Why Auctions Are the Most Transparent Way to Buy Property | FUNdamental Fridays

And I've got tactics, mate.

Yeah, I think you told me about your tactics.

I've got magic tactics, yeah.

It's public.

I'm out in the public, right, like you.

Boo!

You're tuning in to the property couch.

Australia's number one property, finance, and money podcast,

featuring the Titans of the industry since 2015,

where trusted by tens of thousands of investors

on their journey to financial peaks.

This show is powered by more.

You know, folks, welcome back to the property couch.

Well, yes, it is.

Chapter two, and you're probably wondering, wait a minute.

When did a Friday episode drop?

You don't do episodes on Friday?

Well, no, it's the new chapter.

And yes, we're going to do new things and try new experiments.

And this is exactly one of them.

And I have the privilege of introducing you

to one of our new couch crew, Ben Thompson.

Happy to be here.

Welcome to the couch, mate.

Thanks, Ben.

Good to be here.

Good to be part of it.

Now, people will be saying, who are you?

And where do you come from and how do you fit into property?

So, what do you spend your time doing?

Oh, jeez, that's a good question, Ben.

I'm very privileged.

It's what I would say in terms of what I get to do.

So during the week, I, I guess, help people achieve

their next property goal.

That's being part of my job.

And then on the weekends, I get to go out there

and do it another way and do a few auctions.

Wow, he's being very humble.

He's being very humble.

He's a QPA, which is a qualified property investment advisor.

And he's done hundreds of plans in terms of helping clients

look after that.

But he's also, he puts his cape on on the weekend.

And he's a real estate agent and an auctioneer.

And how many options have you done in your time?

Oh, God, that's a good question.

Probably just over 1,000, I'd say.

If I was guessing, I've done probably about seven years now.

Probably averaging out.

What's that, 1,5200 a year?

Sounds about right.

So, give or take.

So now, the concept of this particular show,

this experiment that we're running right now

is about the hill that you will die on.

Right.

Now, and this, what we're going to do as part of these episodes

is we're going to explore areas of money, finance.

But today, we're double clicking on, probably,

that was a triple click.

That was good, man.

Double clicking on the property story, right?

So, I'm going to put you into a scenario.

And you're going to tell me the, what hill would you die on?

So, my scenario is this, how do you like buying property and why?

Okay, I'm going to be biased, aren't I?

Look, do whatever you need to do.

That's okay.

So, I would say auction, clearly the most transparent.

I'd say that's the biggest benefit

through all my experience.

Explain what do you mean by transparency?

You get to see who you're competing against.

And at the end of the day, you can see what someone else has just paid.

Yes, at the end of the day, right?

You're not dealing one-on-one with an agent who's sitting there

and telling you, hey, I've got another offer.

Are there somebody else?

How do I know?

Yeah, I can physically see it.

I can look at them.

I know who I'm competing against.

I know how they're bidding.

I know how they're standing.

I know who they're standing with.

I can read their cues, body language, all those things.

So, then I can try my best to try and, I guess,

manipulate that if I'm, this is if I'm the ink.

Yeah, if I'm bidding.

If I'm bidding, if I'm bidding, I'm not the auctioneer in this one.

But we are going to flip the call here.

We're going to have to do both, right?

Because we're going to do both.

So, you're in an auction and yes, you.

So, you love the idea of this transparency.

Yeah, because I think in a lot of ways,

people see auctions as a lot of a user would scary

or daunting or overwhelming or those sort of things.

When you understand the process behind them

and you understand sort of human behaviour,

they're actually really easy to deal with.

And if you understand that the agent, the auctioneer,

they're not the ones you're competing against.

They're just there facilitating a process.

The people, the person you competing gets the other buyers.

And once you understand that.

But I mean, but it brings out the most anxious moments

in most people because it's public.

I'm out in the public, right?

Like in terms of, and it's like public speaking.

I have to not only declare my hand,

you know, and in some states, I've got a paddle,

I've got a register and all that.

But in Victoria, I've just got to just wrap it up.

But so that's like, but I feel nervous about that.

So not only am I emotional in the sense

that I've got a big financial decision

that I'm trying to make and I might absolutely love the property.

But I'm not sure that my budget's going to get me there.

