Today’s very special guest is a radio announcer, real estate agent and the host of Real Estate UNCUT and Real Estate Talk podcasts, Kevin Turner!
Kevin’s going to take us on a fascinating tour into the inside workings of a real estate agency… The techniques, the training, the tricks and the important questions you need to ask in order to find the best agent to sell your property.
5:44 How Kevin first got interested in property
8:30 How to start a career in radio…
10:45 What Kevin thought of real estate agents and salespeople before he started
12:05 Why he decided to become an auctioneer
13:25 The huge change in real estate since Kevin started
16:00 What are the characteristics of a good real estate agent?
18:08 The right questions you should ask to determine whether you are talking to a good agent
19:10 Why you need a real estate agent to facilitate a sale for you
20:40 What are the things that good agents do for their owners that bad agents don’t?
21:45 What is price ranging and why is Kevin dead set against it?
26:47 Why real estate agents should do role playing?
29:18 How do you learn negotiation skills?
31:10 What goes inside the real estate agents community?
40:33 How much commission does an agent get from a property?
41: 53 What’s the authority period and how long should it be?
43:35 What are the different ways to sell a property?
46:50 Are agents legally obliged to pass on my offer to the vendor?
54:15 As a buyer, what’s the most effective way to present your an offer?
56:10 Kevin’s first few properties and how he grew his portfolio
59:30 Kevin’s rules for buying a good property
1:00:20 How Kevin got the idea to start a property podcast
1:06:54 Kevin shares what he hopes his legacy to be
1:07:34 Kevin’s views on the current state of the property market today
1:09:55 Kevin’s advice on what you shouldn’t do when purchasing a property
“Good agents should never put themselves in the position of making the decision in behalf of anyone. Great agents make no decision.” – Kevin Turner
“The thing about selling is, it’s not about performance, it’s about building relationships.” – Kevin Turner
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Your Property Success Podcast
Ep16: How To Find The Best Agent To Sell Your Property with Kevin Turner
John Blackman: Did you know with just two investment properties and one single renovation that you could put over a million dollars in the bank? It’s true and why stop there? Welcome to Your Property Success Podcast, the show that explores the practical steps to making your property investment dreams a reality.
And now here’s your host. She was once kicked off the cricket team for stopping the ball with her foot, Jane Slack-Smith.
Jane Slack-Smith: True, true, true, true.
John Hubbard: But you can stop the ball any way you want can’t you?
Jane: Look, I grew up in a cricketing family. My father was a cricketer. I think he played regional or something and from one of my birthdays, I actually asked for the cricket scorebook, so that I could sit there and do the dot strike. So a big cricket tragedy and I did rehearse for years. Anyone who remembers the ‘70s McDonald’s two all beef patties special sauce lettuce cheese on a sesame bun and you got a picture of the cricket team, Dennis Lillee, Rod Marsh, all of that. I grew up with that, grew up with Dad bowling to us practising batting, etc., and so when the school said they’re going to have a girls’ cricket team, very happy and then they said it’s Vigoro, which is the name of girls cricket in ‘70s and it has this weird kind of shape bat that looks kind of like a lacrosse bat and it really – to protect girls from injuries and things there was all this kind of you couldn’t bowl fast and all these kind of girly rules. I wasn’t really into that. So, I thought I’m not going to really take this very seriously. They had these big balls so they didn’t hurt you and so at home I was playing with you know hard cricket balls and got to school and I had to play this kind of girly puffy version of it. So, I thought I’m not I’m not really into this, so I refused to bend down and pick up the ball, so I just thought to stop the ball of my foot and throw it back and they said I wasn’t taking it seriously enough and kicked me off the team. So, there you go. True.
John: I actually joined a new cricket club once when I was living in Ashburton and it was the girls team were like one of the best girls team in the area and the boys team used to practise with them and I kind of rolled up the training and they put me bowling to the girls on the first night because the other nets were already full. So, I go down and kind of roll the arm over at half speed not wanting to injure any of them and the ball goes sailing back over my fence and the coach goes don’t do that again.
Jane: Yeah. Not really into affirmative action. Well, John a big welcome to The Your Property Success podcast and Episode 16 and once again thank you for joining us today. We really appreciate you taking the time and as always we have another fascinating topic to discuss. We are going to go deep inside the workings of real estate agencies and of course another top shelf guest John.
John: You would have to say no one knows more than this guy about what goes on behind closed doors in a real estate agency.
Jane: Absolutely. And there can only be one person we’re talking about. He is a long time radio announcer, a real estate agent, a real estate agent trainer, the founder of two shows Real Estate Uncut and Real Estate Talk. We are talking about the one and only Kevin Turner.
John: Yes. I’ve been really looking forward to this.
Jane: I know you have.
John: And we’ve gone the extra mile this week. We didn’t want to look sloppy, so we have really prepared our questions well and all those things that you really want to know about what goes on in a real estate agency like the secrets and the techniques and all that kind of thing like, what can they tell you for instance. Can they outright tell you that there is another offer on the table when there isn’t one or do they legally have to pass on your offer to the vendor? This is one that often comes up. Also, just how does the commission structure work within the agency and does that matter to you as a seller. And also, what’s the meaning behind some of those questions they ask you all the time when they call you up on the Monday or Tuesday. What’s the information they’re trying to glean from us from Jane.
Jane: I know, I know. It can all seem so mysterious can’t it? Look, I’m going to be asking him about how to find the best possible agent to sell your property because we all want the best possible price and I know he has some very strong opinions about this. And one of questions we should be asking a potential real estate agent, how can we make sure we don’t choose the wrong agent to represent us? And also, you know the pros and cons of the many different sell types, you’ve got auctions private tradies and so much more, and the most effective way as investors that we can make our offer to secure the property that we want. So, Kevin himself is an experienced property investor and he has some more rules for how he thinks he should buy investment properties. These things and so much more are coming up today. So, don’t go anywhere and if you’re like me and listen to podcasts a two times speed, I warn you, take it back to one time speed today. Get a notepad, get a pen, make yourself comfortable, settle in for what is going to be a fabulous episode with today’s very special guest Kevin Turner.
Jane: Hello Kevin welcome to Your Property Success podcast.
Kevin Turner: Oh, it’s nice to be with you Jane. How are you?
Jane: I’m really nervous actually speaking to you. You’re the consummate interviewer and I have to say I feel like I’m in the hot seat.
Kevin: Well actually, I’m the one that should be nervous because I don’t know what you’re going to ask me. The shoe is on the other foot normally because I’m the one that’s got all the questions but you got all the questions, so fire away.
Jane: Exactly. Well look you know the thing is I can take this in so many different directions, this podcast because there is so much that you have done. But what I would like to do is just go all the way back in time to the beginning and for you to tell us how you first got interested in property.
Kevin: Wow. Okay. That’s a pretty easy question to answer actually because I was a manager of a radio station in Townsville and we had what I call as a – it wasn’t a board of directors, it was a quasi board of directors, but it has ended up being a monthly boozy lunch. And one of the people on that panel was interesting enough a Ray White agent who became a great mate of mine and he really fired up my enthusiasm and my interest in real estate. I had always been interested because we had purchased at that stage a number of properties in different parts of Australia as I moved around with my radio career, which basically meant I was moving roughly every couple of years, so we would literally buy and sell and then move on because in those days the banks wouldn’t allow you to accrue property or even keep it as a rental and moved, so we effectively had to sell it and move on. Actually, one of the houses we had because I worked at 2GB in Sydney was actually in the Sydney market. I wish we had kept that one. But anyway, that’s—
Jane: Doesn’t everyone who ever owned a property in Sydney at the moment?
Kevin: Yeah, exactly. So, in answer to your question, I actually fell into real estate because when I left radio, I was just disenchanted with the amount of management changes that were happening and I thought, no, I think I literally try real estate which is a lot of people do and unfortunately a lot of them try it and fail and it was a huge culture shock for me but I moved to Brisbane, moved my family from Townsville where we were living at the time and lived and started in Brisbane. My first real estate office that I worked at was at Ray White Paddington. So, I’ve always had that real interest in real estate and I love it. The thing that I love about now is that I’ve been able to combine those two careers because I worked in real estate since 1988 and have never really given up and I was able to combine that about six or seven years ago with my interest in radio. They are my two passions, radio and real estate. I’ve got the perfect combination.
Jane: You do. You’re living the dream.
Kevin: I am living the dream exactly.
Jane: Going back to that kind of post boozy lunch going home and saying, “Darling, it’s no longer radio. It’s real estate for me.? How did that conversation go?
Kevin: Pretty much like that. Carolyn has been very very supportive. I don’t know how she’s put up with me all these years, but she’s been a great support for me. Now, there was no hesitation. It was a an agreement between the two of us because we actually had the kids at that stage and we thought they would be good to get them into a high school in Brisbane, so that they can actually go to university down here, which was which actually worked out rather well. So it’s exactly what happened.
