Never Get Caught for Underquoting | Matt Lahood reveals how...

Currently, we have an oversupply of listings in all markets (including Perth). Agents who are not skilled at ‘narrowing the gap’ will have lethargic stock levels. Here is what to do between now and Christmas to get your listings sold.

Before Matt Lahood was the Founder & CEO of The Agency, he'd been an outstanding agent for decades. He reveals his technique for closing the gap, and preventing underquoting (or overquoting).

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Transcript

Tom Panos: 0:00

Firstly, oversupplied listings is a killer to capital growth, but it's also a killer to making sales if an agent doesn't know how to narrow the gap. But before we actually move in, that's the topic today narrowing the gap in all markets in Australia, including Perth. Now, Matt, Yep, including Perth, Including Perth. Days on market are starting to grow. Stock is starting to grow. All of a sudden yep, All of a sudden, including Perth. Days on market are starting to grow. Stock is starting to grow. All of a sudden yep, All of a sudden, including Perth, which was the standout market.

Matt Lahood: 0:29

We are here to talk about closing the gap which is appearing, matty tell me you've got a helicopter view of all of Australia right.

Tom Panos: 0:39

What is happening now with stock levels and what is happening with buyers, and why are we talking about narrowing the gap?

Matt Lahood: 0:47

Well, tom, I think, look, anyone that knows, anyone's been watching this market, knew that there was going to be probably a lot of property coming on towards the end of the year and anyone that's following it closely realises that these interest rates were going to have an effect. Some stage we were seeing it not happening, but eventually I think it's caught up. I think, coming into the end of the year, with Christmas, a whole lot of things all barrelling into the end, and we've got people just working out. You know, will I go that extra bit Now? We've got what's I think hurting the market right now is.

Matt Lahood: 1:25

My view is that there's a talk about the interest rates dropping all of a sudden. Yeah, so are people saying, will I wait because? Will I wait till my loans a bit less later on? Will I buy in the new year? There's all these different things in people's heads because there's that much information out there that people are using that now as we'll wait for next year because we'll be if we take a mortgage and you know it depends. Most people are on floating rates, so there's the conversation that's not probably relevant, but I mean there's people using that now as a thinking and there's vendors saying, well, I'll wait until next year now because I might get a better price if the interest rates come down. So they've got all this road noise out there at the moment and I think it's really simple. You've just got to focus on what's in front of you and there's.

Matt Lahood: 2:20

These gaps appeared because you know like people have an expectation they were going to get something that might have sold three, four months ago. That's now not. There's more buyers and there's more choice. Sorry, I should say there's more sellers than buyers at the moment. That's what we're hearing right across it, including Perth. Look that 10 days on, market's probably blowing out now to about 20, so there's more properties that have come on. But look again. But we've gotten used to all different markets at the moment, clearance rates being 75 down to 65, in some instances down to 55, um, and that's going to continue as we go through the year. We're just at the end of september, right, so it's probably a big eight weeks coming up, but these gaps could get bigger, tom, between now and the end of the year.

Tom Panos: 3:09

Yeah, well, I would. The rate of supply will be a lot stronger than the rate of buyers, right, so less supply will grow at a faster rate. So what can agents do, matt, between now and Christmas, not to be caught up with having this fatigue, lethargic stock levels just seeing that?

Matt Lahood: 3:32

Yes, what I used to do, tom, is pretty simple. Right, I took all the risk out of the equation of being sued by anybody buyer or seller, Also took the risk out of the Office of Fair Trade incoming and tapping me on the shoulder. So what I did is, when I'd appraised the property, I gave the owner three sales one that wasn't as good as theirs, one that was better than theirs and one that was same as theirs, those sales and then I got the owner to sign on the bottom of that, those comparables, to say that I'm okay to hand them to the buyer. So, and I laminated that and I'd give that out. So these are my owner. My owners agreed for you to see these three sales. Then I'd give them the opinion of the sale, of the value which was on the agency agreement and that would be probably the lowest sale to the highest sale range that we agreed on. Then I'd give that out to the buyer. So the buyer would say what's it going to sell for? I said, look, here's what I've told the owner and here's the free sales we used to come up with it.

Matt Lahood: 4:35

Never, ever, ever did I get sued. Did anyone whinge? Did anyone complain? No, buyer said you lied to me. No seller said you lied to me. And what they would then do is the buyers. The smart buyers would say well, which one of these sales do you compare to this house? Right? And I would say, well, that's where free, open market, you know, bidding is. You've got to work out which ones you feel is comparable to this home. So it'd normally be the one in the middle which was the comparable one. But everyone would see value. And that's why we're going to option, because you know, I reckon my favourite line, tom and I know you've used this before on my behalf is real estate doesn't have a recommended retail price.

Matt Lahood: 5:19

So that's why we're going to market.

Tom Panos: 5:21

Everyone remember that sentence. It's very useful to use in a lot of applications. When you're talking to owners, an owner says I know what my home's worth. They always say that I know what it's worth, right, mr and Mrs Vendor? Unlike a plasma TV at Harvey Norman, real estate does not have a recommended retail price. There are 43 people that have seen your home and there are five that are registered here. I'm really certain that in 10 minutes you're going to achieve market value. Whether you accept it and you keep bend or value is up to you, but five people can't get the price wrong today, right? I love crowdsourcing your numbers.

Matt Lahood: 6:07

Blame the crowd. That's so good what you just said, then. And the other thing is like agents have got to get smarter on, we're negotiators, right? So our job is to close the sale. I used to say, tom to you know, I don't know why, um, and we use this as your a-grade team, but I'll give them some a-grade dialogue, that's given you a test ride of the real estate gym.

Tom Panos: 6:29

In the real estate gym, we've got all the information you need to succeed, whether it's prospecting, listing, presentations, scripts, dialogues, how to actually have the best templates and have a process-driven business. You can join the Real Estate Gym. The doors are open now and it is less than one coffee a day as an investment.