The Elephant in the Room Property Podcast | Australian real estate
The Elephant In The Room Property Podcast with Veronica Morgan & Chris Bates

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Episode 4 | How your emotions are targeted before you get to the open house | Kate Lumby, Lumby Hampson

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The secret to influencing buyers when selling lifestyle properties.

Kate Lumby, sales agent, auctioneer and principal of Lumby Hampson in Sydney’s Hills District, reveals the performance art of property sales. In this episode we learn about:

  • The props used by agents to “sell the dream”

  • How she breaks down the barriers between auctioneer and bidder and gets an opening bid

  • Different buyer behaviour and the buyers who are their own worst enemy

  • How the “elephant” affects agents, vendors and buyers

  • Tips for becoming the favourite buyer of both the agent and the vendor and why some people get to buy a property for less money

  • How she recognizes buyers who are in “peak buying mode”

  • The type of property she refuses to sell

  • How an agent’s mindset will impact the sale price

  • The research property buyers should do

  • How good agents lead a buyer to the negotiation table

This episode reveals all the little details that affect the way property buyers behave.

Links:

Lumby Hampson
http://lumbyhampson.com.au/

My Auctioneer
http://myauctioneer.com.au/

Video - How to set your maximum bid at auction
https://gooddeeds.com.au/auction-tips/how-do-you-set-a-maximum-auction-bid/

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 12th April 2018

Veronica: You're listening to the elephant in the room property podcast where the big things that never get talked about, actually, get talked about. I'm Veronica Morgan, real estate agent, buyer's agent, and co-host of Foxtel’s, Location Location Location Australia. 

Chris: And I'm Chris Bates, financial planner, mortgage broker and wealth coach.

Veronica: And together we’re going to uncover who’s really making the decisions when you buy a property.

Chris: Veronica will introduce our guest in a moment, and I can tell you that you’ll want to listen to find out what he has to say about the whole property marketing process being a performance. 

Kate: For an example, the other day, the the lady had two young children and she’d ideally she was looking at having ponies, we’ll we knew the neighbour had some ponies so we got the ponies put in the yard. 

Chris: Please, stick around for this week's elephant rider boot camp and we have a cracking Dumbo of the week coming up.

Chris: Before we get started, everything we talk about on this podcast is general in nature and should never be considered to be personal financial advice. If you are 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: This week we’re picking the brains of Kate Lumby who is principal, sales agent and auctioneer of her own family business in Dural called Lumby Hampson. 

Kate’s parents started the business in 1968 so she’s effectively grown up in real estate and along the way she’s collected a host of awards and a husband which meant that she had to change the name of the business, right Kate?

Kate: That’s right.  

Veronica: He’s the Hampson.

Over her two decades in the industry her experience has encompassed sales, developments and acreage, very different to the inner city area in which I operate.

And it’s still rare to find female property auctioneers so we’re especially keen to hear her insights and whether she thinks being a woman makes any difference. Welcome Kate

Kate: Hi and thank you, thank you for having me.

Chris: Welcome Kate, we were just chatting just before when you arrived and it kinda made me think, is an auction a performance, is there a lot more to it than just people putting their hands up and auctioneers taking bids?

Kate: Yeah look it’s a great question. 

Auctions are a well-run event and you really know the outcome most of the time well and truly before the day. 

So from a performance background I think if everyone knows their job and role, from the moment the buyers walk in and they’re greeting them with genuine warmth, um making them feel special...

Or as most of the cases being, certainly if you wind back the clock ten years or more ago, a lot of buyers felt like they were, you know treated like second rate citizens. They didn’t get called back you know they were were made to feel like they, you know and and that’s where the buyers we know are the sellers of the future...  

Veronica: Not everyone knows that, though, do they in the industry? (laughs)

Kate: Exactly, it’s the number one thing that agents don’t do tend to do very well.

Chris: Yeah, that’s true, yeah.

Veronica: You’re out in in the Dural area Kenthurst you know, you’re dealing with... 

Kate: The other side of the bridge.

Veronica (cont): The other side of many bridges in fact...

So dealing though with very much of a local buyer I would guess, would that be the case? 

So in terms of those relationships on going, there’s much more focus on much less of a transient type of buyer or a type of population would that be the case? 

Kate: Yeah it’s pretty fair to say.

Well like certainly over the years you look at the hub of the Hills district and that North West sector, in the acreage market people went there and there was a lot of industry and agriculture, where all your parsley and cabbages came from and I guess I was sort of privy to that from a very early age and and just grew up with that whole genre of real estate.

But of course the re-zonings and they’re actually now getting a railway station out there, the whole area, I guess, has undergone a massive re-gentrification, so you’ve got a lot of smaller blocks that have come in.

Veronica: And so your background is that you did performance at school and,

Kate: Yeah yeah yeah

Veronica (cont): Then you got into sales in the family business, then you diverted into auctioneering solely? Was that the case?  

Kate: Yeah so basically from leaving school I opened up a drama school, speech and drama. 

can we fix the cut hereAnd I really didn’t feel like I wanted to go straight into real estate. I just felt that I wanted to do my own thing. 

And then with mum and dad I guess, more into their retirement, talking those sorts of things...

Veronica: Handing over the family business, the reins...

Kate (cont): Yeah I thought, hang on I’ve gotta do something here so, I’ve jumpedcan we fix the cut here into selling and it was right in that time where you just literally couldn’t get the contracts dry quick enough, and people were making ten, twenty, fifty thousand dollars within two weeks, four weeks...