But you know, again, get past all of that

and then you're seeing the transparency piece in there.

Yeah, I transparency piece is huge.

And then, yeah, I felt what I would say

and we talk a lot about planning and goal setting

and those things, right, and like with an auction,

it's having a plan, having a strategy,

knowing how you're going to go in there and approach it.

Yeah. And if you get all those pieces down part,

then it doesn't need to be scary.

It doesn't need to be daunting.

You've just got to understand the process and how it works.

And if you spend time putting energy into learning,

yeah, it's easy as I said.

And then with the benefit of that,

is it's transparent as well when you're there.

You can see what you're up against.

There's no smoke in mirrors.

Yeah.

It's just, I've bought privately, EOI,

and I've bought the auction, obviously, I've run auctions,

but just every time I've bought it auction,

I've just always leave going, yep, that was the number.

I got that right.

So because we all have that sort of buyer's remorse

or at times, yeah, that's happening.

And that's off the back of the lack of transparency

when it comes to...

You don't know what the other person paid.

Expression of it.

I remember, I know on a property that I bought for a client.

Actually, no, I didn't buy for a client.

I bid on an expression of interest

for a two-bedroom property in Elizabeth Bay,

beautiful property, one of the go after Art Deco,

this is years ago, but it was an expression of interest.

And I think my offer at the time was 9.13.

And the highest bidder was 9.47.

So it jumped from 9.13 to 9.47.

Now, that property would be probably 1.5 million dollar property

today, but at the time.

And I'm like, that's just, they paid 30 grand more, 40 grand more

than they needed to pay.

Correct.

Because it was hidden.

Correct.

It was a hidden discussion.

Correct.

So, all right, so transparency is, you know,

auctions, that you want to buy a property on.

Yes.

So your preferences to buy a property is in there.

Now, fortunately, in markets where they're strong demand

and strong demand will hopefully lead to future value and price growth.

That is, obviously, where most auctions are handled.

But we are seeing, and obviously, Melbourne's the auction capital.

And we are pretty much, yes.

We get over 1,000 auctions, pretty much on a typical weekend.

So, I want to reverse the conversation.

So, I'm an experienced bidder, and I'm coming to the,

I'm coming to the auction, and I've got tactics, mate.

Yeah.

You told me about your tactics.

I've got magic tactics, yeah.

So, as an experienced bidder, and I've probably bid now

over 500 properties and auctions.

So, let's say my tactic is to offset some of the other people

who might be in the audience.

That's your job.

Who are thinking about bidding, yeah.

And so, one of my tactics might be,

you know, seeing my least favourite thing ever, but here we go.

That big crack that I see, or the, is that a deviation in the wall?

Yeah.

Or, wait a minute, is that roofline straight?

I mean, surely, surely that structural.

I've had you before.

Yeah.

This is always one.

It wasn't me.

It wasn't me that opened up.

So, obviously, you're the auctioneer, yeah.

And you've got to now try and keep everyone interested in the property.

And not worry about that big bow in the roof that I've just pointed out.

And now, you're my favourite, right?

Because he's the reality, right?

The ones that ask that, always, the ones that start bidding.

So, when you start bidding, right?

Well, all of a sudden, hey, ladies and gentlemen, how good is this?

The person that's asking all the questions,

the other one, bidding.

So, you should get confidence out of the fact that how much diligence,

how much research, how much information this guy knows.

And he's bidding.

Doesn't it give you great confidence knowing that that's not going to be a challenge?

Now, what, yeah, so that's a good one.

I mean, the other one that's often used is there isbestos in this property,

and that's another one that's also up there.

You know, because then it's not your research event.

Well, yeah.

But the other people might not have done there, you know,

building and pest and so forth.

And they may not still know that I'm a developer that's going to knock it down

and put three tannas on the site,

or whether I'm interested in the property and its current format.

So, I have still created a bit of doubt you do in terms of that.

Yeah.

So, that's one way.

Now, what about, you know, I'm now referring to you as by name.

You know, so interesting one.

So, I'm like, I'm standing close to you,

and I'm feeling like we've got a relationship event.

So, I'm going to say 5,000 more thanks, Ben.

Yeah.

And look out at the rest of the crowd and see what they're going to be doing.

Yeah.

