With so many great conferences in Australia and New Zealand, why do so many agents and business owners travel to the USA to attend conferences like Inman Connect? That is what we asked Heath Dockary when he was in New York.
Topic – Understanding the challenges ahead
Mentor – Heath Dockary
Kevin: Heath, let me ask you firstly why you decided to come? We’ve got so many great conferences in Australia. What is it you thought you’d pick up from coming to America?
Heath: Well, America’s the leading industry in the world in real estate. It’s cutting edge technology. It’s always been that step ahead, primarily because of its size and scope, plus there’s always things I can learn from other people Kevin.
Kevin: Yeah. We’re learning a lot of lessons here about commissions, and things don’t change no matter where you go in the world. There’s always tax. Not so much a tax, but challenges on commissions. Commissions in America, of course, are much larger than they are in Australia. Do you think that’s been an advantage for us that we’ve had to work from a lower commission base, and therefore, not so much have smaller teams, but be a lot smarter on the ground?
Heath: There’s two schools of thought when it comes to commission, and like anyone, any consumer just wants to see value for money. Now, that value for money will come regardless of who they select based on the decisions that they’re going to make. Yes, we are starting from a much, much lower base, but that base forces us to provide a level of service that is duplicatable and replicatable. Here in America, I think it’s gotta be spread a lot wider with buyer’s agents, seller’s agents, brokers, and the like. Whereas in Australia, the vendor or the consumer is very, very set on ensuring that they’re going to get their dollars worth out of the selection or the criteria that you’ve given them.
Kevin: The multi-list system, MLS as they call it in the States, is actually quite entrenched. I just question whether that has some legs given that we talk about challenges on commission. The brokering system here, as you’ve just said, is defined between buyer and seller, so you have two sides, three percent each side. There are different models coming in now that we’re hearing about. It’s going to really challenge that.
Heath: Well, that’s one of the reasons why I came here. So, there’s some big disruptors in real estate in Australia at the moment, and it’s being led through social media. It’s being lead, primarily, through American real estate, and the MLS and versions of the MLS will start to morph and move into our Australian market over the years, primarily because people are far less trusting these days of a system where …
Heath: So, they’re far less trusting of a system that doesn’t cater for their specific needs, and the belief structure some vendors have is if more people are working on it and more people have got an opportunity to sell their property, more people are going to get them a better result, and that’s not always the way.
Kevin: Yeah. You built a great business. Your business is very robust. You’re one of Sydney’s leading agents. What have you done to make yourself stand out? How do you meet that consumer need?
Heath: Well, we’ve identified very, very early on, specifically, what our strengths and what our weaknesses are. Now, our strengths are identifying where a vendor’s expectations lie very early on in the piece.
Kevin: Price expectations?
Heath: Price expectations-
Kevin: And service?
Heath: … and service expectations.
Heath: Service expectations are the key.
Kevin: Okay. Let me ask you then. How do you find those out? What sort of questions do you ask?
Heath: So, when we meet with a client for the very first time, we’ve conducted our interview, we’ve determined whether or not they’re going to work forward with us and we’re gonna work forward with them. We’ll then sit down and have a, what I would call, an expectations meeting where we have a conversation just like this and we determine what their expectations are, what their limitations are, and what their beliefs are around what they should get from us and what we would be delivering back to them. That way, we set the foundation of that relationship moving forward and there’s no uncertainties and there’s no questions being raised after that.
Kevin: Because quite often, people will only ever buy or sell a property once or twice in their entire life. Sometimes, they don’t know the questions to ask. How do you … When you find someone like that, how do you talk to them?
