Tony skinner, David
Tony skinner 00:02
Hi, and welcome to the podcast channel on www.podcastmybusiness.com.au And today we have David from www.Soldonline.com.au How are you, David?
I’m very well, Tony, thank you. Thank you for inviting me onto your podcast.
Tony skinner 00:20
No, look, thank you. We have now conducted over 30 interviews in the last four months or so, on the podcast channel. And I’ve interviewed lots of businesses. And what I like about yours is that you’ve taken a traditional background and a traditional market and many years ago saw the future. And let’s face it these days because of the event, the future is going to be much more online. But what led you to that journey and how did you see so far ahead?
Well, Tony, I think probably I was a little early but I’ve always viewed and I differentiate the word online auctions, a couple of versions of online auctions were a virtual online auction. So we don’t interface with an auctioneer with purely internet bidding. And I just always looked at this as the next logical progression for real estate transactions in this country and in many other countries. The simple fact is that consumers, people who are looking for real estate and people who are looking to sell real estate are online, constantly doing their research. And they’re very, very comfortable online. And I think we’ve proved in Australia that most people are very comfortable shopping online. So it just seems to me to leave the consumers in their comfort zone and let them do the most important part of the real estate transaction. That’s the actual buying or selling of it online as well.
Tony skinner 01:51
Yeah, and that’s great to hear, because what I’m doing for podcasts and setting up podcasts for businesses is quite new. Lots of businesses don’t understand the benefits of podcasts for content marketing and content generation and model business, a digital marketing agency. And I thought, Yeah, what is the future? And how do I participate and partake in that future? So once again, looking after the event, what would you suggest businesses should be doing looking in to change and looking at the future for their business?
Well, depending on what sector you’re looking at, but we’ve already seen what sort of an impact online sales has had in retail, in all facets of retail, and that goes even now for fast food, doesn’t it? So I think any business that is a consumer background, a business to consumer background, has to very quickly get involved in a digital footprint of some description that the consumer demands it now and I think there’s too, too many people businesses that are relying upon the traditional methods of doing their business. And unfortunately, I think they’re being left behind. So every business I can think of needs to embrace technological innovation of some description, to where to remain relevant.
Tony skinner 03:16
Yeah, and I think that’s the key thing about being relevant. And I’ve been doing a few people about this theme. And one of the things is that relevancy and not being afraid of my catchphrase at the moment, I’ve had a few I’ve had don’t panic, keep marketing, which I think is quite important. But go fast. Don’t be afraid to break it and fix things as you go along.
You will exactly and that’s what we’ve been doing for a decade. And we’re still doing it. But I think our industry the real estate industry, is a little unique. Australia, unlike just about every other country in the world, is very heavily reliant upon a real estate agent who stands between buyers and sellers and those real estate So professionals have had a very successful blueprint on how to do business for 150 years. Our transactions haven’t changed for 150 years, you either you either sell a property via private treaty, ie property on it and then negotiate backwards or you embrace some form of an auction. And now all we’re doing is digitizing the most transparent process. And I believe very strongly that we will be able to transfer the auction industry from the traditional metropolitan areas where it’s popular to have on site auctions. We’re really looking at the regional areas of Australia to allow those regional agents who have not been able to enjoy an auction process to actually embrace this digital format at the same style. Hmm,
Tony skinner 04:50
yep. So talking about the event and let’s face it, it’s happened and, you know, we’re looking at what’s next. What do you think overall, the impact has had on I guess accelerating the movement to more online. How’s the industry handled that?
Well, I will preface this statement by saying that the real estate industry has been in the forefront of digital technology for a long time because they were the first ones to adopt so much of their advertising online. And that’s now the strength of the two major portals. It is the actual nuts and bolts of the of the of their business that they haven’t embraced technology. I don’t even that’s the transaction sale. So I suppose the COVID dilemma has forced agents to very quickly look at alternatives and luckily for them, there were some groups in Australia that could offer that alternative. We are just one of them. Now, it’ll be interesting in the traditional areas of real estate auctions, that’s the inner city suburbs of all the major metropolitan cities, whether or not a lot of those agents will continue to embrace technology or whether they will go back to doing what they consider as the tried and proven method of having an auctioneer arrive five minutes before the auction starts and gather a crowd in the front garden and then hopefully sell it and move on to the next one. But I just think with the uncertainty, most of the progressive real estate agents will embrace our technology, our style of technology, to a degree from now on, I think it’s certainly a very valid option for real estate agents to offer potential owners of real estate.