Jane: So let’s stay with the radio for a moment. How does someone even start a career in radio?
Kevin: You do a course at a little radio station in the town in which you live because that’s actually what happened. I was living in Toowoomba at the time and I did my apprenticeship as a printer, so I’m a printer by trade, hand and machine compositor and decided that I would like to get into radio. I’ve always had that love of either the stage or being some kind of a performer. And I saw radio is giving me that opportunity, so I went along and did a radio course and that actually got me to my first job which was at 4AM in Mareeba. I left Toowoomba and I was only 28 at that age and that’s when I started in radio.
Jane: So, what were some of those early roles that you had as a young broadcaster?
Kevin: In broadcasting in those days and that was a long long time ago, you were a jack of all trades. You’d be a sound person, you’d be a technician, you were on air, you would do your own panel, your own production. And I just really enjoyed getting into marketing and sales, so I used to actually create my own little programmes where I’d do specials on different artists and I packaged them up and then I take them out and sell them and then put them to air, so there was a whole lot. There was the creation, there was the writing it, and then the recording, and then the selling, packaging it up, and then putting it to air. So yeah, I really enjoyed that side of the business and I guess that’s really what’s driven me to where I am today, which is really creating content which is what we do.
Jane: Well, I have to have to admit I actually shared a house at one stage in Mudgee with a young broadcaster and he kind of wrecked all the myths for me. Little things like I used to wait for the radio station the morning to tell me what the forecast was and it turned out that he just put his head out the window and guess, so a bit of a creative.
Kevin: You stick your finger out the window and see which way the wind is blowing and then you take a bit of a guess. Now, that’s a lot easier. They’ve got apps to actually help radio answers work out what the weather is doing so.
Jane: So you went from broadcasting to real estate. Can you tell me before you actually stepped into real estate other than those lunches with your mate, what was your opinion on real estate agents then and sales people in general?
Kevin: Breezy job, nice and easy, whack someone in a car, drive them around. They love property like I do, so they’ll buy something. Gee, what an easy life. And look, they all drive Mercedes Benz and BMWs, they must be making a fortune. But then I found out about things like leasing, how easy it is to lease a very expensive car. Now, I guess I had the view of real estate agents. I really enjoyed what they do. I enjoy real estate and I enjoy talking to real estate agents. I find them very motivational. I’ve always had a good view of them. I don’t think –we sold a few houses in the early days without understanding about real estate. I could see how hard they had to work to do it and how many dry gallows they had to go down. So I guess I did have an appreciation of what they did, but probably didn’t understand just how hard it is because it is a very very hard career to excel at.
Jane: Absolutely. Well, did you actually have some of the skills from broadcasting? You said you loved that performance. Did you take some of those skills to real estate?
Kevin: Not until the latter years because I think when you when you’re generally selling, it’s got nothing to do with performance. It’s all about building relationships and the performance came in later when I became an auctioneer and I really enjoyed that part of the process. Interestingly enough, I took on being an auctioneer because I wanted to understand about auctions and I could see that that was going to be the way that people would want to buy and sell property. I thought well I better understand what the process is and it actually interestingly enough made me a much better auction lister because I understood the process. I understood what buyers and sellers were going through, and I understood what the role of the agent was. That’s where the performance came out. In latter years, I went onto do a little bit of training. I really enjoyed that and sitting in front of a crowd and in a way being a bit of an entertainer because you have to put on a show. You live to a different level. So, it’s not just a matter of standing up there and talking about how you do letterboxed drops and so on. You’ve got to make it very entertaining and keep them engaged. So, those sorts of things have stuck with me and I guess that’s a skill that I’ve developed and roll I’m rather proud of it.
Jane: Absolutely. I’m really interested in kind of going into a bit of depth about being a real estate agent and some of the behind the scenes because I know our listeners, we have that impression of we engage an agent maybe a couple of times during our lifetime and we don’t really know what goes on. When you started in Paddington, is it typical for a real estate agent to start in the rentals or where did you actually start?
Kevin: No, I started straight in sales. Some agents do start in rentals. Some of them started administration but I went straight into sales and I guess it probably depends on the age you are at the time. When I started back in the ‘80s, it was pretty much unheard of for an 18 year old kid to come in but in those days we didn’t have cadets, but now they’ve got cadets and there are different levels. Agents now have their own office within an office where a successful agent could have some buyers’ agents working with them, could have a couple of assistants, some Pas. Now, there is now there is a real career path to real estate which is what we didn’t have back in the ‘80s and the ‘70s and ‘80s where it was like you’re either a property manager who had to put up with all these awful tenants and grumpy bloody landlords or you become a salesperson or heaven forbid if you had the guts you’d actually open your own office. But now there’s a real career path and it’s great to see young people come through. They start out as trainees, they become PAs, they become buyers’ agents, they start to learn all the skills, they understand about databasing. But more importantly, they’re being taught by some very good agents about how to create relationships. That’s the big change that I’ve noticed in real estate. It’s moved from becoming a transaction business to becoming a relationship business where we used to look at it was purely a transaction. You buy and sell a house that was a transaction, okay move onto the next one. But now, it’s an understanding that you need to build a relationship with someone and that relationship lasts all life. In fact, I was talking to someone today has just developed a program that will actually help agents adopt sellers and then hold onto them forever because we used to look at a house as the thing we were selling. People would move in and out of it, so therefore we didn’t actually have a relationship. But now, we understand that it’s the person who moves from house to house. It’s not their house that’s important. It’s the person because they are the one who will make decisions about appointing the agent. Smart agents judge is now attrack people not houses.
Jane: It’s an incredible insight. I remember 20 years ago reading, I think it was called The Greatest Cadillac Salesman book and the gentleman back then said, “If I can have a relationship with a person, I don’t just have a relationship with them. I have a relationship with their kids and I sell them the cars.” And it is a longevity relationship really now, which I imagine is one of the characteristics of a good real estate agent, but you tell me, what is a good real estate agent?
Kevin: Well, a good real estate agent is someone who doesn’t focus on the transaction, focuses very much on the relationship, builds relationships, but they’re also very good negotiators. And to be a good negotiator, you have to understand about human nature. You have to understand about people. What are the triggers? What makes them tick? In other words, you’re not just asking questions to find out what they want to do. You’re asking questions to find out who they really are, what turns them on. And this is one of the things – I’ve written an e-book which you might get a chance to talk about, which is called How to Find the Best Agent. And the reason I wrote this book was because there’s a lot of publicity at present from websites that offer to put you in touch with the best agent to sell your home. Well, I find that an affront because it’s effectively a lie because they don’t. They actually put you in touch with the agent who’ll pay them a commission. So I’ve said about writing this book, it’s a 40-page book and I’ve done it deliberately so that people can understand what makes a great agent and how do you measure them. It’s not just a matter of you know working out who’s going to do it for the cheapest commission or who’s got the most signs up in the neighbourhood. There are so many other skills that agents can bring to the table. The most important one is that of the negotiator because if you if you employ an agent to sell your home and they’re not a good negotiator, you’re effectively, without even knowing, you could leave thousands of dollars on the table. One of the things that I’ve written in the book is, how do you find that agent? What are the questions you ask them? But more importantly, what are some of the answers you should be expecting back when you ask those questions? One thing to say well, what level of service you’re going to give me and most agents are trained in a very glib way to tell you what they’ll do and they’ll give you guarantees of service and all that stuff which is just a load of rubbish. There are some real tangible things that great agents will bring to the table.
Jane: And how do you check those? Is it testimonials?
Kevin: No, it’s just asking them the sorts of questions that will determine whether or not they really know what they’re talking about and that is asking them, how long does it take to sell a house in this market? What are you what are your days on market? What’s your list to sell ratio? What is the difference between the list price and the sell price from properties that you list? But it’s understanding what the answers need to be to determine whether or not you’re talking to a good agent. Those are some of the key things that we talk about in the book.
Jane: It’s interesting there was as part of a discussion on our Facebook group just today and this person was saying this is what an agent has said is going to cost me and everyone was going in and sharing what percentages they’ve been charged and someone came in and said, “You know what? I went with the cheapest agent. In actual fact, I think they lost me fifty thousand dollars.” So finding that right agent is so important but a lot of people, as you mentioned, there’s these apps these days and there’s all of these kinds of connection tools, why do you think we actually need a real estate agent to facilitate a sale for us?
Kevin: You need a real estate agent to facilitate a sale so that they can help you determine what’s really happening in the marketplace. For some people, they’ll only buy and sell a house once in their lifetime. It’s a very scary experience and if you’re not prepared for it – yes, anyone can sell a house. Anyone can sell a house, it all comes down to the price. But getting the highest possible price is what the real skill is all about because every house sells. Even the worst houses, even the ones that are right beside railway lines, the only thing that stops a house from being sold is the price. If you market it properly and you get enough buyers in and you create the kind of atmosphere that the third person can, not the owner, but the third person that arm’s length relationship – don’t get me wrong Jane, there are some people who would be very successful at selling their own house. But I can tell you, I would never sell my own home. Never. And I’m an agent.
