The truth about rate cuts: What the economists aren't telling you 🗞️ Real Estate Market Wrap

3:44 - Effective Real Estate Pricing Strategies and Vendor Discounting
8:25 - Becoming a Data Driven Real Estate Agent
9:21 - Real Estate Agents Exposed by Market Challenges
11:45 - The Impact of ChatGPT on Real Estate SEO
13:17 - Overcoming Health Challenges and Embracing Life's Adventures

My Clearance Rate: 4/7 SOLD

Transcript

Tom Panos: 0:01

Don't think that just because rates go down, prices go up. My first real big official day of auctions for 2025 has just taken place. I did a couple last weekend. This week there's more stock. I did seven auctions today Sorry, seven were scheduled. I did six auctions and four have sold, though one of them had sold prior. But if I was doing what every auctioneer and agent does, I'll just give you the total number including the sold priors, and that is four out of seven.

Tom Panos: 0:45

And what is the market like? It is a mixed bag. It's definitely not booming and I can tell you 100% that this marketplace seems to have a little bit more buyer energy than it had towards the end of last year. It remains to be seen whether that is because we've had lower than normal stock levels for the first six, seven weeks hi Aaron of this year and that a stock is coming on now. That will get a clearer picture.

Tom Panos: 1:20

And, of course, the big, big news is the rate cut. The rate cut that the markets have factored in a 90% chance of actually happening on Tuesday. For me it's not a massive day, because I can tell you that when you look at governments and when they adjust rates, you look at governments and when they adjust rates generally speaking, they adjust rates going up fast and consistently, as we saw the last few years when they adjust down is that they're much more cautious. So there's every possibility that if we do get a rate cut in February, we might not get another rate cut for some time. And don't be surprised if we do get a rate cut on Tuesday that Albo might be actually announcing the election. Obviously, the mood will be good. That's the time to go. However, I said it last week, don't think that just because rates go down, prices go up. You saw what happened the last few years. Rates went up 13 times, so you would have thought prices should go down. They didn't. They kept going up. And the reason why is real estate markets are far more sensitive to demand and supply are far more sensitive to demand and supply, and whether a rate drops on Tuesday by a quarter of a percent and on a million dollars that's about 50 bucks a week it's neither here nor there.

Tom Panos: 3:08

For many people, For a small cohort of people, 50 bucks a week is a lot of money. What's your view? The markets are saying there's a 90% chance of a rate cut. I actually think to myself. No way in the world would I be thinking it's 90%. There's every possibility in the world. Right now, sandra Bollock is unsure what they're going to do on Tuesday and it's a decision that they're going to make you know closer to the time that they're making. That's my view. I mean, in some of the media today they're saying is it's really more like 50-50, not 90-10.

Tom Panos: 3:44

So yeah, and I've got to tell you I've been, I use, and I don't know why real estate agents don't use it more regularly and that is a big metric that I look at is vendor discount. Vendor discount and that is how much a vendor discounts the price of their property to sell. It got the app on your mobile phone press markets and then you just type in the suburb and then there's lots of KPIs that you can check on a suburb. But the one that I really like is the vendor discount, and the reason is it's showing you how much vendors have to discount their property to get it sold. Hey, asia. So if you go through the exercise and, by the way, for the record, nearly everyone is discounting, end of story Only a very small proportion of properties are ever sold at the list price or over the list price.

Tom Panos: 4:54

It is stock standard that a vendor is going to be dropping, reducing, aligning use the words that you want to use to actually sell their property. And the reason why? It's very simple it's not a buyer that determines on whether a property is going to get sold, it's a vendor. Because it's the vendor that chooses on whether they adjust their price and whether they accept an offer. And if you go through RP data you will see that late last year vendor discounting was hovering in many areas at over 5%. In some areas I saw it was 7, 8%. So if you think about it, a $1 million property people would have to drop that property by 80 grand to sell. When I was in real estate we had a formula that used to get property sold in any market and for good prices, in any market and for good prices. It was actually called list, adjust, sell.

Tom Panos: 6:05

Every vendor should be given the benefit of the doubt to try and get a good figure in the first week, and that's why I think really good agents what they do is they'll go out into the marketplace at least for a few days or a week, guiding a higher number, aiming for a higher figure, because there's always the potential of a heart buyer, and a heart buyer is an emotional buyer that will pay overs. So I think it's really good to go in and every vendor deserves the benefit of getting top dollar. But if you don't and you get your buyer intel and it's telling you you're at the upper end. What you've got to do is a very quick adjustment. And the reason I say it's got to be a quick adjustment is that the buyer curve in real estate shows that most buyers will see a property between day zero and day 30. After day 30, it starts to trickle down and after day 45, there is little engagement on a property. So the longer it stays on the market, the less engagement there is. So one of the big problems real estate agents make is what they do is they'll aim for the heart buyer, they'll go for a hopeful figure, but then they don't adjust if they don't get that figure. And then what happens is they lose that 30-day period. And then what happens is they lose that 30-day period. The market looks at the property, says well, we don't see value in it. They leave. You adjust the price and reduce the figure at week five, but the market's gone. The market's gone, there is no point in actually doing it. Then If there was ever a time you want to look good in real estate, it's from day zero to day 30.