Heath: It’s a very good question to ask. Everyone’s different. Everyone has a different mindset and a different expectation of what’s important to them. So we’ve got to delve into that fairly quickly, but we also determine what their buying criteria … Oh, sorry … buying experience was when they first purchased the property. What their expectations were based on that, and what they would change around that expectation or around that experience. Then, we would try and determine how that experience this time around is going to work, both from the seller’s side of things and the buyer’s side of things. But it’s not just those two dimensions. What we’re now dealing with with banks in Australia very, very, very tightly holding their funding and taking much longer to determine whether or not a property is going to match their criteria for evaluation. And if the property does go forward to an exchange, it’s then determining if the bank’s going to stack up the valuation to the number. That’s where it becomes quite contrary to the decision-making process from when you’ll get appointed as your agent to when you exchange your contract.
Kevin: When you meet a seller for the first time, assuming you’ve been called in to do an appraisal,-
Kevin: … the one thing that I want to know is the price.
Heath: Of course.
Kevin: Tell me how you handle that.
Heath: I very rarely give price. What we’ve-
Kevin: Why is that?
Heath: ‘Cause we can’t determine a price of what a property’s going to sell for in 6, 8, 10, to 12 weeks time.
Kevin: But you’ve got an idea, haven’t you?
Heath: We’ve got an understanding in who our buyers are going to be, where the buyers are coming from based on their buyer behaviour and based on our tracking activity. We’ve also got an understanding of what properties have sold for in the area, what buyers liked and disliked about those properties because we speak to 50, 60 buyers per week. We get a very clear understanding of what’s important to them. That allows us to sort of frame how our home or our property needs to be to meet that specific criteria for those buyers to create that level of competition, so the property sells for close to, if not more than, what our predicted price is going to be. I say predicted price because we’re trying to forecast into the future who’s going to be bidding at the auction or how many buyers are going to be remaining on that property after the four-week campaign has completed itself. Does that make sense?
Kevin: It does make sense, but the one thing they want to know is the price.
Heath: Is price. Of course. So, I will give them an idea of where we believe the property sits within a 5 to 10% range. I’ll base the criteria on what their expectations are and what we hope to achieve, and most of the time, we’ll either hit that mark, exceed it, and achieve where we’re needing to hit that price point within 60 to 90 days.
Kevin: Yeah. Of course, most sellers want more than their house is worth. Not a lot of people will admit that, but it’s the truth.
Heath: Yeah, it’s called pride of ownership.
Kevin: Exactly. They’ve got every right to expect that.
Heath: Of course.
Kevin: So, therein lies the problem because you’re going to go into some … I love the way you phrase it, the expectation meeting, ’cause it’s a perfect opportunity to unpack that.
Heath: Of course.
Kevin: What is your expectation?
Kevin: We’ve called you in, you’re the agent, you should know prices,-
Kevin: … so, therefore, you tell us what you think it’s worth. Well, it’s not what I think it’s worth. So, that’s the kind of dialogue that, I think, a lot of agents struggle with.
Heath: The moment someone uses the word “I,” as a real estate agent-
Kevin: Uses the word?
Heath: … as a real estate agent,-
Kevin: Oh, yes.
Heath: … you’ve lost the game.
Kevin: Interesting. Tell me why.
Heath: Well, it’s not about me. It’s not about my opinion. It’s not about my world. It’s not about my beliefs. It’s not about me in any way, shape, or form. It’s about you.
Kevin: You said you try and build a team relationship with the seller?
Heath: Yeah. So, for me, for us, my team and I, when we operate, we operate with a client. We form a relationship that works together. It’s us versus the market as opposed to us versus the vendor ’cause once we’re on that same boat and we’ve got to get them from A to B, we’re in it together. There is no delineation. The vendor likes that because they trust to give us the keys in the first place, and throughout the course of that whole process or that relationship, you’re compounding and confirming their initial expectation of, “I trust you and I want you to work with me, so let’s get this thing done together.”
Kevin: Heath, thank you for joining us. Particularly, thank you for coming to New York with us. It’s been delight … We’ve had some wonderful times together, you and I, and more to come, I think.
Heath: Oh, definitely.
Kevin: More to come.
Heath: Definitely. Yep.
Kevin: Heath is one of the leading agents from Di Jones in Sydney, and he’s been our guest.