Jane: With the amount of experience that you’ve had, that worries me. You’re right.
Kevin: Because I’m too close to it. I want to stay apart from it. I want to be able to look at it objectively and then get the feedback from the agent. But at the end of the day, I’m the one who will decide whether or not I sell, the agent someone is going to get me the best price, and that’s really where a smart seller operates in that environment. Understanding that they’ve got the absolute control but at the end of the day I’m not going to sell it unless – we won’t get a sale here unless I’m happy for it to sell.
Jane: So what are the kind of things great agents do for their vendors that other agents don’t?
Kevin: Okay, easy. They’re so dead set honest with them. They’re upfront. I was talking to an agent only a matter of about half an hour ago and I said to him, “What are the things that you think make great agents stand out? And he said, “It’s that 30 seconds of courage. It’s that time when you’re in front of someone and you’ve got the guts to tell them what you really think?” So the scenario is, every seller wants more than their house is worth and every buyer wants to pay less than what it’s worth. That’s a fact. So there will always be that gap, that pressure between the two, and this is where the great agents come in. They’ve got that ability to tell a seller what they really think not what they need what they think they want to hear and this is where come unstuck as an industry with low balling, with price ranging, which I am totally dead against. I do not believe in price ranging. I don’t believe in these fakes.
Jane: Can you explain to me what price ranging is?
Kevin: Price ranging is where if an agent thinks a house might be worth about $500,000 typically an owner might want $550,000 so therefore the agent will take the soft approach and say, “Well let’s look for offers over $530,000” knowing full well that the property is probably only worth about 500. So they try and take that middle ground, so they’ll give either price ranges. We’re looking for buyers between $500 and $550,000. And the first thing a buyer will say to themselves, “Well, they obviously want $525,000.” Very few buyers would actually respond well to that type of scenario. Some smart buyers will come in and offer you $501,000. I just think price ranging is just a waste of time. You either you either have a price on it for what you what you genuinely want and building in some form of negotiation or you take it to auction and when you take a property to auction you take the price off it.
Jane: Yup. Is that what buying the listing – does that mean the same thing?
Kevin: Well, when an agent buys a listing, they’ll actually tell the seller what they think the seller wants to hear, so effectively it’s buying the listing. And this is where it gets back to, you asked me what great agents do, it’s that 30 seconds of courage is where they’ve got the confidence, they’ve got the market knowledge and they’ve got the ability to tell us sell or what they really think. “I’d love to get your premium price for your home and we’ll do that if it’s in the marketplace, but right now, the market’s telling me that it’s worth about $500,000. What would you like me to do?” And that’s the dialogue of a good agent.
Jane: And I guess the vendor, I mean for people listening at the moment, when you hear you know three different agents and two to kind of hit on the price that you want and the third one saying, “Look, I’m going to be honest with you. Here it is.” It’s about taking the emotion out of that purchase decision and really understanding what the agents know it was working for you, which one is going to be delivering you the best possible product.
Kevin: I did say earlier Jane that most sellers want more than what their house is worth and that’s their right. They’ve got every right to do that and I fully respect that, but deep down they know what it’s worth, but everyone secretly hopes that there’s going to be that buyer who will come down to the goose pile or come in from Sydney and pay a fortune for my house, which is the best house in the street. We’ve heard all that dialogue before. That’s the way it goes, but that’s not reality doesn’t. It doesn’t work out that way.
Jane: So tell me this, when you visit an open for inspection, what are the kind of things that an agent says that make you cringe? What does bad practice look like?
Kevin: Wow. Good agents will understand that if a buyer comes to an open house, they’re doing it for a reason because they don’t want to be hassled by an agent. They don’t want to go on those inspections where they’ve got to work to the agent’s agenda. So, most buyers at open houses want to be left alone. You’ve got the right to ask them for their name and contact details at the start and then say, “Have a look through. If you’ve got any questions, I’m more than happy to help you.” But you don’t follow someone around, that’s what bad agents will do. I think they’ll try and crowd too many people at an open house. But generally, most agents nowadays know that and they’re pretty good at it. They know that if I get the name and the phone number they’ve got that ability to follow up. I think they’ve got every right to ask for that too because you if someone has opened their house up, “They’ll say come in and have a look at it. If you’re interested in buying it you can. The only thing I want to know is just who you are and how we can contact you.” And the agents have the right not to allow anyone come to come through if they won’t give them those basic details.
Jane: That’s what I thought. I thought it was kind of a privacy for the vendor or for obviously having all of their goods out on display that if something happened, the agent had at least a record of people had been through.
Kevin: It’s a harrowing time selling your house. You don’t get up one day and say, “What a beautiful day. I think I’ll sell my house.” You do it for a purpose and you got to expect that the moment the seller puts their property on the market, it’s no longer their home. It’s no longer a home. It just becomes a house. It’s a place to come to but you’re in the process of selling it. And I think that’s something that good agents will tell sellers is that the moment you list your property, it’s no longer your home. We need to have the opportunity to show buyers through. So, depersonalise it, declutter it, make it as sterile as you can.
Jane: I know you’re a big advocate of training career development real estate agencies. You’ve had probably one of the longest podcasts in definitely Australian history of educating property real estate agents. Now I’ve heard on Real Estate Uncut you talk about the importance of role playing as well. How does that work?
Kevin: Well, role playing is something that I’ve got to say not a lot of agents are very happy with. They’re not comfortable with it and the reason for that is because they can end up looking like a goose in front of all of their peers. But I always say to them, “Look, if you’re going to make a mistake that’s going to cost you thousands of dollars potentially, wouldn’t you be better off doing it in the environment where you’re going to only look like a goose and it’s not going to cost you a couple of thousand dollars?” To give you an example, when I first started in real estate I was working with a great mate of mine who is still in real estate, Mark Frater, and he and I worked together as a team. We never went out and sold as a team but we worked as a role play buddy team and I’d come back from a presentation and if I didn’t get it, I’d sit down with him and we’d role play why I didn’t get it, where I went wrong with the presentation, what they asked me that I couldn’t answer and that happened quite often until I got a much better understanding. And then it wasn’t all clear dialogue, it’s very much understanding what the message I wanted to get across and then how I could best describe that in a confident manner. We used to role play this and even when I would come back with a listing or he came back with a listing, we’d sit down and say, “How could we have done that better?” Role play gives you that opportunity to constantly strive to look at what you’ve done, how could you do it better, understanding what that dialogue is and being able to deliver it quite confidently. So that’s what role play is all about.
Jane: And I guess the outcome you’re talking about a confident delivery. So for the next property or the next person you’re trying to get the sale that you could apply that. Does it get a better price for a property? Is there a correlation that you could call?
Kevin: Not really because role playing just helps you communicate with a with a seller – not so much. I think getting the better price for someone it all comes down to negotiation, understanding where you stand in that negotiation and that’s a whole different subject Jane. I think getting the best price for the seller is something that every agent should be really passionate about. Unfortunately, not a lot of them are.
Jane: You’ve mentioned negotiation a few times and I know when I’ve been part of purchase decisions, it comes down to those final few minutes in the negotiation and the skills you bring to the table. How you learn negotiation skills?
Kevin: Well, I think it comes it comes in time and there are some who are just almost born to it, but I think what a lot of sellers don’t realise is that you’re actually employing a paid professional negotiator not a real estate agent. You’re employing someone is going to negotiate with you to get to the highest possible price, so the sorts of questions I would be asking you if you were applying for the position as an agent with me is I’d be saying to you, Jane how are you going to handle it when a low offer comes in? You know that I want $550,000. What are you going to say to the buyer when they offer $490,000 as an example? What are you going to do? This is how you can test the good negotiators and the good negotiator will first of all say, “Well look, it would be fantastic if I could secure it for you at that price. Is that the best price you’re going to pay?” So you just instantly come back with a question. These are the sorts of things that you need to be looking to you agent to understand how they’re going to operate, not the level of service they’re going to offer or how many buyers can you bring to the table, but really what are you going to be doing at the point when you make or break the sale for me and get me the most amount of dollars.
Jane: It’s amazing just hearing you speak about where we might see their traditional sales training is now into understanding human nature, building relationships, the trigger points of emotions and a negotiation. It’s a whole complex I guess toolbox that the sales person has to have.
Kevin: These skills take years to develop. It doesn’t happen overnight. It takes time to acquire these skills.
Jane: So, if we go into the inner workings of how agencies actually work, how do people within an agency communicate with each other about what they’ve learned about prospective buyers to other agents? Is there a sharing community?