It's a good strategy.

That's what I do.

Yeah, to your point, I think, you're trying to,

your role as a buyer is to try and exude confidence to be able to demonstrate

I am going to buy this.

I have a relationship here.

I am in front.

There is nothing you can do that's going to put...

I'm in the false position here, right?

That's what you're trying to put out there when you're trying to bid.

So, then, you know, your role as the auctioneer,

if I flipped that, is just to try and control that environment,

keep it calm, reassure people.

They're really simple things, right?

Like, he looks confident,

but you guys have no idea what he's got to spend.

So, just give your best.

What strategy did you come with today?

And it's guiding people through that process.

It's knowing when to speed up, when to slow down,

when to give them time, when to put pressure,

when to try to close, when to resell.

There's different tactics that you can sort of bring in as the auctioneer.

Because, really, to your point, as a buyer,

when you're bidding, you're trying to control the process.

And I said at the start, right?

The agent's auctioneer's job is to try to facilitate the process.

So, really, when I'm an auctioneer,

I'm trying to give everybody the best chance

to buy the house they want, right?

They're coaching it to participate.

And I'll give them as much time as I possibly can,

and as much room,

and just really try to make it as simple and easy as I can.

When I'm bidding, I'm trying to speed it up.

I'm putting pressure on the auctioneer.

Are we on the market?

What's going on?

Let's speed it.

I want to close.

It's just so you can...

So, then, to your point,

when you've got an inexperienced auctioneer,

those things can be easier, right?

Because all of a sudden, they feel pressure,

like, oh, I've got to sell it to this guy.

I've got to sell it to this guy.

But when you've done it enough times,

you've just got to manage that conversation in the right way.

And you're just simply saying to the per...

Hey, Ben, I know you want it,

but I'm just going to give these guys a chance.

I'd do the same if it was your house.

Give us a sec.

You know how to take your time.

So rush.

Have a little day.

The dialogue's over.

Right, aren't they?

They're obviously...

That's experience and skill

in terms of building that together.

So, make, welcome to being part of the catch crew.

Pleasure.

We're going to see you throughout the course of the year

on the catch bonus.

This is...

Looking forward to it.

That's going to be comfy.

Yeah, it is looking good.

And so, let's just recap.

In terms of the hill that you will die on.

Die on the drainage...

So, the hill that you'll die on.

If I'm buying.

If you're buying,

is you want transparency in that process?

I do.

I can't.

And so, you prefer your preferred method

of buying is through auctions.

But we've flipped that conversation

around what you need to feel comfortable with.

So, always remember, we've said this many, many times

in Bryce.

Lead this conversation.

But we talked about it being theatre sports.

So, if you're not used to it,

go to a couple of auctions.

See how they play out.

Okay, if you're going to be bidding for yourself

because they're a professional...

Least six.

A minimum of...

There's a minimum of us.

A minimum of six.

So, don't die on that hill

unless you know that process.

So, that's a wrap for the very first episode of our...

Got through it.

What hill to die on?

Welcome again.

It's been exciting.

Now, if you have a question,

if you want to ask one of our couch crew,

what hill do you need the answer to die on?

What thing that you want to extract

from the experts that we have on the property couch?

Just send it in through our speed pipe

on the property couch website or right to us.

And we will add it to the queue

of what hill you will die on.

Thanks for watching everyone.

And until next time, remember,

knowledge is occurring.

But I don't need to act on it.

It's hard to do.

Hey folks, Opti here.

Your smart money sidekick inside more.

Just one quick thing before we sign off.

If you're new to the property couch community, welcome.

One quick tip to help you get the most value from the show.

Our first 20 episodes

cover the foundations we build on every week.

And yes,

listening on one and a half speed

is totally acceptable.

If you're short on time,

download our free binge guide.

It distills those episodes into one easy read

with heaps of visual diagrams.

Alongside free tools inside more,

you're all in one financial home

to help you organize your money

and plan your next best move.

Check out all the links in our show description.

And just a quick reminder before you go,

anything we cover on this podcast

is general in nature.

It's not considered to be financial advice

and we certainly recommend that you seek out

professional advice

before making any financial decisions.

Once again, everything mentioned

is linked in the show description.

Ready when you are.

Catch you next week.