Veronica: When was this?

Kate (cont): This was ah, this was pre 2000, so before the boom.

Veronica: Right.

Kate (cont): But it was when the development all started to happen out there so it was sort of like about mid-nineties. Of course the building going up there was very affordable at that time you could sort of buy a brand new “McMansion” out there for five, six hundred thousand, where they’re now sort of one point five, which that’s the first home buyer bracket still almost now. 

Veronica: Nuts isn’t it.

Kate (cont): Yeah.

It was never about the dollars for me. It was all about how can I help people and I really believe it’s an honour to sell someone’s home or to represent their home because it’s representing their family.

I think agents tend to make, I don’t want to say make a mistake, but you walk into someone’s home and you’ve got two choices. You can see bricks and mortar as often people do, or as I choose to and always have, the respect for the home and the family, and I think that transfers also to the buyers. 

Chris: Just while you’re there, there’s a a behavioural bias that we value things that we own more than if someone’s else owns it. 

So when you’ve got a very strong emotional attachment to it how do you think that that plays out to people, the owners, over valuing potentially what they own, and how do you deal with that as an agent?

Kate: Massively. You know, somebody said to me the other day, a potential seller and looking to buy said “oh Kate I’d like to like to buy in low and sell high” and I said...

Veronica: Of course.

Kate (cont): Said to him “oh you know I’ve never heard that before.”  

Veronica: laughing

Chris: Warren Buffet said that once yeah.

Kate (cont): There’s no doubt, particularly in the rural sector, you’ve got like these properties that they’ve literally owned for twenty, thirty plus years...

Veronica: mmmm

Kate (cont): Could even be second generation and the blood sweat and tears that has gone into it... can we fix the cut hereOf course when we go in and we educate them around the market which, these days, there are so many tools for buyers and sellers to be able to do that. Far more than there ever has been...

Veronica: Yes

What do you use?

Kate: Well I think the big one is realestate.com, domain for buyers and sellers. They can easily access and look at um, and I think that’s where more than that it’s like going and seeing a jacket on the rack or or seeing something where it’s in a department store. Like if you don’t try it on and that’s where I think,

Chris: mm-hmm

Kate (cont): All buyers and all sellers should get out there and see more property.

Veronica: Yeah

Kate (cont): And go and attend auctions,

Veronica: mmm

Kate (cont): So they feel confident.

Chris: I one hundred percent agree. It’s actually going out and looking at these properties that actually you can really get comparables, because you know there’s so much more to it than just the just what it looks like on the tin.

Veronica: On the tin (laughing)

Kate: And the way the photographers make it these days it can either look, you’re going to get a shock when you get out there or it could be the other way around as well.

Veronica: Yeah

Kate (cont): That looks better in real life than it does in the photos.

Veronica: So you’ve got particularly emotional vendors in your area because of that history and all that emotion, all that family invested time and memories and all that sort of stuff that they’re parting with.

And then you’ve got buyers coming along that aren’t necessarily as emotionally invested, you know obviously they will once they buy it live in there themselves. How do you then get a match between the two?

Kate: Well I think that I’m probably a bit more spoiled in that area because with the acres we’ve got a lot more things, I guess, on there, versus say a residential. 

Veronica: Toys to look at...

Kate (cont): Yeah 

Chris: laughing

Kate (cont): So I always love to connect with the land. With the with the acreage you can get, of course, arable land but of course you can also get where it might be partially bush.

If there’s an opportunity to pick up a rock or a stone and throw and and roll it down the hill, into the escarpment, that’s the sort of thing... 

Veronica: So you stand so you stand on the on the edge of the bush and chuck or hoik a few rocks in? (laughing)

Kate (cont): Yeah it might be that um...

Veronica (cont): Do you go “cooee”? (laughing)

Kate (cont): I know it sounds odd but we actually would if was that type of property...

Chris & Veronica: Yeah

Kate (cont): If there’s bell birds around or, I have one at the moment that’s got bowerbirds.

Veronica: Yeah

Kate (cont): If there’s tractors or there’s ah ride on on bikes... It’s painting the picture for them to actually see. I think you’ve got a lot more to be able to do than, say for an example someone imagining where their furniture is going to fit in a residential.

Chris & Veronica: mmm

Kate (cont): Because it’s a lifestyle.

Chris: mm-hmm 

Kate (cont): I guess if you’ve got, you know the the opposite, if it’s instead a tree change or if it was a sea change, a similar sort of thing. 

Veronica: So you’re really telling a story or painting a picture and really going to a lot of effort, I guess, or a further extent than say a transactional agent, you know, who is just selling an apartment or a house in a standard lot.

You’ve really got to go there and create that whole magic around that.

Chris: Do you actually use props? Have you ever dragged some sheep in and got some horses in?

Kate (cont): We actually got do, yes.

Chris: Yeah wow 

Kate (cont): I think it’s critical to understand the buyer profile as much as you can. 

What are their needs and wants. And for an example one the other day, the lady had two young children and she was looking at having ponies, well we knew the neighbour had some ponies so we got the ponies put in the yard.

Chris: mm-hmm yep

Kate (cont): Um you know do we put bird seed out when we know that we’re selling? Absolutely we do.

