Property Hub - Investment Insights & Inspiration - Realty Talk: Investing when rates are rising

Episode Date: July 22, 2023

Since May 2022, the RBA cash rate has risen 12 times to the highest level in 11 years.  Many of the messages we receive are from mum and dad investors asking how to securely navigate portfolio growth opportunities in such a volatile and high-interest rate environment.  Today we lift the lid on a whitepaper setting out the 5 rules for safely investing during periods of higher interest rates  In the same way, every property is different, the agents employed to marketing and sell your property are not the same either.   In many cases, sellers find out after they have given the agent the listing that the actions, activities, and results do not live up to promises. We will tell you how to avoid making that mistake. NEW – Join the Property Hub community on Substack! Sign up to get Australian property news, opinion, and episodes in your inbox: https://propertyhubau.substack.com/ Subscribe to RealtyTalk on the Property Hub channel: Apple Podcasts | Spotify | Google Podcasts | Email Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast network DM Media. Business and partnership enquiries: [e-mail] omnystudio.com/listener for privacy information.

Welcome to Realty Talk, the show that brings together the country's most authoritative and respected property experts. Follow us on all the socials and subscribe for updates and exclusive offers. Realty Talk is powered by Realty.com.au. Connecting buyers, sellers and agents differently. Hi and welcome to Realty Talk, one of the shows on the Property Hub distributed by DM Media. You'll find us on all podcast players and through the Southern Cross Austereo Network. Realty Talk is Australia's longest running property podcast with over a decade of presenting property investment insights, inspirational stories and unbiased advice from Australia's top property experts, leaders and analysts.

You know, since May 2022, the RBA cash rate target has risen 12 times and has taken us to the highest level we've seen in 11 years. Many of the messages that we're receiving are from mum and dad investors who are asking how to securely navigate portfolio growth opportunities in such a volatile and high interest rate environment. Well, today we're going to lift the lid on a white paper that sets out the five rules for safely investing during periods of higher interest rates. So sometimes I like to not be first to the party, but be second to third and be sure that I'm having fun in the party, right? And so this is kind of the way you can separate lead and lagging just at a basic level. Arjun Palliwell talks to Bushy about his white paper

in just a moment. You know, in the same way that every property is different, the agents employed to market and sell your property are not the same either and in a lot of cases sellers find out after they've given the agent the listing that the actions activities and results they simply do not live up to the promises so we're looking for someone that's getting the best results doesn't necessarily mean that they're selling the fastest but you want to know that they're selling things in a reasonable time frame that is scott agate now scott is the founder of hello house and he tells Bushy in today's show how he's developed a unique agent selector service that's designed to ensure you sell your property with the right agent. And of course, get top dollar.

Hey, if you like the show, make sure you hit the subscribe button and help us continue to bring you the very best guests. We'll be back in just a moment as Bushy kicks off today's show with Arjun. Property deductions can save you thousands of dollars each year. To make sure you maximise deductions, you need to work with the most experienced quantity surveyor in the country. BMT Tax Depreciation is the leading specialist in the industry. They've completed over 700,000 tax deduction schedules for residential investment and commercial properties Australia-wide. BMT guaranteed to find double your fee in the first full financial year deductions. Call BMT on 1-300-728-726 today for an obligation free quote. Realty Talk and your host Bushy Martin. Now since May 2022

the RBA cash rate has risen 12 times to its highest level in about 11 years and with inflation remaining at a higher rate than expected and further rate increases potentially on the cards your borrowing capacity and your purchase price power has taken a big hit, which in turn is creating continued uncertainty in property conditions right across the country. So if what do you do? Do you sit tight and do nothing as precious time continues to slip through the hands? Or do you find better ways to invest in purchased property to secure your future? And here's a better critical question that you need to be asking yourself. How can you safely navigate economic uncertainty and high interest rate environments to continue