Kevin: In some offices there are. A lot of it’s now done on databasing. The communication within an agency traditionally is they’ll have sales meetings where they talk about what stock they’re working on, what buyers they’re working with. In the great offices they’ll talk about the difficulties they’ve had trying to close the sale, “I haven’t been able to do it. Is there someone who can give me some advice on this?” And sometimes while they might know the answer, they may have just forgotten it. They just need to be reminded of it and this is where role play can be very very valuable in transferring these skills or this knowledge. Communication in the great real estate offices is very important. At one stage, I remember when we first started there were things like bottom drawer listings. These are listings that no one knew about, secret listings, and it was in some ways a bit of a closed shop, but you can’t afford to do that nowadays. It’s very very open, very transparent. It has to be transparent because that’s one of the things that sets the great agencies apart.
Jane: And I imagine great agencies, the individual agents they would share potential buyers so if they’ve found someone who is looking for something and another agent has another property down the street that’s similar, they would share that and maybe even share that compensation.
Kevin: Yeah, they could do. Most agents nowadays become – they’ll try and find buyers for houses as opposed to houses for buyers. They don’t work buyers as much as they used to and hence we’ve seen the emergence of buyer’s agents. These are people who just concentrate on working with buyers because there are special skills and I think at a traditional agency, the saying used to be “list and last.” In fact, I can tell you Jane whether I should be proud of this or not but probably in the latter part of my active selling career, I didn’t ever put a buyer into my car. All the work that I ever did was I would list, run open houses, and that’s how I would find the buyer. I very rarely took buyers out. I didn’t use to go on roster on the floor. I wasn’t terribly concerned about buyers who walked in because I was more concerned about getting the listings and I used to work with probably five or six exclusive listings at a time either auction or exclusives and that was sufficient for me. I would normally turn those over and a 30-day period, so effectively selling anywhere between – anything up to five or six sales a month.
Jane: For a good agent though, if they are trying to seek to understand the potential buyer what are the kinds of questions they would ask for those buyers coming into the open for inspections? I know you mentioned earlier that they should leave them alone a bit, but is there a kind of time that they can actually find and probe what they can do their best pitch or help that buyer?
Kevin: Yeah, those questions come later. They don’t come at an open house mainly because they can’t really focus on the person concerned. They’re going to be worried about other people coming through, so you just don’t get those opportunities. Traditionally, you would normally ask for permission, “I’ll give you a call back after the open. There are a couple of key questions I want to ask you about this property but also see if I can help you with any others.” And when they when they do call back they won’t ask – they’ll ask lifestyle questions things like, “Well, what is it you’re looking to achieve? Why are you looking for this type of house? Because if you said to someone what sort of house you looking for? Most people tell you it’s a four bedroom house, two bathrooms, a couple of car lock up and room for the boat down the side – That style of thing. That’s not the sort of information you need to know. You need to know lifestyle questions. Ask about the family, what do they do? Is sport important? How close do you need to be to the schools? So that you can try and rather than narrow down to one or two properties you open up the possibility to five or six different properties to give the buyers some choice. It’s a totally different way to focus on what a lot of people think agents do. They’ll try and open up the opportunity as opposed to close them in.
Jane: Which is interesting for our listeners because obviously a lot of them are property investors. They’re out there, they’re talking to agents all the time and getting those phone calls from the agents and trying to be discreet and not sharing the information in actual fact they could be doing themselves a disservice.
Kevin: If you can’t have an honest conversation with an agent, you shouldn’t be dealing with an agent. If you can’t trust them, then they’re totally the wrong agent. if you get that bad vibe from them just don’t work with them because you need to be honest and open and frank. If they’re going to help you then you need to tell them exactly what it is you’re after and you don’t necessarily have to tell them the amount of dollars you’ve got and that’s your own personal information but certainly helping you achieve the goals that you’ve got. There’s nothing wrong with saying to an agent, “My goals are I’m looking for a property that I can do some renovation on. I’m happy to spend X amount renovating it but I intend to hold then for a couple of years, rent it out and then I want to sell it. So I’m looking for an area that’s going to allow me that opportunity to turn it over in a couple of years.” So, to tell them exactly what you’re after and give them the best chance to find you that property.
Jane: What a great tip. You can have multiple of agents out there looking for properties for you.
Kevin: Yeah, well you could. That’s right, exactly. I do think that’s another mistake that a lot of investors make is they don’t actively look at putting an agent in their team. That’s one of the tips that I put down is that they don’t go about putting together a team and who should be on your team. I put them in this order actually, I put the solicitor, the agents – not just one could be a buyer’s agent, could be a seller’s agent— your finance broker and your tax expert. I think those people, pretty much in that order, are the people who can help you and you need to build a team.
Jane: Absolutely. Well I’ve got to tell you I’m sure a lot of people were rushing out to get this How To Find The Best Agent To Sell Your Property e-book because I know I will be. But just getting back to the roles within the agency, what are the different roles? So we have the listing and selling agent? They’re different? Oh no, not really, no. Most agents become the listing and selling agent. There are some agents who will work buyers in an agency, but the way the commission works is that the lister will always get the – it depends on the type of listing, but they always get the bulk of the commission. To give you an example and it does vary from office to office, state to state, but just a broad brush, an auction listing for the lister will achieve a higher commission. In most cases the auction lister will be the seller as well because they get to do all the marketing therefore they get all the inquiry, they get to do the open houses, they get to see all the buyers. But in an exclusive agency where you might just have a sign there is a possibility that someone will call off that sign. It could go to the roster person, the roster person will show someone through, they would then get the selling commission. And the way it split, is that an auction lister might get 60% of the commission so the other 40% would go to the seller. In an exclusive agency, it might be 50/50. If it were an open listing, in most cases the listing agent would only get about 10%, the selling agent would get 90%. There is a reward there for the agents to sign up the more exclusive listings. Because if you’re working with someone who has given you an exclusive listing, you’ve got a fairly good chance that you’re going to sell it because in most cases 90% of the exclusive auction listings will actually sell by the listing agent.
Jane: Is there a particular fee structure you prefer?
Kevin: As an agent?
Kevin: Give me oxygen every day of the week because that’s where the hard work is, in actually securing those things. I am a listing listing agent. I’m not a selling agent. I’ve got to say, I didn’t always enjoy working with buyers. I loved working with sellers because it gave me the opportunity to actually build a stronger relationship. For some reason, buyers just don’t seem to have the same sense of obligation to the agent that they tended to shop around. You might think you’re building a good relationship with a buyer, then one day they’re driving their kids to school and they’ll see a sign, they’ll call the agent, bang, they’re gone, and the agent who’s got the listing will get the sale. So you can go down a lot of dry gullies in real estate and working with buyers are going to take you in a lot more dry gullies than working with sellers let me tell you.
Jane: And tell me, the principle of the agency, they’re also the 60/40 kind of split that you mentioned, how is that split with the principal?
Kevin: Well it’s good that I can explain that to you because the 60/40 split that I talked about is the split that goes to the agents. In a franchise group, the franchiser will take roughly 8-10% off the top, then the balance is split in the office and in most cases it’s a 50/50 split. The office will take and I say the office not the principal because that’s all the administration that goes with it and all the backup services, so it’s normally a 50/50 split and then 50% of that is split between the agents. A listing agent or an auction would typically get 60% or 90% because the franchise gets 10%. Does that make sense?
Jane: The people who are putting all the effort and the admin behind it and the marketing and branding are getting 50% of it and the listing and selling agent split as well.
Kevin: It goes into the office that pays for all the administration because the people on the administration aren’t necessarily getting a commission. They’d be getting a wage, so that 50% that goes to pay for wages and marketing and electricity and all that kind of stuff.
Jane: Now tell me, what’s the authority period and how long should vendors look at making it?
Kevin: Well, it varies from state to state but generally it’s around about 60 days. It used to be 90 days in some states, but it does vary from state to state. I think as a seller you have the right to terminate an agreement if you’re not happy with it and I don’t think that should be written into every agreement. You should say to your agent you list with, “In the event that I’m not happy with the level of service I’m getting, I want the right to be able to terminate both you the agency.” Because in some cases, you’ll find that if you have the right to terminate the agent, the agency can then appoint someone else in the office and you could be going from the fat to the fryer. So my advice is – because the agreement that you sign up is actually with the agency not with the agent. If you look at the agency agreement, you’re actually signing up with the business not with the agent. You want to have the rights to terminate that agreement not just terminate the agent if that makes sense. And you can do that even though you might sign a 60-day agency if you find after 14 days that you’re just not getting the level of service that you want. You have the right to terminate the agreement. Now having said that, if the agency won’t terminate the agreement then you could be you could be bound to it, but if the agency understands that they’re not going to get to first base with you because you’re simply not going to sell them and they will release you make sure you get it in writing.
Jane: Okay good tip. And there are different ways of selling isn’t it? There is private sale, auction, when would someone decide one over the other?