Veronica: Yeah

Chris: So auctions are a fascinating thing, they’re a very emotionally experience, both positive and negative, for buyers and sellers. What made you take a leap out of sales and focus a lot on auctions, and then obviously getting back into sales, what about auctions do you love and what excites you?

Kate: Well for me it was always like we predominantly sold by private treaty and the Hills district was predominantly private treaty.

And I had a lot of real estate friends in the inner city who would only auction and we would talk about the differences. And I would always say the objections, which are not as common these days, like, “auction doesn’t work in our area, people don’t want to pay more…”

So I guess I went on a journey. Probably for me it was at the height of my career from a sales perspective I felt that I was young enough to go, ok let me something that hadn’t been done at that stage.

I did meet a lady that told me she had auctioned a property, you know ten years prior, so I wasn’t officially the first but I know I was the first female in there and certainly to have my own auctioneering business, My Auctioneer. I remember one of my good friends said to me “oh it’s really hard being young as an auctioneer”. This is like fifteen plus years ago and I said “well try being young and female”.

Chris (cont): obviously there’s challenges, it’s a male dominated industry and etc. Have you found that actually to be the case though? It’s actually been more challenging? Or have you found that, well maybe it is a little bit more challenging to them but I can use this to work and I can use humour, I can use...

 Have you found that being a woman actually helps?

Kate: I think it works both ways. Like getting getting the jobs...

And I guess from a real estate background I had that prospecting mentality so, and I wasn’t scared to hear “no”. So I’d knock on doors, knock on doors and they’d say “no I’ve got an auctioneer, and we’ve been using them for twenty years” and of course the traditional look of an auctioneer was not somebody turning up in a skirt and and jacket you know.

Veronica: (laughing) Is she wearing a red tie? 

Kate (cont): (laughing) Yeah and be ah yeah

Veronica (cont): Wear a gavel pin on their suit, on their lapel...

Kate (cont): That’s right. 

And I think that the the type of auctioneer has changed a lot more too. It’s certainly not you know if you look at where auctions were used like twenty plus years ago a lot of the time it was used for mortgagees and it was more the role I guess more of a bit of a more dictating role like “oh no I’m not going to take your bid” or “this is the way we’re going to”. 

And I really deconstructed that from a performance background and went, ok well these people are so nervous coming here. This is not something they do every day of the week, this is something they might only do once or maybe yeah once in a lifetime and you know I used to watch the buyers and because I pencilled for two years, so that was my, that was my start.

Veronica: And for those listeners who don’t know what pencilling is that’s that’s the person that’s stands there writing down the bids.

Chris: (laughing)

Veronica (cont): So that there’s a record of what those bids are.

Kate (cont): So I was a pencil girl and what I used to do every single auction I would pretend I was calling, in my mind I was the auctioneer. So whilst I was pencilling, in my mind I was filling in the words, I was listening, and I was watching. Obviously this was prior to registrations too...

Veronica: The old days.

Kate (cont): Yeah. Obviously, you know, that that’s been a wonderful thing I think for our industry too. People can see who they’re bidding against now.

Chris: mm-hmm

Kate (cont): Whereas they didn’t know where, so like a lot of industries, it’s come become a lot more professional.

Chris: So those buyers that have rocked up and they, they might do this the one time in their life...

Kate: mmm

Chris (cont): These guys have no idea what they’re doing, there’s maybe the first time they’ve ever done it. 

Kate: mmm

Chris (cont): What are some of the things as an auctioneer that you kinda do to help them feel more comfortable and I guess start making offers?

Veronica: Start spending their money (laughs)

Chris: Yeah! (laughs)

Kate: Let me answer that two fold.

If it’s me as the auctioneer and I haven’t been the sales agent on it, the very first thing I want to do as the auctioneer is I want to know well and truly from the outset, who are the best buyers? Tell me about them, what do they do? Where do they live? Why are they looking at it? What do they like best about it?

Because if our top three buyers, for example, like it because, you know, the park or the big backyard, whatever they like about it, there’s no point talking about it being a great investment. But if the top three buyers are looking at investing then of course that would be where I would be positioning it.

So knowing the buyers as well as I possibly can, even their names, because they don’t know me and I haven’t met them, so on the day just before the auction I want to go and meet those top buyers...

Chris: mm-hmm

Kate (cont): Make them feel comfortable even if it’s me giving them the bidders guide, as a reason to talk to them. It allows then I guess to eyeball, feel a bit more comfortable and also allows me to ask them, you know, is there any questions that you have before you start? And trying to take the edge off I guess.

Veronica: Drops the barrier...

Kate: Yeah

Chris: mm-hmm

Kate (cont): And often people will want to put you up on a balcony so they think you can be seen. From a performance side of things, you want to eliminate barriers and be on the same level, I believe.

Chris: mm-hmm.

Chris (cont): And so you’ve got these buyers and they’re getting more comfortable...

Kate: mmm

Chris (cont): What are the some of the things that you get them just to just start making that first bid, ‘cause that’s the hardest bid right? 

Kate: I always like to try and do the registrations or be part of that process, because I get to talk to them and I’m noting down their details.

So when you’re taking someone’s name and you’re doing those details, and their child might be near them and you’ve got that opportunity to sort of connect a bit more.

But also too, things like, as small as, and I know you guys wanted to delve you know as deep as you can... It might sound cheeky, it might sound a small thing, but even the bidders registration number. We don’t have to give a sequential number. 