investing property regardless of prevailing conditions and negative media noise. Well, to open your eyes and ears to ways of turning perceived property problems into optimising opportunities, we're doing a special two-part feature with Arjun Palliwell, the Director and Head of Research at Data Driven Buyers Agency Investor Kit, who's recently released a really good white paper on the five rules for investing during periods of higher interest rates. So, welcome to Realty Talk, Karjan. Appreciate it as always, my friend, and great to be on once again. Awesome, mate. Great to have you back. And I really enjoyed reading your white paper. There's some great gold that you've revealed there. So sort of to kick things off on this really topical

subject, mate, can you start by giving us a very quick rundown summary on the five rules for investing in a high rate environment? Of course. So firstly, I'll start off with the fact that uh this was a great collaboration between myself and our research team here at investigate as well as redham from confidence finance so we all came together because i do think as we all talk about property is a game of property data but also finance right and so them coming together with such a finance related term was what we decided to do for this research paper and on this research note there were five core rules that we thought of where there are a lot of people considering or either actively investing during high interest rate environments such as today and we felt that

when we were isolating some of the data as well as seeing what really matters and what doesn't there were five core rules that people should stick by so the first one was look for an under supply for sale building construction and rent and this is simply due to my strong beliefs in the word that supply doesn't lie and it's such an important concept to market growth and market analysis and risk measurement right now in a time where demand has never been more confusing than it is today whether it's people coming in from overseas whether it's record low unemployment whether it's will the demand come off because borrowing capacities have dropped 40 it's much more expensive amongst all this speculation and confusion supply doesn't lie so that's the first

rule the second rule is you matter more than the market bushy so that's a very important thing and I know you believe in this very importantly around the mindset, the psychology of an investor, your own goals, your own decisions, what you do with your own controls is the second rule that we had here. And then the third rule, the local economy matters. This is a very interesting part. How many times do you think the national unemployment figure will make a meaningful difference in your local decision?

Zero, fat zero, actually. It will not. The local economy matters far more than the macro economy. you make an investing decision just for some fun fact on the data the macro economy has just over half the data coming from two major centers sydney melbourne and their surrounds they represent almost half the country's population when you add up those two cities and the surrounds yeah number three was number four sorry was doing some things better than doing nothing how important is it when when you look back at graphs and time, and you see three things, rents up, price up, interest rates

up and down. So you can see here that they don't go just up and up and up, like we're feeling in the short term. And so the big context there is doing something is likely going to be better than doing nothing because inflation is well and truly robbing us. And this is the core rule that we discovered in number four and the fifth and final one was the beauty of data and unpacking the soul as much as people like to love certain cities or hate on other cities the truth is there is something always growing somewhere always there hasn't been a year in the last 40 years of data where i couldn't have found you something somewhere that's growing well every year something somewhere's doing something so it's up to you it's just more challenging when the noise is against

to you in times where money's more costly so they're the five core rules wishy love it and with nearly 11 million properties and over 15 000 odd suburbs around the country yeah and as you well said with each location going through its own dynamics irrespective of what's happening elsewhere uh if you know where to look and what you're doing there's always opportunities there so we're beautifully summed up i'd like to sort of deep dive on some of those now if we can and i want to sort of start breaking them down and digging into the details so can you talk us through your rule number one which is looking at that under supply across the sales building and rents component of course so we all talk about the words demand and supply and it seems to be

the escape card that we apply in in barbecue chats right where someone is kind of not sure of what's happening and then they do the old it's a bit of demand and supply but she's just working its way there and we actually unpack what supply truly means and so in a simplified form it's influenced by the number of properties for sale, the number of properties for rent, and the number of properties in construction. And so the beauty about housing is houses literally do not fall out of the sky. And so that does mean those three things that I've told you to look out for, for sale, for rent, construction, are all accessible data, live data, no lag bushy, live. And you can find it anywhere everywhere in the country and tell you truly whether it is or it isn't it does