Kevin: There is tender auction. Tender an auction to pretty much the same the only difference being that auctions for public, it’s where you have the auction day and everyone turns up and they bid, whereas a tender is like an auction but it’s silent because you get to put in writing what your offer is and you’ll find that tenders generally are done on commercial properties where you have the opportunity or a development site where you have the opportunity put on conditions. But when you buy at auction, you buy on a cash unconditional basis and you must settle within whatever the stipulated period is. It’s normally about 30 days and you pay a 10% deposit on the fall of the hammer. Sale by private treaty is where you put a price on the property and that can either be done through an open listing, which means you can list it with all the agents or a sell agency which is where you give it to an agent but you still have the right to sell it yourself and exclusive agencies where you give it to one agent, but you don’t have the right to it. If you sell it yourself, you still have to pay the agent commission.
Jane: Seems unfair. How do you decide between those different types of sales processes?
Kevin: I guess the agent will describe to you what those different ones are and you need to make that decision as to whether or not you think the agents got the ability to do an auction. It pretty much – most sellers I’ve met seemed to be opposed to auction because they have this feeling that they want one. They don’t understand a lot of people think that if you’re going to take your place to auction on the day of the auction, you’ve got to accept whatever the highest bid is which isn’t true, but that’s what a lot of – and they have a fear of it and they think it costs more money. I still hear this dialogue. “It costs so much money to have an auction.” Well, it doesn’t really it probably only cost you an extra couple of hundred dollars which is the cost of the auctioneer. You still have to market the property whether you take it by private treaty or by auction. So really selling a property by auction doesn’t necessarily cost you any more money. It doesn’t cost you any more in commission, and as I said the only difference is maybe three or four hundred dollars for the auctioneer. That’s the only difference.
Jane: So, marketing you mentioned it can be expensive. How much do people actually need? Is it just promoting the agency? What are they really paying for?
Kevin: Well, no, I mean, you’ve got to you’ve got to promote the agency because that’s where the inquiry comes, so there’s no escaping that. It will be crazy for an agent to say well you’re not going to promote me because they are getting promoted, but effectively you’re putting it out in front of buyers because you can’t sell a secret. These things have got to be marketed. You know, the crazy part about this Jane, is that people will they won’t think twice about putting an ad in the paper to sell some junk at a garage sale, but when it comes to selling their most expensive property, they don’t want to spend any money on marketing and it just doesn’t make sense to me. You’ve got to put it out there. You’ve got to be prepared to spend some money. Invest some money not spend some money and generally a good rule of thumb is about 1%.
Jane: Okay, 1% of the purchase price. Okay, from a buyer’s point of view, I always wonder this question, are agents are legally obliged to pass on my offer to the vendor?
Kevin: Oh, absolutely. It’s written in legislation. If a buyer wants to make an offer, the agent has the obligation to pass that onto the seller. It’s hypothetical if once again we’re talking about a million dollar property and someone came in and offered $500,000. Well, you wouldn’t put that on contract. That’s a waste of time, but you certainly would go to the owner and say, “Look, I need to pass this onto you. Jane came through your property and she said she’s prepared to paying $500,000.” And then a good agent will say, “What do you want me to do?” Because good agents should never put themselves in the position of making the decision on behalf of anyone. Great agents make no decisions. I would come to you and say, “Well, Jane it’s a lot less than what we thought. That’s about half what we thought, but what would you like me to do?” Because for all I know Jane could turn around and say, “Look Kevin, we’ve been thinking about this. We really want to sell it, so we’d probably take $750 can you get that for us?” You just don’t know, so you got to ask the questions.
Jane: So agents are allowed to tell me if there’s another offer and what it actually is? Is there a process there too?
Kevin: No there isn’t. They can tell you that there’s another offer, but by telling you what it is, it’s a form of gazumping which is illegal and no they can’t do that and any agent who does is actually breaking the law. But this is where it becomes difficult for agents in the negotiation if you do end up having two offers and I’ve had to do this quite often where you go back to a buyer and you say, “Jane, I mentioned to you that was a popular property. Look, there is another offer in. I’ve told the owners the offer is coming in. I just want to give you the opportunity to put your best foot forward if you want to buy it. This is going to be your opportunity. My advice is to put your best offer in.” Now agents will then offer you what’s called a competing offer form just to get an acknowledgement from you that you’ve been told that there is another offer in and that this is your best and final offer, so they can take that to the seller and say, “Well look, we’ve got two offers one from Jane. It’s here and the other one is from Fred and it’s here.” And then you give the owner the rights to make the decision where they’ll except one or neither.
Jane: There’s been a lot of media recently about agencies underquoting. What’s your impression of that?
Kevin: It’s a terrible practice. It’s a practice has been brought about by what I discussed earlier which is things like price ranging and this is where it becomes absolutely rampant. And the frustrating part for buyers is that they could go to a property and it’ll be lowball by the agent who’ll say the owners are ready to sell. It looks as if it’s probably going to go for around the $700 mark, so they go ahead get all excited, go get their bullying inspection done and sort their finance out turn up at auction and find that the first bid is at $750 and that is extremely frustrating for a buyer. Now, some people would say, “Well it’s their own fault. They should have done their own homework so they’ll know what it’s worth.” Well, you don’t because I’ve been I’ve been in situations – I’ve had listings where – well there was actually one just around the corner from us only about three or four weeks ago. I actually went to the auction because I was interested to know what their values were in our area and this was an actual scenario and I turned up and I said to the auctioneer who I knew I said, “How is it looking?” He said, “Oh yeah, we’ve got pretty good interest here.” And I said, “What do you think it will go for?” He gave me the glib line like I’m an agent. He said to me, “Kevin, I can tell you that this property is probably going to sell for more than it has ever sold for before.” I said, “Well, thanks man. That’s really good advice.” But then when we cut through that he said to me, “Look, I think it’s probably – we’ll be lucky to get over seven on this.” He said, “We’ve got a reserve that’s fairly comfortable around that sort of mark so that it sort of indicates that’s where it’s going to be.” The property actually sold for $843,000 dollars. Now, I would have been disappointed if it sold for 700, I thought maybe 750, but you see how can someone know what someone will pay for a property. And that’s why lowballing is really really hard in Queensland. It’s against the law. An agent cannot give a price indication on an auction property. It’s illegal. They can’t do it and they can’t do it for a very good reason because they’re not a valuer. They’re not the eventual buyer. They don’t know what it’s going to sell for. So all they can do is give comparatives and say, “Well look, here’s a report that we put together on some recent sales that have occurred in the area. You make up your mind as to whether you think they’re good comparisons or whether you’d pay more for it.” So you leave it up to the buyer to determine what they’d be prepared to pay for it. So yeah, look, lowballing it is a major problem and I think that some governments – New South Wales and Victoria aren’t doing enough to stamp it out. In fact they’re making it worse by trying to legislate and say, “Well, let’s have a look at what the agreement is. What indication did you give to the sellers” which is an indication that they’re not able to tell the buyer anyway, so what’s the point. So let’s have a look at that and if it sells for 10% more than that, you’re in breach of the act. That’s ridiculous. So the price equation should come out of it altogether. I know I’m going to get a lot of oppositions from agents who’ll be listening to this and who vehemently disagree with me and we’ve had so many arguments about this in the last 12 or 18 months.
Jane: It’s interesting. One of the things that really annoys me is you speak to an agent and in your scenario they say, we’ve got price indications around 700 and you get to a third and final call at 850 and they go “We have to go in and talk to the owners” And they come back and say we haven’t make reserve yet. When is reserve set?
Kevin: It’s in the lead up Jane. It can be as soon as five minutes before the auction but it can be – normally it’s the night before or the morning of the auction is roughly when it’s set. But the agent will know leading up to it because agents ask the sellers each week, “Are we headed in the right direction? How are you feeling about the eventual sale price?” And they’ll be feeding them, telling them what the market is feeding anyway, so they’ll have a really good feel for what where the reserve. That example I gave you around the corner I found out afterwards that the reserve was in fact just over 700 and all the feedback was – that’s where the feedback was. But there were two people who just wanted it hammer and tongs at it and bid the thing right up to over 800.
Jane: That’s a happy day for the vendor.
Kevin: They’re great auction stories that you can tell a seller as to why they should go to auction and the agent in this particular case who I interviewed on my radio show because I was so impressed with the way he handled it. He did a fantastic job in getting the buyers there and then working with them on the floor to get them up. He just didn’t give up. He was like a bull terrier. It just kept going backwards and forwards and backwards and forwards to keep working them up, so he was there to get the highest price for the seller.
Jane: Well, tell me about this as a buyer. What’s the most effective way that I could present my offer if we’re not going to auction?