So Chris, for an example, I’m not going to ask you your date of birth, but if your birthday for an example was on the seventh or the ninth I’d give you bidder number seven or whatever’s appropriate, and often people...

Chris: mm-hmm. That wasn’t a coincidence.

All: Laughing

Kate (cont): And people actually will go “ah that’s my lucky number, how did you know?” 

Veronica: I’ve just looked at your driver’s licence!

Kate (cont): Driver’s license!

All: laughing

Kate (cont): And at that that point too I can ask them, “Chris you’ll start me off?” And they might go, “ha ha”. “You know start me off?” 

Chris: mm-hmm

Kate (cont): “It’s often the person, the first buyer that starts will be the the winner, so start me off?” And I’ll ask everybody that.

Chris: mm-hmm

Kate (cont): But not if they’re lining up (laughing).

Veronica: One of them will do it surely? (laughing)

Kate (cont): But what tends to happen is just by asking, that if we don’t ask, then when you ask and you’re at the auction, of course not everybody rapidly fires at you but it certainly does make a huge difference, I believe in there to getting that opening bid.

Veronica: That’s interesting isn’t it that inherently we’re all probably a little bit polite so if we’re asked for something we might be more inclined to to respond.

Chris: Especially if there is a connection to you from the start.

Kate: You gotta, you gotta ask for it

Veronica: I’m I’m a bit curious, ‘cause on a Saturday... So I know my own schedule on a Saturday, for instance, and I know what it’s like in the inner suburbs of Sydney, and its mad and the auctioneer was often running late ‘cause they’re stuck in traffic and then they’d get there they’ve got five, not even five minutes, a minute really to do a quick tour of the house. And agent quickly briefs them and obviously they work together so there’s there’s a bit of a shorthand that goes on, but they don’t have a lot of time to get up to speed. 

It sounds like you have a lot more time to actually settle into the entire performance of that auction ie) you’re there for the open house prior, then you know the registration, then through to the auction, what would that be fair?

Kate: As much time as obviously possible and and I guess that when Chris asked me in there, like what made you go into auctioneering that was another reason as well because, and I remember very vividly, this particular property, it was over a hundred and forty squares, and the auctioneer turned up literally... it was on one of my own properties this is prior to me getting into auctioneering.

Veronica: mmm

Kate (cont): And they turned up like literally five minutes before and like ran up the stairs, he’s you know, ran round the house and I’m thinking, to connect with a property and it doesn’t mean you’ve got the luxury of an hour before and all that sort of thing, and you do get to see a lot on on the internet through photos and floor plans and… Google maps and that sort of thing.

 But I think that it’s a very big thing for someone to sell their family home and... 

Chris: And to buy it.

Kate (cont): And to, of course, buy it. Yeah exactly.

Chris: I mean you mentioned there about the the agent rocking up five minutes before...

Kate: mmm

Chris (cont): And, or the auctioneer, I mean.

Kate: mmm

Chris (cont): And they can’t really get connected to the property.

Kate: mmm

Chris (cont): What’s your view on auctions in an auction house,

Kate: mmm

Chris (cont): Versus on site and... 

Kate: Oh I always think it’s better to see it, touch it, feel it. 

I think from a buyer’s perspective if they’re there and there is something that they particularly like about it, might an aspect, might be a pool, might be a view, it might be a room, it might be windows... If they’re watching it on a screen, it’s certainly not nearly the same sensory level as being in a room. But there is school of thought I guess around with the with the rooms, and I do think there is a place for rooms, you know when you’ve got a crowded room.

So I think that’s another area with auctions that makes a huge difference to the result is if you have got a crowd like a busy restaurant.

Chris: mm-hmm

Kate (cont): You don’t go into the one that’s got you know no one sitting there or one person, you go into the one that’s crowded, and I think that creates in itself interest even if there’s only two or three buyers there.

Chris: mmm

Veronica: Yeah its...

Kate (cont): You’ve got a hundred people...

Veronica (cont): It’s the smoke and mirrors part isn’t it, it’s like they don’t know that all those people haven’t registered and and it actually always amazes me that people don’t, or bidders, don’t go and watch other bidders register.

Chris: mmm

Veronica(cont): And so you know and they rock up the last minutes ‘cause they’re sort of worried about their own game, they’re not actually pulling themselves you know the helicopter effect and pulling themselves back and thinking ok this is a whole, whole thing going on here I’m not the only cog on this wheel.

And, then they’ll rock up last minutes after they’ve been playing silly buggers trying to pretend they’re not interested and they’ve got no idea who else is actually registered or if anyone indeed has. And the agent can take advantage of that by pretending they go up to chat to all the neighbours during the auction.

Kate: Yep

Chris: Yeah I mean I say that with clients looking at at considering bidding on a property or even going to buy something. I think just go to the open home get there fifteen minutes before stay fifteen minutes after, it’s an hour out of your life just to to actually see who’s actually going through the place, not just rock up two minutes go through. Same at an auction you know you want to be there early you kinda want to know exactly what’s going on.

Kate: Definitely you wanna see who the bidders are and where they’re standing too ‘cause often it’s always the best buyer’s stand next to each other.

Veronica: It’s so weird that isn’t it. (laughs) 

I often find that myself, quite quite incredible.

And in fact ‘cause I’ve been around longer than registration as well and when I first started in real estate I used to go to auctions and I would just try to learn. I was learning to read body language and I was watching people in the crowd and I’m trying, before the auction started, trying to pick who would bid.