not lie right if the supply is not there for rent you have rental increases if the supply is not there for sale you have heightened competition if there is no construction you have no unexpected increases in competition or increases in competition for sale and so from this perspective of the deep dive that we did we'll just take a case study example of the market of adelaide now one would suggest that adelaide looking at it now interest rates are rising we should all be in panic mode but adelaide stock levels are somewhat similar to this time last year are actually 36 percent lower than three years ago just around the covert time and about 48 percent lower than 10 years ago and then if we have a look at that perspective of what that means

simply means that there's not a lot of houses to sell so demand can do its thing some days it's high sometimes you analyze market it's it's confusing and sometimes you might look at it going hey borrowing capacity is down 40 which is no joke but supply is too right and so i think this is the importance of this first rule bushy and when we looked at it there was a clear correlation between very very low established supply very low established rentals and low construction pipeline all feeding together with increased price growth in the short term and then when you pour in the massive skilled migrant immigrants coming into the country that's going to put increased pressure on the demand side of the equation so we're certainly

the indicators are pointing in a very positive direction in that regard but tell me you know we touched on this in the the intro that the media is having a much bigger impact now through its various forms and social platforms on the way we think so how do you feel sentiment factors into the supply and demand analysis it's definitely a crucial part and one thing we actually created which is a side note of data not in terms of this particular white paper but we actually created our own internal index where we scan all across the nation's news live coming out and we bucketed using ai the live news on a positive sentiment b neutral and c negative so a lot of keyword analysis built in a lot of insights here just to try and see if we can overall scan them and what

we found is an interesting trend line that we could start to draw in the charts of media sentiment and it's our own unique to us data point and there was during the last year i guess you can tell a huge dip in that indicator and that was very much in line with some of the transaction volume sales volume started falling off so they do have an influence and i think there's anything i can learn over this you know period of last three years when you consider challenging views during the pandemic when you consider global tensions and localized tensions uncertainty gosh the media has some power don't they like lots of power now um more than ever i guess because we're digitally connected social media our phones our watches our um even our alarm clocks probably have media and

stuff to it these days right so i think the key here is it plays more roles than ever in the past but in saying that this is the beauty of the rule number one supply doesn't lie the media can tell me what they want i'll just go and pull up my supply charts and say no one's selling so don't you don't don't you dare try to scare me love it love it uh arjun no i've been saying for you know i haven't been listening to the news for over 25 years now and i've been a much happier person where the ignorance to the negative bliss is uh is is a good thing uh so i love the fact that you've tracked that through AI and there's no question that if you want to sort of bury yourself in negative noise, you're going to start believing it if you hear it often enough. So that's awesome.

So let's now turn to your suggestion about disregarding macro market trends. Can you give us a bit more around what you mean by this? Yeah, I think it's often as a result of that news cycle, Redem and I, when we were putting this research together, we were talking about this and this is an interesting point right macro market trends just don't matter to individual investors and let me paint this picture out a little bit more if we have a look at the national so-called downturn right if you look at the total value of australia's dwelling stock which is a chart on this paper you will see a clear dip between march of 2022 to december of 2022 this was a dip that brought us back to about june to september data 2021 in terms of australia's residential housing

stock it reached a peak of over 10 billion and found its way back closer to 9 billion now huge huge change but you do not buy all of australia when you buy property and yes everyone talks about markets within markets but that's also another simplification term let me break it down with actual data let's take interest rates starting may 2022 to february 2023 and we categorize markets into three parts peaked and declined have been increasing even amongst the headwinds of interest rates stable slash flatline and so there are about 330 just around there significant markets in australia and some people call them sa3s some people can just for simplification called them similar to councils your local government areas not too far off each

other some some similar yep but they're about 212 in the decline column so no wonder why everyone is feeling like these declines were in place but there was 64 increasing 64 major local areas that were increasing in value during the time where everyone was scared and obviously impacted uncertain. And there were 58 that didn't fall off at all. So that is a decent number close to 140. Roughly statistical areas which make up almost, you know, a third or more than a third of the country that was still, I guess, rising and or flat in values. And this is a key thing to look at when you realize that