Kevin: Make it as clean as you possibly can. Ask the agent what is it that the sellers want to achieve from this because it’s not always about price Jane. It could quite easily be about the fact that they’ve got a transfer, they need to move quickly or that they’re not quite sure what they’re going to do. So they want to sell their place and they’re going to look around. So maybe they want a longer settlement. Try and find out what it is that the seller is trying to achieve and then make your offer to match that. As I said, it’s not always about price.
Jane: I know when I was putting in offers when I starting out over 15 years ago it was right down the offer, put down your conditions and then staple a check with 10% of the value on the check. Is that still the known way?
Kevin: Yeah. It’s a good way. I mean, whenever I would deliver a contract I would always want the check to be front and centre because that’s a sign that the buyer is serious and a seller is going to look at that and be it a nice fat 10% check or a 5% check and it always looks fantastic. Sometimes I even used to get cash which was also good. You might get a thousand dollars cash and the balance to come within 24 hours by check or something. But all those things are good emotional triggers and they do actually help you negotiate.
Jane: Great tips. Well I know you’ve got a lot of tips for how to choose the best real estate agent when selling your property and we’re going to put in the show notes, the link to that e-book so people can get to that because I know I’ve learnt a lot. I’ve got of pages of notes here as well. I’d like to move on just to your personal property journey. You said that you’d moved around a lot as a broadcaster and had to sell your property. Can you just take us through when you started maybe building up your own portfolio?
Kevin: Yeah. My first investment property was the biggest— no, no, it wasn’t the biggest because I’ll tell you but the biggest mistake I ever made but it was one of the biggest – was that we became ice cream lickers and we were on holidays and we were actually on Bribie Island at the time and I remembered thinking “I love this place. I could live here. I think what I’d like to do…” I can’t even believe I did this “…is I’d like to buy a block of land because eventually I’d love to build a house here and then I can retire or live here. Come here for holidays.” So I had to bring in the bank manager and I had a particularly good job at the time I was in radio and I told him and he said, “Okay, that sounds like a good idea.” Yeah that was really good advice wasn’t it? So anyway, we bought the block of land which we never built on and we couldn’t sell because there was land all around us and we ended up having to do a deal with a builder and we did it on builder’s terms, so we basically chucked the land and he built the house and we sold it as a package and that’s how we got out of it before we paid for it. That was our investment –
Jane: Well at least you didn’t lose money right?
Kevin: Oh well, we effectively did in real terms because we lost the potential –
Jane: The time and the opportunity.
Kevin: Yeah. So then we bought a unit on Bribie Island which was okay but we weren’t ready to be landlords at that time because we’re still moving around. While that was a nice investment it wasn’t the place where I would buy an investment property now. We didn’t really start to seriously invest until we got to Brisbane. And that’s when we started to buy property in probably one of the worst investments I ever made was, I did it being so cock sure of myself and thinking, “Yeah, well I know everything about property and here are my real estate agent.” So we ended up buying a property on a corner a block of land, which probably was, it was a good purchase but we overcapitalised on the renovation and we ended up having to sell it. And once again, we didn’t really lose money on it but it wasn’t the best investment we’ve ever made.
Jan: So Kevin, tell me about the best investment then.
Kevin: The best investment was probably a little house that we have on the north side of Brisbane. We still own it. I think it’s got great potential. It’s one of those ones that has always returned well and we bought it in an area after I’d been interviewing a lot of people and understood what I should be looking for. I actually applied all the right rationale and it’s actually quite a nice little property. Rents well. It’s never been vacant and it’s the sort of property – we’ve actually got it in our super scheme, it’s the sort of property that eventually we may end up living in ourselves because in a very desirable area. Well maybe it’s not the best investment. I think one of the best investments I’ve ever made is certainly the property where we actually have the studio now and while I can’t earn a rental income from it I certainly earn a good business income from it. That was a pretty good investment too. We actually own those premises.
Jane: So you have interviewed a lot of experts. This rational strategy that you mentioned, have you discovered a system that has kind of helped you in that property buying journey?
Kevin: Well, it’s not so much a system. It’s more about just applying some really good rules to buying good property. It’s got to be nice and close to amenities in an area that’s going to be very popular. If I’m going to rent, it’s going to be very popular with renters so therefore it’s close to schools, close to public transport, so all those things. It just ticks all those boxes for us and we also wanted to get an area that had – sort of near a hotspot because I don’t believe in hot spot buying. I just believe in buying good blue chip areas that will continue to improve and it’s always held us in very good stead.
Jane: You have two very successful internet property shows and podcasts and radio shows, you’re a real pioneer in this area of podcasting. Can you tell me how did you make that decision of combining the podcast and the real estate and starting that?
Kevin: I’d love to tell you it was a flash of brilliance but it wasn’t. I’d like people to think, “Wow, he’s a clever guy. Well ahead of the curve and all that.” But look, the bottom line is that I was sitting in a conference up on the Sunshine Coast many years ago and I thought there’s got to be a better way for this because here are all these people who have come out of their business for a full day or two days. I think it was in that particular case and they’re spending two days here and they’ll probably get a little bit of take away not a lot. They certainly might get two days worth the take away from this. There’s got to be a better way and the Internet had only just – this is really putting a time piece on it for you now, but the Internet had really only just started to click in. Agencies were starting to use it and I heard of this thing called podcasting and I had obviously with the radio background I thought this might be really interesting to bring these two together. So, I actually started the first podcast which was which is still running. It’s called Real Estate Uncut, RE Uncut, and that’s the show for agents. At the time, I was also doing a radio show on Fairfax Radio in Brisbane and I thought this would be interesting. I’ll record this show and whack this up on the Internet as well. Well that was a disaster because it just didn’t it work. I couldn’t get it there quick enough. I didn’t know how to market it. I didn’t have an audience. One of the things that I found is that you’ve actually got to build the audience you can’t put the show on and let the audience come. You need to build your audience with much more than just a podcast. You’ve got to give them a lot of take home value and the podcast becomes just a small part of the offering. So yeah, it’s been an interesting journey. And as I said, that’s what we do full time now. We’ve got the studio here and we’re producing content not only for ourselves but for a lot of the television networks. We do a lot of work for Sky TV as well. Our company has now morphed into being a content provider or a content creator, so that’s pretty much what we do. And the podcasts are just a really interesting side to that. I still haven’t fully discovered how you can make a podcast pay for itself unless it has a really good audience that you can market to. So yeah, it’s been an interesting journey.
Jane: Well, you tell me this, what’s your most favourite or memorable episode that you’ve done?
Kevin: Oh, I actually couldn’t. I honestly can’t answer that. I’ll say the latest one. I can’t that answer that for you, but I will say that we get a lot of feedback when we do what we call a Whip Around Australia where we go to each of the states and I’ll talk to a leading expert and probably an agent in each state just to get a bit of a snapshot on what is happening at that particular time. We try and do it maybe three or four times a year. That’s the show that actually gets the most listens because it just gives you an interesting view about what’s happening in Australia and I think that’s one of the things that I’ve learnt from this too is that each market is different and each market within a market is totally different and there’s a different story for each market even each suburb. We’ve got no shortage of material because there are different trends happening in different markets all the time.
Jane: Absolutely. Well, when you’re starting off maybe you had some episodes you’d rather forget?
Kevin: Oh, look, I’ve had some really funny ones in here. Some of our blooper tapes that I couldn’t share with you because—
Jane: Those are probably me. Oh no, that wouldn’t have been me.
Kevin: They’re blue. They’re not you. But they’re quite funny and if ever I feel down I just go and listen to some of those not because they’re blue but just because they’re funny. They’re so funny. I don’t think I’ve been guilty of putting a show to air if I could say this that I’m not proud of. And it all comes about because of the people who I talk to and I can tell you that in all the years I’ve been doing these shows, I have never ever had to pay for anyone to give me any content. And I think that’s remarkable, is that there are so many people out there who are just so willing to give information and not only information that they’ve learned, but they’ll actually then say to me, “I think this guy would be good for your show.”
Jane: That’s a really good endorsement. Well tell me, how has the podcasting actually – what’s it done for you what’s it changed for you personally?
Kevin: It’s given me a purpose. It’s given me a platform to share information. I don’t profess nor have I ever done, I don’t think to, know at all. The thing that I love is I just love talking to people. I love asking questions and I interviewing is a real craft. I try and watch some of the best interviewers in the world and just see how they ask questions. Because when I talk to someone, it’s not about me ,it’s not about my ego, it’s about me trying to get the best information out of the person I’m talking to because that’s why people are listening. They’re not listening for me. They’re listening to hear who I’m talking to, so the more interesting I can make my guests the more engaged, people are going to be in the products that we offer. Put aside the ego, I learnt that years ago, put aside the ego because it’s not about me. It’s all about the people I talk to and that’s what it’s done for me Jane. I’ve made some wonderful friends and I’m really proud of the fact that I can pick the phone up and talk to some of the best commentators in the world and even people who present great television shows. I’m regularly talking to people who host television shows and they’re quite happy to talk to me and they’re quite happy to give information. So I feel very privileged tthat I’ve been able to mix with those kind of people and learn from them.
