surprising it's only worth what someone's prepared to pay and you are prepared to accept and that changes every day like today it could be 500 February with if the interest rates come down it might be 550.

[Music] all right guys welcome back to the property pod your weekly engagement into real estate here in the Hobart Marketplace I'm your host Aaron horn and it's been a while between episodes we apologize that we haven't been at the mics uh there's been a few I guess health related issues that have haltered me from being in but um school holidays people have been away we've made it back in the studio so welcome back to the property pod I'm here with real estate agents John McGregor and Patrick Barry welcome back boys thank you welcome back well thank you yes it's been rough it's been quite a little clip of time here I had a pregnant partner with vertigo who we were trying to navigate through and then boys getting sick and other boys falling off benches and so it's been it's been a red hot minute it's been a ride be a parent they say it and you're the glue that holds this team together

well I appreciate you guys uh waiting around for me and not uh setting up some Rogue recordings but um well we looked at replacing you but it was just too hard too difficult fair enough yeah we got you back it's like when Paul Walker left um the faster

Jeremy Clarkson got kicked off Top Gear there you go exactly and then you you're the James May and um Richard Hammond yeah got it around we were talking supercars before the show so yeah that works we're right in the heat of things uh what's been happening in the world of real estate what's going on out there

um it's been an interesting 30 days that's just probably the best way to put it I reckon uh the market was definitely called off over those winter sort of months it's been a little bit on the quieter side but I think there's signs that it's starting to pick back up a little bit a few minutes is coming through the the one that got was interesting is that the big four or listing their forecasts for changes of interest rates yes I think I probably like to expect in an adjustment whether or not that's that actually happens who knows but yeah prop track put out an article actually last night referencing it saying yes they're predicting by January February March next year we'll start to see the cash rate come down and interest rates come down so NAB and CBA are predicting as low as three percent by sort of January February next year which is so with you know with that information then what would that mean for people if they're going to be like well I get in now and pay the high interest rates so that I'm not in more competition or do you do they wait until that's like more affordable which would be really interesting to see what's playing on people's minds and looking to buy now well it's exactly right depends how you look at it because some people are suggesting now is the perfect time to get in because you know let's buy why there's not as many people yeah yeah but do you think you know a two percent drop is going to be enough for it to Boom back up I guess time will tell yeah well it's an interesting idea as you say because as soon as John mentioned like um February sort of thing I'm like oh okay so you got to just bite your time out until February and then you can start playing the game again but then again if you're thinking forward you're like oh no I beat the rush and I get in and I do it pay a little extra premium on the interest until it drops down so yeah depending on how you play the game it's so interesting when you look at this graph I don't know if you've had a look at the jump but we'll get you a copy area and put into the notes I'll pop it up it's just like straight up yeah yeah and then straight down insane and then it's just so unique because like if you were to look back over the years it's just been such a constant sort of level yeah and then it's just this extreme rise and now it's almost predicting almost somewhat an extreme drop to a degree well if we go to show then the short-term medicine you could say during after covert dick we just we need to make people to start spending money yeah yeah is that necessarily a good thing because there's always just bubbled this problem to now there's always pain that has to you know the pain resurfaces you know like I guess it's that tricky thing as well as like as H time the interest rates were Rising everyone's like come on we've got to have reached the top now like it's got to have like worked itself out there would have to be algorithms and things in place where they know like no we've got to keep writing this out this little bit longer before we start heading down the mountain so one of the things I was I can't remember if it was the mystate bank CEO or uh I think it was a nice day and I was talking to you don't quote me on it but um well you're on a podcast so we will be quoting well I'll talk to a CEO of a bank recently got your Tasmania in a bank but I can't remember which one it was and he was basically saying that the reason why the interest rates haven't worked like the increases haven't curved spending is because while they were dropping all those years medically the people that owned homes in that length of time yeah they didn't actually drop their repayments they left their repayments at the same level even though the interest rates were going down so they're paying more of the principal so they actually built up a bit of a buffer so over the last year why it's been raising dramatically a lot of people actually had 18 20 months worth of buffer in them so their spending habits didn't have to change because all they were doing was absorbing that that extra principle they paid off getting more equity in there yeah so he said to me that the biggest thing that he notices if interest rates are working or not is on a Friday or a Saturday night how many restaurants are full when he goes out so if they're still driving down the street and every restaurant is full yeah yeah