you matter more than the market. Now, if we go deeper into this, we can start going into your personal habits. Now, no one loves to hear this. But the truth is, when we started to look at the most ready to buy clients um you know we are one of australia's largest buyers agencies and we won recently australia's buyers agency of the year so we have a lot of internal data of clients and when we started to look at it we realized hold on a minute there's a common trend 25 of your net savings per month going to from your income going towards savings was a key trend we recognized after the most common review of investors investing during that

time yeah so that was interesting yeah the most investors that had decided to pause or stop were naturally the ones who had least control of their personal financial habits and so clearly it showed a sign to us that almost everyone that was investing during that time and current in our client base was particularly saving at least 25 net of their household income or more so very important part yeah it's a really good segue yeah because i i love the way in the white paper you sort of talked about the three steps that investors need to take to ensure that they're ready to take advantage of investment opportunities. Can you sort of break those down for us, please, man? Yeah, I think the three steps there were really about that savings

component first, because that's one thing that you can say, hey, look, the environment changes for me, I am able to manage and control the environment around me. And so that was key. The second one was buffers. How often do you speak to property professionals, and they tell you to have buffers very very little property officials they're all about the next property this is now more about you you control the market right and you control your own market and so what we realized was there was a common theme between those who are able and willing to make decisions with having at least 20 to 25k or 25 to 50k even sometimes per property buffers now a roof is not cheap an aircon is not cheap vacancy is not cheap so think of these things as

you go through it and the third and final thing was setting minimum rental yields and i think when we looked at rental yields from a perspective of of you know this current environment if you shifted the rental yields very high it's still unlikely to be positive right but the truth is you can at least set limits to minimize your losses and that is again you controlling your environment and your market not the market controlling you so these are the three core things we found from minimum yield setting buffers for purchase and minimum savings per month from your household income absolutely agree and i just want to reinforce the importance of that buffer component because it's an insurance policy effectively they can de-stress the whole

exercise if you lose your job if you have issues with the property you're not forced to make knee-jerk quick decisions that can have long-term consequences so we love the fact that you're reinforcing that i want to turn now to your rule number three which you know sort of indicates that the local economy matters more than the macro economy. So can you unpack what you mean by this in detail and what it actually entails for us? Yeah, so we started to look at industry diversity, started to look at jobs and unemployment and infrastructure.

These sorts of core things were a key player in this review. And what we found was a very interesting data set. So we decided to put on one side the 10 statistical area four, so even larger than council sizes now, that had the highest diversity in their job market against the 10 in terms of the lowest industry diversity. And what we used was what we call a national average index on the diversity levels of job markets

in their respective cities. The average growth over 10 years for the top 10 most diverse industries was 97.6% for the SA4s that we picked up. Some notable ones were parts of Brisbane, Toowoomba, Adelaide, Central Coast, Geelong, Melbourne, Illawarra. These are some of the most diverse sort of industries in this ranking. Then we flipped it over.

The 10 SA4s with the lowest industry diversity, and we looked at their index as well as 10-year price growth, and their 10-year price growth was 50.5%. Now, yes, you can't use the last 10 years to suddenly think, therefore, it should keep performing for the next 10 years. But there are common here core points in diverse versus less diverse towns and what those economies are doing more locally than they are nationally. So this was a starting point of having a review of the local economy. Now, going deeper into the economy, we also considered things like infrastructure.

And we started to rank areas by total amount versus per capita. And this is something that many people think of in a wrong way when they look at infrastructure. They see these huge dollars in capital cities, huge dollars, and they don't realize that you are meant to have huge dollars in the capital city. It's meant to be there. You have a population of 5 million. If you're not spending it, I don't know what you're doing, right? If you're not creating more prosperity with all these migrants and people coming in, what

are you doing? If you're not creating more improved cities, so it's meant to happen. Don't think it's a shiny new thing. so when you do infrastructure per capita it flips on its head and what we started to realize was that on the non-per capita basis brisbane gold coast parts of sydney these sorts of amounts really stood out on total dollars spent but then we break it down in a per capita it was places like harvey bay townsville ipswich started standing out on their large spending habits so that was great when it came to seeing the per capita because it's just more meaningful in