Jane: Absolutely. Well, I guess you’ve been as I’ve said, a huge influence on me for such a long period of time and you’ve been engaged with so many investors and added so much value to real estate agents across Australia as well. What’s the kind of legacy that you want to leave on the industry? What do you want to be remembered for?
Kevin: A guy who probably provided a lot of stimulus, a lot of entertainment, maybe a sounding board. I’d be happy if that was on my tombstone.
Jane: You’re very humble Kevin. I know you speak to all of these property experts and I’m going to try to grab some of their knowledge out of your brain as well and see where the Australian property market is going in the next year, five years, 10 years and 2017 has been a very interesting year to start with. What are you seeing happening?
Kevin: Yeah. Well, I sort of touched on it earlier and I think the thing that we’re learning is that we’ve got to expect the unexpected. We certainly got that last year and I think we’re going to see more of that again this year. I think it’s a changing marketplace. I can’t understand how the legislators are making it difficult for people to invest in property. That’s the backbone of this industry. That’s what’s creates all the rental properties and the harder we make it for investors, the more difficult it’s going to be for us to actually have a decent housing market. I think we’re in for a reasonably flat market for a period of time and I am constantly amazed at what’s happening in Sydney and Melbourne and I think to myself, “This can’t continue.” I do think it’s becoming unaffordable if it’s not already unaffordable for people. We’re already seeing first home buyers not being able to get into that particular marketplace and we’re seeing a big difference between units and houses and that division is becoming greater and greater as we tend to get more supply in areas where we don’t need it and that’s why sometimes I really question these first home owners grants making it on new builds only forcing young people to buy new properties in areas where there is not enough infrastructure. I just don’t think we’ve got it right. I don’t think we’ve got the mix right and I do think that making it more difficult for investors is certainly not the right way to go. I think if anything we should be making it not so much easier for them but we certainly shouldn’t be putting obstacles in their way and making it more difficult for them with the banks making it harder for people to become investors. I think we need more investors.
Jane: Absolutely. I agree.
Kevin: But I think we’re in a fragmented market 2017 and it’s going to be a time when you want to seek some really good counsel and make sure that if you’re going to be buying property that you’re buying in some of some of those really good areas.
Jane: With the fundamentals.
Kevin: Yeah, with the fundamentals, right. One of the things I did write down in here is some of the don’ts. I think for this year would be don’t buy off the plan as an investment. I’m not saying don’t buy off the plan if you want to live in a house and you want to hold it for a long time but don’t think it’s going to be a good investment. The other one was don’t buy land if you’re going to be an ice cream licker. That’s the lesson I learned a long time ago and don’t buy when you’re on holiday. Those are some little don’ts I wrote down anyway.
Jane: That’s great advice and just finally how do people find out more about you? Where can we get information about the podcast and of course that How To Find The Best Agent To Sell Your Property?
Kevin: Well you’ll find out all that information if you go to the one website which is realestatetalk.com.au because there’s a little panel on the front on the home page there that if you click on that you’ll be able to reserve the book because it’s due out any day now or you can actually get, it it’ll take you so to a landing page and give you a lot more information about it so that’s all at realestatetalk.com.au. The other website that we do for agents, which anyone’s welcome the listen to, by the way too, I think it’s just a touch over 60,000 agents now listening to that daily podcast and that’s that at reuncut.com.au.
Jane: I have to say, you have just been a very wonderful guest Kevin and I really appreciate all of the knowledge that you’ve shared and being so wise. I really encourage our listeners to go and sign up to both of those podcasts because I know that I still enjoy them and I really appreciate Kevin everything you’ve shared with us your knowledge and your wisdom so freely today and I appreciate you being on Your Property Success podcast.
Kevin: It was a delight. Thank you Jane. Thanks for the opportunity.
John: Yes. So, he got into being a real estate agent because he thought it was easier right? You’re driving around luxury cars.
Jane: It’s amazing how often someone else’s job looks easy from the outside isn’t it?
John: Yeah, that’s right. That’s right. Well it is. It’s incredible how much goes into it isn’t it? You just don’t realize what goes on behind the scenes in those really good agencies, the training and all the techniques and he said they’re good negotiators. There’s so much to it.
Jane: We went into, right at the end, some of that role playing. All of those skills and we just –you don’t see it from this side and often you just see the agent with the pad and paper, you walk in they go, “What’s your name?” And then they annoy you like anything for weeks after going, “What did think of the property?” As a buyer that’s what you see.
John: Yeah. And when you come up against that as a buyer. You’re kind of on the receiving end of those well-practiced techniques and that kind of thing.
Jane: Without even knowing half the time.
John: Yeah that’s true but when it comes to selling, we’ve done that multiple times with the developments. There is such a spectrum between bad and good agents and even the amount of information that they can give you after an open for inspection or on the Monday after the phone arounds is, yeah, it can be really stark sometimes.
Jane: It’s interesting. Kevin’s really pulled back the curtains on the whole real estate industry for me because we only see it from as a purchaser. I only hear it from one side and someone inspecting properties. But what goes on behind it and the thinking and the methodology and I mean he’s been doing this for so many decades, his experience from that very start to then teaching other agents. He’s on stage these days. He’s actually teaching agents how to do this as well as the incredible podcast that he has with over 60,000 agents that listen to it.
John: Yeah. I’ve been listening to that show for I think must have been very early on because it feels like it’s over 10 years, but I know I think it’s only been around for seven years.
Jane: So much information Yeah.
John: But I was just fascinated when I when I first started listening to it I went back and listened to the entire back catalogue that was around at the time. And I was just fascinated by all the techniques that the agents used and so on really gave me a good appreciation.
Jane: What I really took away from our conversation with Kevin is the reality is for most people buying a property, this is huge. You purchase it and it is a transaction but there’s so much emotion and relationships that go into actually that transaction from both sides. So it was really great that Kevin could really kind of qualify that for us.
John: Yeah. And as you said for a lot of those people it’s once or twice in a lifetime thing. So they’re really experiencing it for the first time and it was interesting how we talked about some of those less than honourable techniques like buying the listing and price ranging and that kind of thing. And you get the –I was doing it just to get a valuation to refinance and so I was getting some local agents through. One of the agents came through and the place was probably worth 920 at the time and he says, “No. I think 1050 to 1.1 somewhere in that range.” I thought it’s a great renovation.
Jane: And you’re looking around and going “I’m a genius.” But yeah they’re just you lying there listing off you aren’t they?
John: They’re inherently biased to your own property.
Jane: It’s like that cartoon you see, how you see your house, how the tax man sees your house, how they valuer sees the house, how the bank sees the house, how your neighbours see the house. It’s so completely different. But it is important when he talked about the negotiation skills and even role playing those and it made me wonder from buyer’s point of view I know there’s some – I’m going to call them property tragics out there but those that want to hone those negotiation skills, gosh they’ll a lot in trying to role play different scenarios and what comes up.
John: Yeah, absolutely, yeah. And you notice too when you’re negotiating against an inexperienced agent it is so much easier. In the ultimate guy we have a template that we use for negotiating, so we start off with a plan. So you think about what your endpoint is going to be and then you have a start point and in between those two points is what we call diminishing concessions, so your next offers if you like shrink each time until you get to your endpoint. So that’s a way of setting a negotiation plan.
Jane: Some of the feedback I’ve had on that template is that either or offer that we talk about in there and it’s people who come back and said, “I never thought about doing that but gosh was it a winner.”
John: The other thing he did say about you said about stapling the check to the thing that’s something we’ve always done.
Jane: It just says you’re serious.
John: Yeah and it is. I know from a seller’s point of view when you get the offer with the check your eyes light up. You can’t help it. You think it’s a real offer.
Jane: I should quantify. I always make sure that the check is written to account that does not have the money in it.
Jane: So they can’t just cash all these checks that I have out there in the market.
John: Really? You can’t go to jail for that?
Jane: No because you put the money as soon as they accept it.
John: Oh, soon as you put it in, okay. Alright.
Jane: Nothing illegal here. Goodness John.
John: Now he did say in regard to that about matching your offer to the vendor which is also –
Jane: Yes it was a really good strategy. And just understanding those questions – the importance of questions to the agent and trying find out why is the vendor selling. And as I mentioned before that either or kind of template that we talk about with our students, it’s so clever because you’re not getting a yes or no you’re giving “So which one did you want?”
John: Yeah. So you might structure it so you’ve got three offers and say the offer three might be the full price that the vendor wanted. But the term suits you so you might have that – you want a really short settlement you want have access for all your builders and trades and all that kind of thing. So whatever that perhaps early access you can organise early access to start renovation. So whatever those terms that suit you are that’s the highest price and at the opposite end of that say, offer one might be the price suits you but the terms that suit the vendor and you found that out through the questions it might be that they need to have an extended settlement because they need to purchase another home or maybe they got a whole lot of junk under the house.