it means there's more pain coming because there's too many people that have Expendable cash to be able to go out still and enjoy yeah it means it hasn't done its job yet and he thinks that the biggest problem that we had was for so long it kept going down but people were able to just build a safety net into their own which is great that's what people should be doing yeah um but it means that the people that have been really suffering are the ones that bought over the last 24 36 months yeah they're the ones that have really struggled because they didn't have that safety net or that buffer to be able to absorb that that increase yeah yeah just it's generally those people that at the beginning of their you know wealth building Journey not those at the end because yeah that now it's just like I know it sounds pessimistic the idea of that wealth Gap element but it does make sense in some degree because it's sort of anything from that 2017 Mark onwards people that bought before were pretty good yeah after that they're the ones that were struggling a bit more yeah absolutely oh look I know like with us now with two mortgages at the minute um like that's really painful just because the the timing you know so um but so any relief that will happen over the next couple of years will make a big difference just on those those weekly changes um throughout like day to day yeah yeah over the course of you know 12 months when you Syndicate budgets um so yeah well I'll welcome any relief and that's it yes the only other thought I had I guess is that people will always um you know assume that things are bad when you when prices aren't going up generally speaking because it's that oh the Market's tank and everything's going bad it's like just because the people's assets are you know losing somewhat value so it's an odd um idea sometimes where if it's not going up it's not good you know um but is it necessarily I guess from us as an agent's perspective and a transactional one for me I'm also interested in what's moving in the market yeah okay because as a as a practitioner I know it sounds selfish but we we our business is built on transactions not on wealth growth in that respect yeah sure so because obviously our businesses are they going to get paid when we're selling ourselves not necessarily if people make money you know and I I don't know that that's not meant to make me sound greedy or I think um I think what you're trying to get at is people need to probably know that it doesn't matter if your property is increasing in value if you buy and sell in the same Market all you're doing is stepping sideways yeah that allows you to like people need to understand that you know if you want to look at it yes you probably has dropped by 20 or 30 over the last 18 months no denying but any house that you buy has dropped the same amount exactly so it doesn't really have that big effect so you just need to remind yourself of that that you know if you still need to sell because you need different circumstances with family or different things happening then as long as you buy and sell in the same Market you're fine yeah people that get stuck are the ones that sell in the good Market oh in selling like a market like now but then rent for 12 18 months and don't buy until it's too late and the market shifted yeah yeah and they've lost that opportunity so that's what I think you just need to be careful of if you're selling is just buy and sell in the same Market yeah or you know sell why it's good and buy why it's cheap if you can get away because then you do really well but you know you have to Crystal Ball that that's a hard one to do very few people think like guess that um because they knew what to do most of the time we just get lucky yeah exactly while you guys were kind of talking about that it got me thinking I was working through some collateral during this week um for for azra and yourself and and for the company though there was this section in it about being like on the market or in the market and as you guys were kept talking about you know in this market or in that market you have to kind of break down this on the market and in the market idea for me like there was these cool little graphs that were kind of saying how much interest you'd get and I was like I'd love to the boys to tell me more about this so how I reference that is I'll use it as a dartboard so imagine that you can throw a dart on a dartboard and you hit the boundary and you get no points which sounds pretty standard for you every time I play darts with you yeah exactly yeah I never win but I'm on the board so I I I got the board did you get your points no so the thing is is that you could list your let's just assume a property is worth 500 Grand it'll sell for that every day of the week yeah now you could put it on the market and advertise it for a million bucks and it's like twice you know it's advertised for twice its value no one's going to nibble because they're looking at their house going man he's insane did you say nipple or nibble nibble okay [Laughter] um the so you're on the market you're advertising it but no one's interested no one's interested yeah so that and so you keep using that dartboard analogy and then you throw the dart and it hits the bullseye so that's what you get your 50 points and darts I think that's right is it um whatever you're telling this story mate know your references before you bring them up but if if I just took away the dart board and the points or if I just use the doubles that the points um but the thing is then is it then okay you throw the dart hits the bullseye so that in the referencing that is the to be in the market well that means okay we assume this house is worth 500 000 it's going to sell for that every day of the week it's advertised to 500 000 and so therefore everyone that's looking is going okay that's a good buy let's inquire let's grab it so that's the reference to say it's in the market it's in the price point and and a presentation where the buyers are at how and how