smaller markets when they get this huge rush of spending so that was uh very key to look at and when you start breaking down australia's micro markets you start to see that there's so much diversity across this country and you cannot take national figures and do anything meaningful with property invested yeah beautifully said i've often said that if you're looking for growth you've got to follow the three eyes of growth which are infrastructure industry diversity and strong and growing incomes, because they all sort of go hand in hand to some degree. And even more important in times moving forward, given that we've had such a big uplift in property values in the last couple of years, those new growth drivers are going to become very paramount in identifying

ongoing opportunities. But for those that are listening now, Arjun, I know you do a lot of database and AI work around this, but what are the key leading indicators versus the lagging ones that investors need to focus on on how and where can they access that information yeah so i think leading indicators and lagging indicators is an interesting one so when it comes to leading indicators if we start with supply analysis this sets the conditions and so this sits like a playing field where you start to go hey there is not much here happening for sale and then the other leading indicators are around growth history you know one thing is that the last 40 years of housing data shows that most capital cities and even other regional cities sit around that sort of seven to

eight percent long-term averages and so if you're in that long-term average and you see such a large base of cities in that long-term average it means that there's some sort of reversion to the mean like something's coming back to those averages whether it's a high performing market not doing much for a few years or it's a low performing market that starts to come back and you can use examples here you know Brisbane and Adelaide have a very poor 2010 to 2020 they've then started to outperform Sydney and Melbourne had a very successful 2010 to 2020 but if you take their last five-year average they're below well below their long-term averages for performance and the same can be done across many regional centers so these are the first two points we like to start

with but the third one was the three eyes in terms of what is the change that's going to happen in the city that's going to bring about new performance for the subsequent 10 years because you can't alone just say it hasn't grown so it must be great ahead because if it's going to do the same things it always has done then why would it and so these three things are leading but fun fact i've actually been a fan of more of the lag indicators than just the leading and so i like to be sure about an area not thinking that an area will grow and so this is where there are core indicators and housing markets that always show up if people are fighting over real estate you will never see high days on market if things are selling quickly yeah you will never see high sales

volumes uh low sales volume data if there are lots of people buying yeah you will never see high listings data if there is a lot of price growth you'll never see high vacancy rates if there's a fast rental market increasing rents. So sometimes I like to not be first to the party, but be second to third and be sure that I'm having fun in the party, right? And so this is kind of the way you can separate lead and lagging just at a basic level. And many of these indicators are available for free from some of the core lodging housing packs to SQM research. It's just that we like to take a little bit of a personalized deep dive, apply machine learning, apply AI, work with other, you know, fantastic industry contributors and come up with opinions that

starts to say hey something's happening here yeah i love that uh i love the combination of of leading and lagging data to really quantify and validate uh using uh actual data not opinion and hearsay which unfortunately a lot of investors still tend to revolve around media commentators that are talking from the from their heart not not based on facts and figures but uh arjun we'll We'll sort of cut it there at this point because I want to sort of wrap up part one of our two-part feature on this very critical subject. And for those listening, if you want to access Investor Kit's full white paper to enjoy more of the details, feel free to jump on the link in the show notes that will take you to investorkit.com.au forward slash resources forward slash 5X rules for investing during high interest rate environments. It's a great read. also keep an eye out for part two here on property hubs realty talk where arjun's going to unpack his

last two rules together with his thoughts on why what and where you should be investing now so make sure you don't miss it and arjun thanks again for sharing your time with us on the show today thank you mate cheers successful property investment is a game of finance do you have the right team and the right game plan realty talk is brought to you by know how property More than mortgage brokers, Bushy Martin and his team of investment architects set you up with a sustainable strategy structured to lower your costs, tax, risk, and stress while increasing your capacity for growth. KnowHow has helped over 1,900 homeowners and investors secure more than $800 million in property wealth. So get set to live more, work less, and live your legacy. Want to know how to invest in your freedom?