Jane: Maybe they want to release the deposit, so that they can use that for the next purchase.
John: Yeah, use it straightaway.
Jane: And that could be the fact that on their terms they want 550, their 550 price, but you get all the things that you want upfront or on their terms. There’s a 500 thousand which is what you want to pay and they get all their terms and offer two somewhere in the middle.
John: Yeah, probably a compromise between the two. But yes, both people win in that situation and as he said it’s not always around the price it’s often around those other things.
Jane: And look, if the buyer wants to make an offer, we always have these conversations with a lot of people especially like you and I call does the agent have to pass it onto the vendor because sometimes, I know personally, I have put in offers and I’ve had agents not quite swear at me but call me not nice names. This is like so lowball. There is, I’m embarrassed to talk to you. I’m not even going to give this to the seller.
John: Yeah, I’ve had them say that outright to me. I’m not even going to pass this onto the seller.
Jane: But they have to.
John: But I think you legally have to.
Jane: Yeah, exactly. So, there may be a grey area there, but I got to tell you, there was a unit that I was looking to buy and over a number of weeks we saw it listed around 420, looked at compatible units on the market at the time thinking, “Hey this is a pretty good deal.” A couple weeks later, Todd said to me, “You know that unit that was 420 that we thought was better than the rest? It just dropped to 360.” And we were not really interested we were kind of post renovation those weekends where you think, “Oh my god, what did I used to do when I wasn’t renovating. Let’s go have a look at a couple properties.” Wasn’t really doing a lot of research, we’d kind of narrowed down onto the suburb but nothing that was really concrete and then I put in this insane offer I think is like 320 and that’s when the agent had a real go at me and he came back the next day and said it’s accepted. Wow. There you go.
Jane: Okay. Geez, better get my boots on and get some finance.
John: Yeah and you might have been too shy to do that.
Jane: Oh absolutely.
John: “No, I won’t do that. It’s just too cheeky.”
Jane: And the fact is we kind of did some numbers and said look if we wanted to do what we wanted to do for this property, how much would it cost? And what was going to make it economical for us. In the end, well it was one of our case studies actually, in the end we did a really quick renovation in 10 days, less than 15 grand and had it valued at 450. Win-win.
John: I think that’s also good when you’re going in with that price even though the agent might feel it’s a lowball price, if you can actually validate why you’re putting in that offer, this is what it’s worth to me and here are the reasons why. I’m going to have to spend this much on the reno and this is the end value, that actually kind of calms the nerves and putting in some of the ___ offers.
Jane: Exactly. And putting in the offer, I did do a bit of research. We got the contract of sale. I could see it was an overseas owner. Interest rates had gone up. There was a bit of concern about where are they’re going to keep going up. They had bought it four years previous that I assumed it was so close to the university they bought it for one of their kids to be in whilst at university and so this is a motivated sale. It was vacant at the time and I could see that from the listings that it had been vacant for over a couple of months. I wasn’t just throwing some numbers out there and to be honest if you have a look at Kingsford, goodness has it gone up in value over 20 percent in the last year or so. Nice. ___ for the last 10 years.
John: But he made the point too that a good agent never puts themselves in a position to make the decision for anyone. They can give an opinion, but they’re really just passing the offer on and they don’t know the circumstances of the vendor –
Jane: Which comes back to it’s not all about price. It’s about knowing the situation and I knew that this person was going to be selling at higher than what they’re purchased for because I could find out what they bought it for. Well, Kevin shared with us how to buy, also some good rules of buying. So where do I buy, he loves blue chip. We all love blue chip. If you’re going to ___. We love blue, but the fallback as investors is obviously in areas where renters want to live.
John: Yeah, popular with renters he said also transport and schools all that infrastructure stuff that we like to talk about.
Jane: I mean people who know us and know our podcast and know our teachings, we talk about having more than 30% renters in an area, less than 70% we want to have some owner occupiers there to bring up their values properties and keep them in that blue chip kind of zone and look after the area. But kind of protecting yourself and knowing that there is a rental market there is important. So it’s interesting. It always comes back to the fundamentals and every expert we talk to is talking buy the best you can, the best area you can. If it’s blue chip fabulous. The investor grade property and making sure that renters want to live there and some of those characteristics that renters want are transport and schools. Yes. It’s just the fundamentals.
John: And you asked him about his legacy. I mean what a fantastic career he has had. He has been – not only the radio shows, but he has been the first into podcasting and at such high quality stuff in such a long time week in week out. And he said he’s never produced an episode that he wasn’t proud of and you listen to it and you just know that. It’s such a high bar he set.
Jane: And the fact that he’s so passionate, he’s still creating all these new things like his e-book that he’s got about How To Find The Best Agent To Sell Your Property
John: Yup, which will be show note.
Jane: So passionate about these things. It was a really great episode. I just I loved talking to Kevin because he’s just always so insightful and he has such a depth of knowledge personally but also through all the people that he speaks to what’s happening in the market. So I learned a lot. I’ve got pages of notes yet again.
John: Me too. Me too.
Jane: So, well John…
John: Is it that time again?
Jane: Of course is that time again.
John Blackman: Yes. It’s that time again where you get the chance to test your suburb knowledge while the entire nation holds its breath. Ladies and gentlemen, it’s time to play, Suburbs Against the Clock. The rules are simple. To play, all you have to do is answer a question about 10 suburbs in the city of your choice within 20 seconds. The lucky winner of Suburbs Against the clock will win 1 year’s free access to Your Property Success Club. Your Property Success Club is an in-depth monthly master class which gives you the practical tools needed to grow your portfolio yourself without having to spend a fortune on expensive seminars or even leaving your own home. So, who do we have standing by to play Suburbs Against the Clock?
John: Hey Paul, how are you doing?
Jane: Welcome. Tell us a bit about yourself Paul. Are you an investor?
Paul: Just starting.
Jane: Ah. Now Paul, are you in the Your Property Success Club?
Paul: Yes I am.
Jane: Well if you’re a winner. You’re up for a big surprises next year as well. So let’s hope. Now what city will you be playing for? You take it from here John.
John: Where would you like to play for?
Paul: Brisbane, thanks.
John: Brisbane. Fantastic. All right. Jane has picked an easy one for you.
Jane: I have sensible questions.
Paul: Great one Jane.
John: Are you familiar with the rules Paul?
John: So you’re just going to come up with 10 suburbs in 20 seconds. And the question is, “Can you name 10 Brisbane suburbs that are regarded as blue chip suburbs?” Clock starts now.
Paul: Ascot, Paddington, Corinda…
John: Three. Ten seconds.
Paul: Geez, Hamilton, Valley, Murarrie (?) Hills…
Jane: Paul that’s 20 seconds. I thought was so easy.
John: You should have chosen my question. Paul would’ve got it.
Jane: Suburbs over a million dollars is that the one?
John: No. Don’t give away all the questions.
Jane: Okay, okay. Oh. Paul, I’m so that you missed out. It was so close too. Next time.
Paul: Thank you very much.
Jane: Oh well, thank you so much for being part of it Paul. We really appreciate it.
John: It just gets better and better doesn’t it? And if you too would like to test your nerves, your steel in the most high stakes suburb in Australia and possibly the world…
Jane: Wow, wow. We’re really getting out there now.
John: Simply e-mail [email protected] and use the subject line Suburbs Against The Clock.
Jane: And it’s really great that we’re getting some people that are now emailing us saying, “Hey, I would like to have a go.” Great price up for grabs too.
John: Yup. Please keep those suggestions coming too.
Jane: Absolutely. We’re running out of questions.
John: Thanks for helping us out.
Jane: A huge thank you to today’s fabulous guest Kevin Turner. And now if you would like instant access to the transcript plus get access to some free training we have for our community and all of the show notes and links to everything mentioned in the show, simply go to www.yourpropertysuccess.com.au/ep16. And you heard on the show Kevin has just completed his e-book, which I highly recommend you go check out How To Find The Best Agent To Sell Your Property and all those details are in the show notes, which again is your property success dot com do A-U, the letter E for echo, P for papa and the number 16. So, that’s all for today, stay safe and here’s to your property success.
John Blackman: Ladies and gentlemen, it’s important for you to understand that you need to take care in applying what you’ve heard on this podcast to your own personal circumstances. Every one’s situation is different. And while we go to great lengths to ensure that everything we share is accurate, the information in today’s podcast was based on personal experiences and opinions and is not intended to be specific to your circumstances. We are not real estate agents, financial planners, lawyers or accountants and are not liable for any loss, damage, or misunderstanding caused by reliance on any information provided or inferred. We highly recommend you seek out the services of a professional or mentor to help chart your own path to property success.