they go they're actually going to buy it so that's that thing where if you advertise too high yes you're in the market sorry um yes you're on the market it's being advertised but it's not going to sell so okay say hypothetically we're in the middle of the dart board yeah so you know we're not quite in the market and we're not too far over so what happens in that scenario well I would see it as if you are relying exclusively on just advertising on a website hoping that someone's going to nibble probably not going to happen but you can that's when the skill or you know working with a sales agent can help because look okay we know come and have a look at this one anyway because it may just be outside your budget or it might just be a little bit above and there's some room for negotiation there so it could result in showings that lead to nothing as well to a degree though if you're just a little bit too high so it's the way to get it sold is to to be right there in the the price that people are in that's right so the little the example that was in this collateral that you guys were putting together that I I was looking through these graphs basically you had kind of plus 10 percent over market value and the graph was bare it was naked it was like you'd thrown the dart and it had landed in the beer on the other side of the room no interest no people coming to look at the property so your 500 000 property has been priced above 10 over what the market value of it is yeah and it is getting zero interest yeah in that range then on the next graph was five to ten percent above market value and the there was a little graph that was saying yep you might get some Market interest but no offers am I like on the right track here like um yeah so that's exactly what John's describing yeah is that you know you'll get people look at it you might get some people come to the open home because they're like oh let's go look at it but they have no intention of paying that price for it so one of two things is going to happen they're going to you know walk away and say that person's dream you're not going to get that for it or they might lowball you with a lower offer to where they think in the market is okay yep um or you know it might just be a situation where John's describing where we have to massage the two buyer and the the seller together so you know they don't necessarily inquire about that property because it is too dear and they're like well that's not right but John's been a great agent in convincivism you should really look at this I think it's going to tick the boxes yeah but it might just mean that little bit of massaging to to get them to accept five percent over what the market value is yep and then the vendor was like oh well I can probably live with that five percent over and then we end up with the happy medium between

so stuff does happen in that five to ten percent range but it's a lot less and so yeah the other the other Factor on this graph was kind of like a time um access sort of thing so it was like you might be getting the interest in this time so I guess it depends on how quickly you want to sell like you could sit at five to ten percent above if you've got time is that well that's that's the um there's a time there's a price there's a price there's a time I've heard that one yeah yeah so and that's the idea well okay it's not worth what you're asking for which is temp it's you're advertising for 10 above the market today if you've got three to five years to wait cool you'll probably eventually get that but if you want to shift it in the next 30 days this is the price where the market is right now yeah yeah I guess I didn't think about shifting markets and like we were talking about before like things might be changing so your price could be worth you could be right in the market with the right price today but come February when the interest rates change not there anymore not there anymore you're you're dartboard's moved yeah yeah absolutely okay yeah and that's the problem with pricing it's only worth what someone's prepared to pay and you are prepared to accept and that changes every day absolutely like today it could be 500 February with if the interest rates come down it might be 550 yeah but we don't know that and so that's why it always pays to kind of if you get an appraisal and you don't list straight away update update your appraisal or find out later like if you are checking back in six months later yeah it's not you could find a different result 100 and the beauty is people get scared by appraisals like you know I don't want to sit down with the agent they're going to try and make me list the home for sale like be up front and say look you came to my house six months ago I just want to get an updated price I haven't done anything more to it most agents they don't want to waste their time either yeah so they're probably happy to say are you happy with me just to do some online research and then I can give you an idea via email or over the phone I was going to say I've got even easier way you don't even have to talk to the agent yeah go to our website go to 414.com there's like a big banner right at the front says what is my property worth pop your address in done Pat's looking at me like yeah and then I'm thinking we promise we won't spam you that much like you might get a few emails from us but it is a service that is really good on our site it gives you an idea but don't take it no I was gonna as I was going to say it's not like fully accurate but it gives you an idea of like I thought we were sitting in this area and that's using up-to-date data that's coming through so it's not like six months ago or six months ago if you checked it could be like I wonder if things have moved so the important thing about our website if you use our Auto Val tool is you'll see there is a confidence meter there imagine it as a red to green line so red orange green line yep if the meter is sort of at full Pelt round all the way up to the top of green yep then it must be highly