Visit knowhowproperty.com.au. Now, as legendary real estate agent John McGrath is famous for saying, sales agents might all look the same if you squint, but when you put them under the microscope, the differences are quite significant. And these differences are likely to have a big impact on how much you end up selling your property for, as well as how quick, easy, and stress-free the experience is.

Because when it comes to selecting an agent, the difference between employing a good agent versus a great agent can mean as much as 5% to 10% or more of your sale price. So how do you look through the puffery to identify a great agent for you and your property? Because as always, the devil's in the detail. To help you with this, so that you can achieve the best result on your next property sale, We're joined by Scott Agate, the founder of Hello House, who are transforming the way properties transacted and have developed a unique agent selector service that ensures you sell your property with the right agent at the best price at the lowest cost without the stress of the listing process. So welcome back to Realty Talk, Scott.

G'day Bushy, how you doing? Yeah, really good to catch up with you, mate. A good subject to be thinking about because as you would know better than I, there's been very few listings on the market in recent months and the tide's got to be turning at some point not too far away. So I'd like to sort of kick that off by focusing in on that end of the equation and get your thoughts on what mistakes do sellers make when choosing a selling agent? Sure.

Okay. Well, I think a lot of it starts with just a lack of research. So people that are rushing into decision-making process because they feel that they're in a position to sell and it might be because they've already bought and there's some external pressure there to get moving or it's an investment property and they just want to get it off their books between now and the end of financial year whatever it might be but it tends to be a lack of research and due diligence that causes the problem but a couple of key mistakes I think is taking a referral lead from a family member or a friend that may have sold a property recently and not doing any

further research yourself beyond that that's a common thing that I keep seeing people say to me while I listed with Joe Bloggs because they had a great experience there. That agent may have been out of area bushy. They may have been selling a different asset. Market conditions may have been different. There's so many variables that you need to dig into further than just listing with someone else that's giving you a loose referral like that.

That's been one of the main things over the 30 years I've been in the industry. I think listing with an out-of-area agent can also be a danger one as well. Lots of times over the years, we've gone with an agent that may be specifically focused outside of the core suburb for different reasons but we're very in tune with why we've made that decision it might have been that it's a long-going relationship we've had with that agent in particular we know how good they

service buyers and sellers or whatever the reasons may be but i think you should be really cautious about listening with people generally who are out of the area and don't watch that market day-to-day a big danger point is listening with your rental agent your managing agent a lot of times the clients will say to us well we're just going to give it with our rental manager they know the property they've got a relationship with the tenant it's going to be really easy for us to get the transaction done very often bushy though they're not the people that have got their finger on the pulse on the sales side of the transaction they may do a great job on property management and that could be to your detriment if you're a property seller so that's a key one for me

another big one that we come across daily is if you list with a high property a high profile i should say lead agent in the area are you getting the lead agent bushy are you getting their you they're assistant, they're lackey. Have they got the time to focus on you? Are they a volume seller or have they got the time and the data service your needs? And I think last one to land on as well that probably a lot of inexperienced property sellers don't focus on or don't realize this is happening to them is that they're convinced by an agent to sell via a particular method of sale that might suit their office or suit their sales manager. So I'll give you an example. They might be a pushy auction agent or a private treaty agent that says auctions are the

you know, the worst possible thing. But you need a balanced view. You need someone that understands auctions, private treaty, expressions of interest, and can give you that advice. So being easily convinced and led down the wrong method of sale path can be a danger too. Yeah, really good thoughts around that. I'd like to drill into the agent themselves for a minute and get your thoughts on what distinguishes a great selling agent from an average run of a mill real estate agent then. Yeah, sure. Well, I think the first thing is high level communicator, right like we all know that agents should have great follow-up they should be very responsive they've got to be able to clearly explain the job at hand so i think they've got to have confidence