Tony skinner 06:40
Now interesting, let’s look at them from the consumer perspective. You know, you walk the streets and springtime as we started springtime, there’s all these auctions and you drop by and have a bit of a look, and people gather around and there’s a bit of a buzz. Now, I think we can get a lot of that online, but how the consumers react to the differences
look very well. It’s a funny word consumer. Okay. I think most of the industry bodies and governments look at the consumer as a person who is spending the money, not the person who is actually selling a product. So let’s take the buyers for starters, they’ve embraced this technology, excuse the cliché but like a backwater, they really have. Not only are they able to have a transparent platform in which to operate, but they can do it from the safety in the comfort of their own home 24 hours a day for whatever period of time the agent is determined to run that auction because our auctions actually run for days, not minutes. So every buyer I’ve spoken to have, I don’t think any of them have enjoyed the process that it’s a difficult process buying a multi million dollar property but in comparison to other ways of transacting the traditional style of stuff an online platform is been terrific for them. It as a site offers transparency. It gives them more time than the traditional auction. But they’re able to do it at the comfort of their own home, talking to their family and, and getting advice where they need to get
Tony skinner 08:17
At has this led more to people buying outside of the immediate area? On the lower North Shore, Sydney here? And does that allow other people in other areas, especially investors, more opportunity to buy?
almost definitely. I mean, we’ve had rural properties that have been owned by English pastoral companies. They’re based in Queensland, the agents, you know, this is in Central Queensland. The agent was sitting at their office in Brisbane, and buyers were competing for threat from three different states. Now that can’t happen in a competitive environment, using the traditional forms of sale. You either in that circumstance, it would normally be a thing called an expressions of interest campaign where a property is marketed without a price. But there is no competitive style of reading. It’s done in a closed door environment where you know, everything is done in a sealed envelope and then the best offer Windsor after a period of time. So certainly this way of transacting property is open but real estate to a to a massive population. We’ve got clients that are down in the south coast of New South Wales. So I speaking to an elders agent down there this morning and she said that, that the buyers that they get absolutely love the idea of bidding online because they don’t have to leave Sydney to come down to compete for the holiday home.
Tony skinner 09:48
So that begs a question. Are robots the future for real estate agents?
Look I don’t know.I’m sorry. I think that there is there is reasons to expect lots of change in that regard for certain styles of property. So for instance, there’s going to be a different format. Now, I believe buying property off the plan, you know, for high rise apartment buildings. I think there is certainly going to be better methods, of ways of a buyer inspecting a property and not actually having to visit the property. There’s, I think there’s lots of ways I’m not too certain about robots, but I must admit, there is certainly going to be a reason that that a robot potentially could be standing at a front door, taking names and numbers and handing out brochures.
Tony skinner 10:45
Yeah, why not? I mean, I’m just hypothesizing I’m actually more joke than anything else. But, you know, you never know. I’ve met some great real estate agents, but I’ve met some not so great real estate agents just like any industry. So who knows?
So you think potentially a robot could do a better job?
Tony skinner 11:05
Yes. You go, you put me on the spot, I’m gonna give you my direct answer.
We’ll look, this is a couple of things that have happened during this COVID-19 disaster and one of them is that agents have been forced to actually have more meaningful conversations with their potential buyers. For years and years and years, buyers of all people have been able to fret up to an open home, given name and a mobile telephone number, then walk through a person’s private abode, most of whom have got absolutely no intention of buying the property. So So now because inspections have been stopped being open to more inspection by appointment, agents have fun Finally, twigged that they might as well have a good quality conversation with that buyer before they waste their time taking somebody through that’s not even interested in the suburb. Wow. So a lot more qualification is is now happening. And what that’s doing is creating a better base of educated but qualified buyers. So the results have actually been, I think, a little better than pre COVID-19.
Tony skinner 12:16
Well, that I’m just thinking again off the top of my head that sounds like it’s a change from opening the pen to let the sheep out or let the sheep in. So just picking one or two that you actually want.
Well, exactly that’s right. But that same analogy, I suppose what a good grazie will do is certainly I’ll put plenty of sheep in the pen, but what they do is to draft off the best and then let the others go back to the paddock. And this is a way of agents and owners not living in false hype and this has been a major problem with our industry where I suppose less quality Fire agents tend to not be reading the signs of potential buyers to know exactly where they stand in that transaction. So a lot of you know, as an auctioneer, very often we would attend an odd would attend an auction. And I’d say to the the agent, so how many registered bidders are we expecting? And they’d say, Well, look, we’ll certainly get five or six. And then three minutes before the auction starts. There’s one person that originally that’s registered to bid. And the only reason that happens is because the agent hasn’t asked the right questions to ascertain whether there is absolute and genuine interest from from all particular parties.
Tony skinner 13:40
Yeah, that’s a great point. That hopefully it will lead to better advice and better support from multiple agents because let’s face it, they’re roadside agents and used car salesmen are lumped in the same basket and I’ve saved you or work with real estate agents selling properties myself. And yeah, you’ll get one or two good people in the industry, but a lot of them are just in it just straight straight up for the commission.
Well, and look, we’re one of the very few commission based industries and I think there is hazards involved with that style of industry. And you’ve just alluded to exactly what that problem is. It’s it’s the old thing where an agent has to win a listing from an owner before they have any chance whatsoever of receiving a commission. And on occasions, and I’m not saying that it’s, it’s rare, I think it’s probably more often than not, that agents are inclined to give false hope to potential buyers in the hope of listing that property and then rather than using the next three or four weeks of the campaign, working really, really hard to find buyers for the property. They’re spending that three or four weeks trying to reeducate, the uninor to get them more realistic in price, but the price was determined through the agents communication with the agent the three weeks before. So there is certain parts of our industry that are flawed. But there is certainly some very, very good real estate agents out there who list the property at the right level, who proved to the owner, what the market is doing and what they can expect to receive at the end of the campaign. And then they can embrace that campaign and work very hard to get a premium price for the owner. So that’s how a good auction campaign is designed to work.