And that’s how I started teaching myself how to read read the play or read the room.

Kate: What what a great sport.

Veronica (cont): I found it fascinating for starters but it was very interesting because you did find that, now of course I had no idea in advance like now I do, I watch them register then I see them go and stand next to each other.

Chris: One question herecan we fix the cut here just around selling properties that aren’t inner city, for example selling a terrace in Newtown it’s very easy to say that one across the road sold for two point one, three weeks ago this one’s gotta be worth a lot more...

How do you think that plays out where you are, you know, in getting those comparables... 

Kate: mmm

Chris (cont): How do you think that that really affects the whole market up there?

Kate: Real estate, we know, is all about supply and demand so if you’ve got ten buyers that are looking for that particular product, if it’s a premium property or it’s got everything that ticks most of the boxes, um, obviously the greater the interest is going to be.

And you know, and I think that’s where that price conversation comes in, you know you put a price on it, who’s to say someone wouldn’t pay more? And I think that’s where  auction does give that opportunity to showcase the property, get those buyers into competition and of course then it’s for the owner to make a decision on whether they want to trade at that level or not.

Veronica: So the Sydney wide clearance rate is currently sitting around the mid-sixties right so that sort of, in common parlance, that’s like well there’s a buyer for every property. But then Sydney is not one real estate market really is it? There are so many sub markets.

Kate: Oh so true

Veronica (cont): So in your area, for instance, are you finding that you’re still auctioning or still taking as many properties to auction as you were say a year ago when the boom was really in full flight? Or are you really changing that, the approach to the market?

Kate: Oh and it’s interesting that you bought up that too I think it’s always a good litmus if the Eastern suburbs, for example, are doing well then we find we’re a little bit quieter, and vice versa.

Veronica: Really?

Kate: So yeah, if they’re quiet we’re busy, I don’t know why but that has always been. 

Veronica: So reverse correlation. 

What’s the market like at the moment for you then?

Kate: Yeah I think the acreage market is very strong still I think there’s a lot of activity and people around with a lot of money.

So you’ve got a lot of the developments from Box Hill, Schofield’s, Riverstone those areas which are opposite sort of Kellyville, that are now selling their development sites for anywhere from ten, twenty, thirty up to seventy and a hundred million.

So they’ve got to place their money somewhere and they’re generally not coming in to go to Bellevue Hill, and changing their whole dynamic of the family. So they want to buy acreage they know that if they sit on it for another ten, fifteen, twenty years the same thing...

So the more flat arable land, the more premium the price, the more buyers there’s going to be.. Of course the the more the the ah black wallabies are around and ah it’s goat country well it’s going to be less desirable I guess...

Veronica: And, black wallabies and goats, they like hills right? (laughs)

Kate: Yes that’s right. (laughs) That’s the cooee country.

Veronica: Yeah (laughs)

Chris: Now on the auctions, what’s some of the bidders that you find that are common in your area?

Veronica: Or buyers actually?

Kate: Look I think you’ll always get the buyers that are just straight up and tell you “yes I like it, yes I want to proceed, what do I have to do”. Then you’ll get the buyers...

Then you get the buyers, you know, it could be that they’ve had a bad experience or it could be that they’re getting advice from someone else, like it might be a family member that’s saying “oh don’t tell the agent too much” or you know, and they’ll say “this is my offer, it stands until 5pm otherwise I won’t be coming to the auction”.

Um and that’s that’s a hard one to gauge often ‘cause we know that a lot of the time, or I don’t want to pick a figure, ah ninety percent time they’re going turn up...

Veronica: Yeah that’s common.

Kate (cont): And of course and then there’s the buyers that don’t tell you that they’re interested and the property could be sold, or they run down the property, I guess that’s the other one. The owner doesn’t want to sell to someone that doesn’t like their property and that’s their way of thinking oh they’re going to get it for less.

Veronica: It is a funny one isn’t it because I know that as an agent you’re going to sit with your owner and you’re going to explain to them, you know, there’s buyer A, buyer B, buyer C. You quite often refer to them in certain ways.

I used to have nicknames for the buyers and so they develop a picture as well and a bit of an idea of who that buyer is and they tend to get their favourite, I know the agents often get their favourite.

Even in a competitive market do you think that plays out in the buyers favour, the one that is nice?

Kate: Definitely, definitely, definitely.

I think there’s no doubt that, you know my advice to any buyer buying at auction or any time would be, I mean it’s important to be nice, I think, in anything, but be nice to the agent. But also be the preferred buyer, you know, make it easy.

Veronica: Be the preferred buyer.

Kate (cont): Be the preferred buyer.

Chris: You know if your emotionally attached to the... especially these homes that you’re selling, they’ve had them for twenty, thirty, forty years... You know the money is part of it and they know they’re gonna get a great price you know but they they also want to see that, drive past that home in the future have, you know good memories and, you know, if they can see that it’s going to a happy home and a future family you know that’s obviously going to be more exciting to them then, you know, some investor who is just trying to make some cash.

Kate: Exactly, exactly and there’s so many examples I can think of that where the owner has decided to transact and sell rather than trying to get... You know, they might of hoped for an extra, say hundred it might be well above market you know at three, four hundred thousand... But to them it’s been their whole life it’s their, you know, that they’re selling, they’ve made the decision to transact because they like the family.