confident that that's what you're going to get for that price and the reason it can be confident is there's been some recent sales close by that are very similar in size quality style so it's got reference points to say yes this home should sell the confidence this is what marketing it's orange or red then don't take a lot of value in that report okay so it's still good to give you a ballpark but you really need someone like John and myself or one of the team members to come and confirm it for you because all it's doing is giving you an idea so if you don't get green it's good for a reference point but don't like you know base all your financial decisions well on it I had an email from a guy who I met him when he did work experience with me for a week and he's always stayed in contact about his house and his mum's house and he's looking to buy another one and who is using the um one of those desktop reports is an idea of trying to gauge value on it and I I said exactly what you described then is it be careful not to place too much stock in it because there's a it can you know vary in a big way and we've got a case study for that which was that company in America Zillow where they had a they had a um basically a trading platform yeah you could they would buy your house based off the the data with the intention that then that their patented zestimates I think they're called they lost billions yeah because the thing is about real estate is it's such a you know it's not like the red book with cars where it's much easier to probably fluctuate those small details yeah you know value in real estate gets measured down to the right to the street level right to the front door so when it was when they just relied on those those data um the those data reports to try and build in this platform man they they got they got smashed so smashed yeah the one we use key takeaways to know you is like if you haven't sold the house for 10 20 years it's probably going to spit out a pretty inaccurate report because it knows nothing about the house yeah yeah but if you bought it in the last five to eight years there's a pretty good chance that it has already recorded information from last time you sold it so it knows how many beds how many bathrooms it's got all the past photos of what your house looked like it knows how big your property is because us as agents when we sold it to you we put all that information online to to help sell it so it kept all that information yeah okay use that information to figure out a price so you've done your Renovations and stuff there's so use my house for example I've so it would I've changed it's a terrible idea yeah because it's not going to know the extra work you've done to the home okay it's only going to know at that moment in time it's a three-bedroom home 2017 17 2018. so it's only going to know what you had at that point in time and it's going to use what the house looked like then and compare it to homes today yeah that match that same criteria well it happened we personally like with mine the what the the property had said 500 000 on the desktop report um but obviously we've done renovation so once we'd had the value of visit the property well then it was 580. it must be good Renovations John that's right you must be a good man on the tools I'm good at not doing it that's why it's fine he's got good people in his Corner baby but that's the thing that's the thing if I was to uh exclusively for exclusively rely on that report well in theory I'd be undervaluable property um but now if if we were to ever sell again um it'll have all those all those factors taken in like I said you know um so but they're useful they're good to start conversations too and we'll send them out on a daily basis that thing will um and people will quickly determine whether or not it's you know we'll hear back very quickly whether or not it's actually any good for them yeah I've had some people tell me what I've sent them through what they really think about yeah yeah exactly yeah and I always preface it in the email this is just an estimation by third party supplier this is not my opinion yeah yeah it's dear opinion no I'll make sure I include a link to who they are yeah so but yeah obviously that that is um a bit of danger because it is on our side it does look like it's from us yeah but it is not it's from CoreLogic which is a very reputable data company that's why we chose oh 100 yeah they can only tell you what they know about you yes yes and and I guess like if you're seriously looking at at selling yeah it might be a good starting off point to find out a pricing guide and then yeah pick up that phone or you will probably get an email if you've put your address in yes Martin and Sean love to advertise their footy tipping competition to the database

it's going well it's going well uh the one thing I wanted to cover off just before we finished on the in the market on the market everything was there was a good bit of um of wording in there that was the opinion on the market may not be kind but it's never wrong uh we all we will know your sentence yeah yeah we will know if sorry let me say that again the opinion of the market may not be kind but it's never wrong we will know if you have got it right because the market will show up and put offers on your property so I just thought straight away it was like people could be cranky that they're like well how come it's not selling and yeah open home and it's like well the advice was this is where you're in the market this is where you're right in it not just on it um the market is always right at that stage because six months from now it could be completely changed completely changed well well the thing is that we we can't twist people's arms to make someone do something they don't want to do very simply so you can't force a buyer to pay more than what they want and you can't force the seller to accept less than they need to yep I think um what I found over the years is that I will pitch a price to a potential seller and it might