Tom Panos: 8:02

Those of you that want to become data-based real estate agents, I suggest that you. Yes, aaron, I am thinking about using, I am thinking about coming back and doing the Sunday night rant. By the way, the only reason I stopped the Sunday night rant is I was going through chemo and it was chemo was being done on a Friday and I was sick as a dog over the weekend, so I stopped doing it. But that's not happening now. Thank God for that. So, team real estate agents, if you want to stop winging it, because there's plenty of clowns out there that are just stand-up comics in real estate they just wing the whole thing. There's no data to it. Hey, I've got to tell you it's really, really simple Become a data-driven agent.

Tom Panos: 8:57

Go on to CoreLogic, rp Data and press markets on the app. It's third, from the bottom down the bottom. Then you type the suburb and it's got everything you want. And if you're not going to do it, I'm warning you. I'm warning you. I think it was Warren Buffett that said it when the tide goes out. That's when you work out who's been swimming with their swimmers on and who's been swimming naked. Think about that. Who's been faking it? Right? Well, they're being exposed because in this marketplace right now, it's really clear to me, in this marketplace right now it's really clear to me it is separating the men from the boys.

Tom Panos: 9:34

So if you're an agent that doesn't have a listing presentation that can win you the business because you've got a home maximization strategy, that you know how to actually do great marketing and you can actually engage a big audience, if you don't know how to be a great negotiator when you get that one buyer who wants a property, if you don't know how you can market not just for active buyers but also for passive, aspirational buyers, who are often the ones that will actually tip the price to the next level up. If you're a real estate agent that actually goes in overprices listings, keeps them overpriced for two, three months, you're not getting a listing, you're getting a liability, you're getting a turkey. And then you look like an absolute idiot because when you're talking to your owner you come back and you say, oh, yeah, no, we got to drop the price. Kitchen's too small, bedrooms are also too small. Busy road. Well, hello, hello, hello. You sort of knew that when you appraised the property, so don't go back to your owners telling them stuff you already knew of, right? The only information that you don't have at the time that you list the property is buyer intel. That's the information you need to be assessing and making sure that you're getting good opinions or value or offers of buyers so you can educate your vendor. So when the tide goes out, that's when you work out who's been swimming with the swimmers on and who's been swimming naked, and I can tell you there's a lot that have been swimming naked because they don't know how to list property and they don't know how to have a decent conversation with their owner to help them accept the reality of the marketplace, and they don't know how to actually be a dealmaker and work with a buyer. These are the people that are going to get devastated in 2025 in this market.

Tom Panos: 11:18

And I've got to tell you I have never in my time starting off a year. I'm 57 years of age. I'm 57 years of age. I have never, ever, been busier. I'm pretty much on a plane every day and my flights have been getting in at midnight. I reckon I would have done 50 conferences so far this year, and that included the fact that I was spending a fair bit of time in Byron Bay at the start of this year, bit of time in Byron Bay at the start of this year. So I'm just under the pump. But I've got to tell you. I've got to tell you, when you love the work you do, you're making passion your paycheck. Don't ever forget that and I think one of the reasons I've been so on so it's just so much new clients, new business from people that I've had no connection with. And I thought I was getting it all through social media ads. But we haven't been running ads for ages. It's all hey, lise, it's all been coming, believe it or not.

Tom Panos: 12:16

Chat GPT I've started asking all the people that just called me up chat GPT. I would never have thought it. So I went off and I tested it. I go on there and I say need real estate coaching? Who's the best real estate coach in Australia? Always come up. Best real estate auction in Australia Always come up. Biggest influencer Always come up. I'm not trying to pose off, I'm trying to let you know. Seo on chat GPT is massive and I'm telling you straight right now. I guarantee you, within months, a large proportion of people that are thinking of selling will be going to chat GPT because it's fast, it's easy and it's cheap, and they'll say want to sell to Newtown, who's the best agent. That's what's going to be happening. So you better double down on SEO because I'm telling you right here, right now, people will always pick the easy way to go off about making decisions.

Tom Panos: 13:18

Anyway, team, it has been a rollercoaster ride for me over the last month. I'm not going to go into the details, it was a health issue, but I had a wonderful meeting, a wonderful meeting this week with the number one cancer specialist in the country. It took me ages to meet with him. I have seen him before, a few years ago, but he just put me at ease and told me that, based on what he sees and based on all the new stuff that's out there, that I, in my head, should be factoring on living a life that is a long and a happy one. And on that point, ladies and gentlemen, shorts are going on. I'm going to enjoy the next two days because we're in new zealand next week. Is that right? Yes, I am. I'm everywhere. I was in perth, melbourne, brisbane, I'm in adelaide next week too, and new zealand anyway, signing off. God bless you all.