Veronica: Like they’re passing the baton.

Kate: Yes, yes.

Veronica: Yeah

Chris: So if you haven’t got kids maybe hire a couple of kids for the day.

Kate: That’s it (laughs)

All: Laughing

Veronica: It is really interesting isn’t it because the emotion, or the elephant, is in this case, or in a lot of cases actually, guiding the vendor as well as the buyer.

And so then you’ve got the agent in the middle and agents have got their own elephant they’re trying to ride so there’s so much in terms of psychology and buyer behaviour and just human behaviour throughout the entire process...

But you could even wind it back to when you do the appraisal, correct? 

Kate: mm-hmmm

Veronica (cont): I mean you’ve been doing this for a long time, how do you win the business in the first place?

Kate: Well I think it’s first and foremost it’s identifying, listening to exactly what they want to achieve. You know, is it something they’re doing to make money? Which could very well be the case. Or is it that they’re wanting to down size? Or is it that they’re wanting to give money to their children?

Chris: Well that’s right it’s not all about the money. They might be upgrading and they might have a six month gap before they settle on their build... 

Do you think the terms of an offer actually are just as important as what the actual offer is?

Kate: Yeah I do, yep.

And I know that money is very important in these decisions as well but I always think and I know it is a a big part of it why people will sell, but I also see, you know for such a long time that it’s not about money. And I’m thinking of one that’s just an exchange that happened yesterday. And it’s a lady that, you know, had a fixed idea in her head “I can’t sell below” and you’ve heard that before.

Chris: mm-hmm

Kate: But it wasn’t about that it was about that her husband had passed many years before. It was the letting go and then of course where she was going on the other side. So, you know we helped her find another property um and those sorts of things.

So I think it’s two fold. You’re helping buyers. By helping buyers at an auction and prior, you’re helping sellers but I also think buy helping buyers genuinely, even if you’re getting nothing out of it as an agent, you know that’s long term, you know it’s like planting seeds for the future whether you get... It’s not about getting anything out of it but they tell their family and their friends “I had a great experience look what they did” knowing that you didn’t have to go out of your way to do it, knowing you didn’t have to do that and knowing you weren’t getting anything out of it.

Veronica: But this is really the difference between somebody’s who’s in it for the long game versus someone’s in for the quick grabbing, you know grab and snatch or snatch and grab. (laughs) Certainly you know you’re in a lifestyle area but you’re also in a family business so you as an individual has seen the benefit of having those relationships and that repeat business.

I guess we haven’t really interviewed yet any agents that are particularly manipulative but there’s plenty out there and they do it for, reasons I guess that are less altruistic. 

But the paradox is, I guess really, is that by being altruistic or by being really concerned about that big picture and actually helping people you do actually probably influence them more than if you weren’t.

Chris: But I imagine you could very easily switch off a buyer by, you know, rubbing them up the wrong way and I imagine you’ve got, you know, experiences when auctions haven’t gone well and you know you feel like you’ve lost buyers for some reason, or they don’t like you? 

Kate: Oh I think that’s something that, again early on and probably when I was more in that pencil stage, that I always thought how does the under bidder feel?

Chris & Veronica: mmm

Kate (cont): So I’ve always trained the agents in there that I’ve worked with, and of course as an agent myself. The first person that I go up to is the under bidder because the person that walks away, the under bidder or bidders, they’re the ones that could go “oh I didn’t want to deal with” ‘cause they’ve almost been in a sense it’s public shame almost.

Veronica: Oh yeah.

Kate (cont): Whereas if they’re made to feel comfortable you know “oh you almost got it Veronica” you know “I thought you were going beat, you know you were almost there” you know “Chris has got something else on Monday that he’ll let you know about”. It’s reassuring. 

Chris: One thing we’ve talked about on a previous podcast is the how vulnerable the buyer is who’s just missed out at an auction.

Kate: mmm

Chris (cont): And do you find that as well like when someone has just missed out at an auction you know they are they’re very I guess frustrated and you know, generally speaking they are very emotional,

Kate: mmm definitely.

Chris (cont): You know do you find that they’re the ones who actually go out and buy something that may not be the right thing for them?

Kate: Yeah in peak buying mode it’s like ah...

Veronica: Oh aren’t they what (laughs)

Kate (cont): (Laughs) It’s like, “forget the needs that you just talked about, yeah this one here”. 

Veronica & Kate: Yeah.

Kate (cont): They are.

If you bought and sold property you’d know that it actually is a big task going out every weekend, looking at property and you get almost over it, it’s like exhausting.

Veronica: Yeah have you ever found that somebody’s really... you’ve been watching them and think “oh my god they just bought the wrong property”?

Kate: Yeah I have yep.

Veronica: Yep, often?

Kate: Ah, not a not a huge amount but yeah I...

Veronica: Enough.

Kate (cont): You can see they sort of settled,

Chris: mm-hmm

Kate (cont): Um, for a property yeah.

Veronica: Yeah “that’ll do”.

Chris: And what about when a vendor comes to you and, you know, it’s not a great property.

Do you sometimes refuse to take on property?

Kate: Very rarely but the ones that would in our area, where that would be the case, is one where you walk out the back door, and I’m just thinking one not so long ago, I walked out the back door and you could hear zzz zzz.

Veronica: Oh that’s the electrical tower.