around the whole buying process and selling process in reverse of that when they're representing you that's offloading a property so have they got longevity in the game have they got great transactional history locally there and for that type of asset and for that type of price point as well so are they going to freeze if it's a big number that they're negotiating on or are they going to pay little interest to it if it's a low level sale that they're not getting a big paycheck from so I think you know have they got a detailed plan have they got a timeline that they can run to with confidence have they got the ability as we just just discussed just before to debate all of the methods of sale can they have a really honest open conversation around the success of auctions

the downfalls of auctions and vice versa with private treaty to give you the right level of advice so that you've got the confidence to make a decision from there yeah really good thoughts well uh sort of going back to the results from an exercise how important is selecting a great selling agent over an average one and what impacts it's going to have on the actual property sale itself do you think yeah well it's critical to the final sale outcome right like you want to have absolute confidence at the end of that transaction to know that there's been no stone unturned every buyer has been exhausted you've got the best possible price the best possible terms in effectively the shortest possible timeframe. I think the danger of that

though, the shortest possible timeframe though, Bushy, is a lot of agents will market themselves as leading agents locally because they sell property so fast and they sell a vast volume of property. That's not necessarily attractive to me when we're looking for the right agent fit. So we're looking for someone that's getting the best results. It doesn't necessarily mean that they're selling the fastest, but you want to know that they're selling things in a reasonable timeframe. So it's not taking, let's say, for example, the average days on market might be 40 in your suburb, Bushy, that you're going to go and sell in. If you've got an agent that's consistently selling in 60 to 90 days, well, then I'd have some question marks as to why they're

not outperforming the market. So you don't want to go with the agent that's selling in five days or 10 days necessarily. And there's a balance between the two of those things. So reduced days on market is just something you need to be a bit cautious about. And it's important that you select the right agent because they're going to have to back themselves. And you want them to not just rush in and take the first offer that's on the table. You want them to have the confidence to be able to play multiple parties against each other and really negotiate the best possible outcome in terms. Yeah, really good thoughts there because we've all heard of stories of agents who go in and pretty much blow smoke up the backside of the seller and strike their egos

and quote a price that's probably never going to be achieved and then spend the next couple of months talking the seller down to what the market is actually going to pay for the property just because they're interested in winning the listing not selling the property so common isn't it yeah absolutely well i mean you've developed a fantastic service that takes all this pain away to improve the results of people going to achieve in the context about what's the best approach and process that we need to follow in order to secure the best agent to sell a property for the highest price at the lowest cost then scotty well to address the point that you just said bushy we always start by analyzing the value of the property so that we we take that agent buying

the business out of the equation as best as possible to start with it absolutely gives you confidence then that you know if you're getting low offers that you've already looked at price independently before you started the process i think analyzing the value of your asset is crucial to begin with then we go deeper into researching the agent so we'll have a look on say real estate or domain both in the buy section and in the sold section and we'll look at you know back as far as three to six months. And we're trying to find assets that have sold that are at a similar price point and a similar style. So if it's a three bedroom house, we're going to look at three bedroom house agents that have sold around that same price point, rather than looking at people

that may have been active in the apartment market, for example. So it's like for like, because those agents have got buyers on their database, the potential for you to sell fast and sell for a premium if it's a good fit. So research those three leading agents. We want to know that um you know they've got a great focus on marketing and presentation they haven't got a big ego they're highly responsive when they get back to us and they want the listing sometimes we'll ring an agent and you just get a feel that they're too busy they just you know they don't want another three-bedroom house they've got five of them they're trying to push into the five-bedroom waterfronts they don't need another three-bedroom dry block um somewhere locally so

you've got to really get a feel out of that and the only way to do that is to get those agents once you've researched it on the phone and run them through a brief interview process the next step for us is to get them to compete against each other by coming in and pitching uh their full proposal to us and we'll do that by getting the agents through back to back on the same day we do it for continuity um and also so it's fresh in your mind wish you that if you've seen three of them back to back you can really pick those apart and see what you like about each of those independent agents you get those um competitive proposals back they know that they're in competition with their local agents that um you know their peers that's going to get

them really sharp on their pencil in terms of their fee structure and then we're going to choose the leading agent once we've gone through the method of sale the marketing cost the presentation ideas the estimate on price and we're going to find the right commission structure as well we choose that leading agent then we're going to go back to them and renegotiate the fee if we can lower and we're going to change it from a fixed percentage price instead of being you know your average two percent in australia we're going to change that to a performance-based sliding structure, that they're incentivized and get paid more if they outperform their market estimate to us in the first place.