be 500 000 let's keep using that scenario yeah seller tells me straight away oh well I wouldn't sell it for anything under 550. and as an agent you've got a pivot point there you've got a decision to make you either agree with the seller and say well yes we can trial it and see how we go um as long as you fully explain to them that you know it may not happen or you can basically walk away and let someone else take that on because there will be an agent that will just agree with anything you should say yes I think the key thing is whenever I'm faced with that is I'm always happy to agree with the purchaser with the vendor because sometimes we're wrong sometimes we we can only figure out what we think it's worth like other people have different opinions but I always make it clear to them that at the end of the day we need to listen to the feedback and listen to the data yeah sure so if we run one or two Open Homes and it doesn't work out we need to either make the decision to adjust the price to meet the market or we need to make the decision of looking at a different pathway is it you know what are you trying to achieve is it now the right time to sell is it something we rent for a while is it you know we need to look at Plan B and plan C but it's very important that that statement is 100 correct yeah um what you need to understand is that we don't go out there and we don't come to you to lie to you and just agree with you we will happily try anything well and I'm sure you achieved the best result for you yeah um but we always I know John and I do we always make it very clear to somebody that you know our research and our data suggests it's this but we're happy to to try that for you yeah I'm sure there'd be plenty of people out there who like to put their um boots in and be like oh well they bloody try and um charge you more and get more for it so that they get extra commission and and all that kind of hoo-ha but like you're saying like you could yeah oh so yeah we'll put it on for 550. if it doesn't sell no one's getting paid yeah so you don't want to waste our time on a property that yeah isn't going to sell so there's no use putting a crazy ass price on it yeah exactly I think as a vendor you need to remember we only get paid if we sell the property yeah and the last thing that any agent wants to do is spend months on end trying to sell a home that's not priced correctly yeah because we're doing a lot of work and it is a lot of work people think we just sit around and do nothing but we do um it's a lot of work for nothing until we get that successful result so well and that I had I was in an appraisal yesterday and he said oh look would you um you know if you if you sell it quickly will you reduce your commission I said well no because we get paid by the results not the time it takes to get that result because sometimes you'll have a property that I've got of up to 40 plus inspections at the moment but there was another one where we just signed the paper transacted you know the listing Authority in the contract at the same time yeah but I like the analogy it was I I got this from an artist actually and I think he was a graphic designer at the time and when he'd negotiate with companies where they'd say well but it only took you five minutes to do that logo I don't want to pay that I don't want to pay your fee it's like well yeah but it took me 20 years to be able to get to that let this level Rock again yeah the result you wanted in such a short space time and then he said okay no worries would you like us just to wait three months and then I'll deliver you the exact same photo so you feel like you've got your value out of it not bad you know it's like oh no well how about you pay the fee and we move on yeah yeah don't mind that and I guess it turns all he's got a story he's got crackers that's why we have him I guess that you know but I think people always forget to they've got the choice to say no um you know and they can always go in a different direction yeah that's exactly right you've got to do what's best for you yeah and I think the best decision anybody can make when they make the decision to sell is find the agent that they feel the most comfortable with yes you're going to know that person straight away yeah it doesn't matter what brand of the agent works for or what marketing they offer I think the most important thing you can take away is that the person you choose is the one that you connect with and you believe what they're telling you like to me that's the most important I love that I think that's a great button to end on beautiful boys well it was good to be back in the studio it's been a red hot minute yeah man nice to your face it's good to be back it's good to be back my face is adorned with this uh District B beanie that I got yesterday from tarou what a guy I love it what a guy he suckered me in I came in I said I'd love a coffee mate yeah yeah and he said you should take a beanie too I think I will do you know that'll warm the heart the coffee but this will warm the head ah yeah if only you'd said that too I would have bought two all right boys shout out to everyone out there listening uh like share subscribe to all those things that we never tell you to do uh this has been the property pod see you later guys bye you have been listening to the property bug recorded and edited by 414 media house in conjunction with 414 property code this podcast is general information only and the thoughts and Views expressed is the opinion of our panel and listeners should always seek their news their own investigation into any topic we discuss to ensure they fully understand their own situation it does not constitute and should not be relied on as purchasing selling Financial or investment advice or recommendations Express or implied and it should not be used as an invitation to take up any agent or Investment Services no investment decision or activity should be undertaken on the basis of this information without first seeking qualified and professional advice