Kate (cont): Yep so you got the Eiffel Tower in the backyard, you know. And the reason I say that and, look every property has an owner, even if it’s like a falling down property I feel,  when I take on a property, I have to see every part of it - it’s almost like I’ve fallen in love with the property.

So ‘cause I know that’s going to transfer and if there’s a stanchion, for example out the back I don’t I don’t believe I’m the right agent for that particular property.

But anything else I think there’s always buyers for every property.

Veronica: One particular episode, very memorable episode of the show, was filmed out at Dural and you know that was one of our criteria: don’t go near, it’s a fairly obvious one, the power towers or the stanchions.

Chris: I imagine when when you were at that property... I think do you believe the smells, what you hear in the background, the weather, actually affect the result and and I guess how how much do you think that plays a part?

Kate: Before any open for inspection or to taking a buyer through, I think it starts from the moment that they they see the see the property, they come up the driveway and right to, I mean from a residential or acreage, right from the way the agent, if it’s a private inspection for an example, puts the key in the door. Are they are they doing it, that it’s opening the key to their new life, this new home? And I think if it’s done in a way... Where often agents, for an example, will be fumbling around with keys, you know, and it transfers, there’s no doubt that transfers, so I think.

Veronica: Do you take that performance element down to the nitty gritty?

Kate: Well I think it’s not a thought out sort of thing I just think that that if you’re thinking along the lines of respect, if you’re thinking about, you know, the goodness and the positives about a property, then it does transfer.

Veronica: It’s a mindset thing.

Chris: And in terms of styling, do you think that plays a big part and do and for the homes that you’re selling, you know, do you recommend to get their stuff out, get the top stuff in and get the horses in and the ponies?  

Kate: We always ah have our stylist come through and we’ll even if it’s using their own furniture and there’s nothing to be added, or blending or completely re-doing internally, it might be just shifting around furniture and opening up spaces and... Obviously stylists, that is a craft in itself.

To be able to show more space more light and lots of those things I think that’s a critical element. But I also think that there’s something that we’ve seen probably with the styling side of things where it can be almost a bit over styled and become too...

Veronica: Oh I love those ones. I’ve taken a few photos on weekends and stuck them on my Facebook page because they’re hilarious.

But I’m curious to know that, so you have a certain level of, you know, presentation and there’s there’s obviously a way in which you would go through conducting the open houses, all the communication with the the buyer... It’s all carefully thought out and, you know, like you’ve said, you’ve got a mindset around it.

Are all your competitors the same?

Kate: No.

Veronica: So from a buyer’s point of view do you think that they pay more money buying the same house through you? 

Kate: Definitely. 

Veronica (cont): ‘Cause they’re... (laughing) yeah right

Kate (cont): Definitely. 

Veronica (cont): So so big lesson for buyer’s in many cases is to actually look beyond the the sizzle and look at the sausage that they’re buying.

Kate: mmm-mmm

Veronica: That sounds terrible doesn’t it, you know well you’ve heard that saying. You know, you’re not selling a sausage you’re selling the sizzle. 

Kate: mmm

Veronica: That sounds so much more pleasurable and when you’re gonna spend millions of dollars of hundreds of thousands of dollars on a property, you actually want to feel like the experience has been a good one too don’t you?

Kate: And I think from you’re, what you just said as well, see I very much believe that, and I mean obviously by working for the vendor we we need to work with the buyers.

And I very much believe like if it’s a matter of an an extra ten, fifteen, twenty, fifty a hundred in twenty years’ time does it really matter? So I need to be able to believe that this is the right decision for the buyer to do that.

Chris: It doesn’t matter if it’s a good property and they’ve, you know, and that’s where your belief comes in, so I guess is if you’re sold on it it’s a really good asset you know then that’s that makes it easier to sell I guess?

Kate: Definitely I think that and I also I also think it is the zzz. You know if you go back to the selling style like Tom Hopkins that sort of thing, I think those days are long long gone. We can only really lead them to make that decision.

For an example, second inspections. We try and get as many second inspections because we know that the second time that they see it they’re much more connected. 

Chris: And are you picking that time or are they?  So are you saying, are you trying to find the perfect time to present the property, for example sunsets?

Kate: Ideally yeah

Chris (cont): Or you know, I guess that’s just something for buyers to probably to be aware, you know, it’s not always sunsets I guess.

Kate: Yeah well so we do both twilights and and mid-week during the day and of course that is often when the property shows up in its best light.

There’s no doubt the open home times, we time it to show it ideally at it’s best time.

Veronica: Yeah so the trick there is to...

Kate (cont): Come at different time.

Veronica (cont): Request a different time at you know don’t be led by the agent.

Kate (cont): Yeah.

Chris: Every week we hear incredible stories of dumb things property buyers do, dumb things that end up costing them a lot of money and creating a whole lot of stress, mistakes that can be avoided.

Please Kate help our listeners out here, give us an example of a property Dumbo.

We can all learn what not to do from these stories

Kate: Ok so the story that I’m thinking of a is property that sold probably about four weeks ago. It was an acreage property and it was goods acres and it was in an affordable bracket. We had twenty one contracts out and one gentlemen who was interested in it put an offer in prior. Like we talked about just before, said his offer would stand until it was like Friday five pm. It wasn’t a huge, like over the top sort of offer, which you know, had it been, we might have recommended our owners consider. He went to his solicitor got some terms in a confidential manner, didn’t want us to know who it was, the buyer... At the auction, I gave him my card, anyway he handed back my card so that was nice nice of him... He then proceeded to bid in which case we were at the stage where bidding was well and truly over reserve and the difference between him owning it and the other buyer was a thousand dollars. And he missed out. And of course, if you set yourself a limit sure, but try to have an odd amount or difference in there. But for a thousand dollars the difference of him owning that property he’s just, just crazy.