So I think if you go through and do all those steps, you're going to find the right agent at the right price, and it's going to give you confidence that they haven't tried to buy the business. Absolutely right. It sounds like a very thorough and detailed due diligence process. Scott, you've pretty much answered this next question already, but I'll throw it in so you can summarize it. Why would we use Hello House to select an agent over doing it ourselves?

30 years of industry experience is probably the first one on over 3,000 property transactions. So, you know, we've acted and me personally as the principal or lead selling agent, buyer's agent or a buyer in those transactions. So I've got in-depth knowledge of how the whole ecosystem works, understand what we're looking for in the agents.

The ability to outsource it means that we can come at it as a third party. So we have a lot more cut through with the agents. We get more direct conversations with them around what's wrong with the property, What's wrong with the vendor's expectations on price? What really the buyers think? And you've got someone on hand, Bushy,

that you can refer to throughout the campaign that can give you independent advice. And I think that just gives you complete peace of mind that every step has been done the right way and that you're in the best position to get the ultimate result. Sounds like a brilliant service, mate. And there's a lot of work that you're obviously doing

to get to that point. From the seller's perspective, how much does this service cost and and how does hello house get paid well mate it's your favorite price range it's free so um we we get uh we get paid an industry standard 20 referral fee from the listing agents all the agents agree to pay that up front before they enter into the process with hello house that enables us to then offer the service free of charge to our clients so it's a great value add it's no cost to the customer and we think it's a no-brainer and we've done hundreds

of agent selections across the country at all different price ranges with fantastic results for our clients. So it's definitely a popular service. Very similar to the finance broking model in the context of the banks pay the brokers and therefore it's generally a free service to clients. So when that's the same across the board,

there's no bias to one agent of the other. It's going to get the same result and therefore you're selecting on merit, not on dollars or brand bags. So look, mate, Scott, it's really crystal clear that if you really want to ensure that you sell your property with the right agent at the highest price and at the lowest cost without all of the stress and the overwhelm of the process, we need to do ourselves a favor and check out your agent selector service at hellohouse.co.

That's hello, H-E-L-L-O, house as in the German version of house, H-A-U-S.co. And thanks for sharing with us on the show today, Scott. Pleasure, Bushy. Thanks for having me. To make sure you get the most from your investment property, you need to claim depreciation. BMT tax depreciation ensures that depreciation claims are maximised and compliance is maintained through their physical site inspections. During a site inspection, a specialist BMT site inspector measures the building and identifies every depreciable asset possible. Call BMT on 1300

800-728-726 for a free estimate of the likely deductions. This is Realty Talk, powered by realty.com.au. Well, that's it for this week. Thanks for your company, and we trust that you've enjoyed the show. We love getting your feedback too, and soon Bushy and I will launch a new segment to answer your questions. So send them in through the website. special thanks to Scott and Arjun for their contributions

and of course to Bushy Martin now before we go make sure that you don't miss a single episode of Realty Talk or Bushy's Get Invested podcast both delivered to you every week and you can do that by subscribing to the Property Hub now on your favorite podcast player or wherever you're watching or listening to this show thanks to our supporters also to realty.com.au bmt tax depreciation know-how property finance and apiro marketing for their ongoing support i'm kevin turner and on behalf of bushy and the entire property hub team we look forward to seeing you again next week miss something in this week's

show or want to catch up on past shows do it anytime at realty.com.au where we connect buyers sellers, and items differently.