the room.com today, you, the links are all there for you. Please connect and send us a message. We'd love to hear from you until next week. Don't be a Dumbo.

Veronica Morgan: Now remember, everything we talked 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 buyer's agent who will tailor and document their advice to your personal circumstances with a statement of advice.