Chris: So is that stubbornness? I mean giving your card back?

Kate: If I can say it politely it’s just stupid.

Chris: Yep.

Kate: Yep.

Veronica: Pig headed, pig headedness by the sounds of it.

Kate: Like you you know for a thousand dollars you’re not going to... Look and fair enough people might get to their point where they go look I’ve already stretched myself but we knew he had the capacity in there to go further. 

Chris: And so he would have walked out... So he you didn’t actually get to the the amount that he offered pre auction?

Kate: Ah no it was over that but we did we did know that he had the the capacity, so.

Veronica: So so your point there, about this guy, was that really got in his own way. He was so stubborn and pig headed about it that he failed to go to where he could have gone to buy a property that suited him really well. You’re saying that he actually got in his own way and should have bought it but didn’t. 

Chris: He got all the way to the trough but then just didn’t drink it.

Veronica: Laughing.

Kate: And of course big regrets. He‘s still still regretting it now...

Veronica: Ahh

Kate (cont): So we do see that occasionally where people will do that.

Veronica: Well that’s the bench mark they can’t, they can never get as good a property and if prices are rising, worst properties are more expensive so that makes it hard.

Kate: And I think that goes without saying like we were talking about like making sure that they’re known to the agent and saying things favourable rather than negative.

Chris: I think that’s a perfect Dumbo. I mean that’s the elephant there, self-sabotaging, you know, the rider on top would have rationally bought that property but that elephant, the stubborn elephant just didn’t want to do it, sat down, and you know it’s the perfect Dumbo.

Veronica: Well Kate thank you so much, you’ve really given us some great food for thought and some insights into a different market, certainly than than I’m active in as well.

But one of the things that I really loved that you admitted, and it’s true that agents have favourites and you know some of the tips that you’ve given our listeners so that they can actually put themselves ahead of the game.

How can our listeners find out more about you?

Kate: Sure well you can certainly contact me direct on my mobile 0414 620 222 or direct on email which is just simply kate@lumbyhampson.com.au

Chris: Thank you Kate, I mean my main takeaway was the rule around the performance everything from the initial listing to when they drive up the driveway to the way to put the key in... everything the agent should be doing and could be doing to you is all performance I guess to, I guess, get your emotional drivers to the property. So, I guess it’s being aware of all that, you can use it to your advantage but I guess it’s just letting, not letting that elephant get wrapped up in the experience just too much.

Veronica: Thank you.

Kate: Thank you.

Chris: We want to make you a better rider. This week’s elephant rider training is...

Veronica: How to be the preferred buyer.

Now there’s a lot of games that buyers play and I guess what they’ve got to understand is that agents are humans as well and agents prefer to deal with people that are easy to deal with, so while I’m not encouraging you to roll over and tell an agent everything, I think it’s important to understand that agents have favourites, and in order to be the preferred buyer it’s important that you learn to communicate with the agent and get them to like you.

So the thing is that whilst I’m not advocating that you give away all your secrets, you do need to let them know that you’re interested, and the easiest way to do that really is to ask for a contract, that’s the most concrete way of doing it but communicate with them respond and answer their phone calls, talk to them, tell them what you do do like and don’t like, don’t try and play games with them.

Don’t talk down the property because you think you’re going to get it for better price if you do, you won’t get a good quality of information from the agents when you try those sorts of games.

So just remember these are agents are human beings as well, they’re also experts in this area so if you try to play games with them you are actually going to be outsmarted, and you need to just get them onside and work with them. So that’s the best way to be the preferred buyer.

 Chris: So Veronica what have we added to the elephant memory bank this week?

Veronica: Well, you know this whole chat with Kate has really got me thinking and buyers need really good guidance when it comes to actually how to set their maximum bid before they go to auction.

There are two elements to this there’s obviously the ideas of how much the property is worth to you and the emotional side of things but you do need to think rationally as well and how much does the property, or how much is the property worth and how does it sit in terms of the rest of the market. 

So I do have a video that I have put together on this exact topic and it is a guide to how to set your maximum bid at auction so we’ll put the link in the show notes for this episode.

Now please come back and join us next week when we interview Shannan Whitney the CEO of BresicWhitney Estate Agents.

Our conversation with Shannan was really quite philosophical, we really delved into why people cannot trust real estate agents and how the way in which success has been measured in the past no longer applies to the current nor the future and how the whole thing has to change. 

Chris: The Elephant in the room property podcast is recorded at the Sydney Sound Brewery, this week’s podcast was recorded by John Hresc and edited by Gordie Fletcher.

Veronica: Until next week don’t be a Dumbo

Veronica: Me again, don’t forget if you’ve enjoyed this podcast please tell your friends and we’d love an iTunes review. We’re getting lonely here.

Chris: Be aware everything we talked about on this podcast is general in nature and should never be considered to be personal financial advice. If you’re looking to get advice please seek the help of a licensed Financial Advisor or Buyer’s Agent who will tailor and document their advice to your personal circumstances.

Veronica Morgan