Tony skinner 15:39
Exactly. I like to say I’ve met some good and bad agents, like any industry as well. But again, if it helps them to be a bit more professional, by actually listening, then that’s got to be a positive thing.
Yeah, exactly. Right. And so the other thing is, too, that we’re in the industry and the industry of auctions for real estate, and I understand A lot of people debate with me what sort of property should be auctions? Well, the vast majority of property could be auctioned, it just depends on the person who is managing that auction campaign, ie the real estate agent, whether or not they understand the fundamentals of how an auction is designed to work. And I’ve always argued that a property sale, it’s far better to start with a number of people who want to buy it and let them naturally compete for it, therefore push the price upwards, rather than to put a price on a property in that price, when it’s first advertised is always inflated, because the owner wants a little bit of room for negotiation. But this is a little bit more about I think, this online research that so many Real Estate Buyers are undertaking. They’re all very educated these days. So as soon as I see a property market with a price that’s inflated, they know it. They know what to do. So that don’t even bother inquiring about the property. So it’s a bit of a catch 22 if an agent doesn’t get inquiry, they can’t then negotiate a deal with a particular person. So I think it’s a very wise idea for real estate agents and owners of property, no matter what the markets doing, no matter whether it’s a buoyant market or it’s a slightly deflated market, to market the property without a price. You know, obviously the agent has to have a good communications and good conversations about price and, and prove to potential property buyers, what that property is genuinely worth. Then they can go into the campaign, finding the right markets and therefore getting multiple bidders or multiple buyers. And I’ve always said it’s it’s a funny thing, Tony, I’ve always said in mind many, many years of training real estate agents, an owner of a property doesn’t wake up one day and say I want a million dollars from my house. What they do, they wake up one day and they say, I want to sell my home, because it’s too big or it’s too small or it’s too close to a main road or whatever it might be, I owe too much money, or I’m getting divorced, there is always a primary reason for somebody to want to sell a property. And then very quickly after that, it’s and I hope it’s worth a million dollars. Hmm. Now, unfortunately, a lot of real estate agents tap into the money, and they don’t tap into the real reason, an owner wants to have a successful sale in a timely fashion.
Tony skinner 18:34
Yeah, and we don’t quite have enough time to touch on the other wonderful thing that I like, and I call them real estate boosters, and every industry has them and real estate is a massive one for that with clearance rates. And I saw something about how that’s coming out. Oh my god. So
well, you know that I write an article once about clearance rates. It’s the greatest fallacy of the real estate market. And it’s so scary to think that so many, so many commentators use clearance rates as a litmus test on how strong the market and in fact, you know, something, that when a clearance rate in a metropolitan area dips very much below 60%. The most commentators believe that the market is in trouble.
Tony skinner 19:25
can I just ask quick quickly? Because I’ve listed properties for auction and, you know, also for private treaty, what percentage of properties are sold by auction and what percentage is sold by private treaty?
Well, this is my rough guess. But I’m pretty close it I think it’ll surprise you in Australia. Approximately 10% of properties are auctioned. So 90% of properties are not auction. Hmm, yeah. And you look at the Metropolitan inner city suburbs of Sydney and Melbourne and to a lesser degree, Brisbane and certainly the numbers are properties, they’re much higher because it’s an auction environment. But most of the regional areas in Australia, don’t auction property. And there’s an awful lot of transactions out there that are taking forever to sell because it’s a private treaty process.
Tony skinner 20:16
Yeah, exactly. So, you know, it’s not the be all end all that. And thank you for clarifying that, that fictitious number, because I sort of told him that I include this. I don’t include that they include this and I put it on the tea pot, and they all drink tea, and then I turn up the tea leaves, and I decide well, that to me looks like 50. That was like 60. Let’s go for 55.
Exactly, exactly look very good. I know we’re coming to an end. But very quickly, most auctioneering companies or most real estate agents do not actually advertise a property to have been withdrawn before the auctions have been undertaken. And they’re only about withdrawn for one reason, and that is that they can’t find any buys for them. They’ll always advertise property to the best right auction as part of the clearance rate, but very, very few companies advertise are ones that should have gone to auction and never got there.
Tony skinner 21:11
Well, there we go, David, we’ve covered an awful lot in a short period of time. Wow, who knew that can be done in such a short period? We can’t we can’t cover everything, but we can get an idea. Like anything else you’d like to add,
Tony. Now look, it’s been a pleasure talking to you. And if ever you think of something else regarding real estate, please feel free to get in touch again. I’ve been in this business for a long, long time. And I have some very firm beliefs. Not everybody agrees with them, of course, but I have some very firm belief. So love to have another chat one day in the future.
Tony skinner 21:42
Great. Thank you so much.
Thank you Tony very much.