7 figure Attraction Agent
Tom Panos interviews leading real estate attraction agents. These agents share their strategies for writing 7 figures year after year. Simple, powerful and effective - you can apply these tips to grow your real estate business today. For more FREE tools visit: www.tompanos.com.au
7 figure Attraction Agent
Why Australians Pay the LOWEST Agent Commission Fees Globally 🗞️ Real Estate Market Wrap
00:05 – The 2 types of agents destroying vendor management: 😈“Larry The Liar” and 🧔 “People Pleasing Pete”
04:31 – Why Australians are paying the lowest agent commission fees globally
07:50 – Where are the highest and lowest commissions in Australia?
11:04 – Is Cold Calling Dying? 🤖 And other ways the industry is being disrupted by AI
14:26 – Etiquette for attending other agents’ open homes
My Clearance Rate: 7/10 SOLD
If there was a state of origin competition on real estate commissions, melbourne would come last. It doesn't make sense. One of the things I want to touch on today is the two real estate agents. I don't like the two real estate type of people. I dislike One's good and one's bad, but I don't like either, because both of them lack capability and both of them cause problems to the real estate market and both of them cause suffering to vendors. Let me run through the two agents.
Speaker 1:The first one is the liar. The liar is the one that blatantly tells an owner their house is worth more than what it is. This person causes a lot of damage. This person distorts the view of what the owner's plans are going to be like in the future because they're thinking that they're going to get an extra two, three hundred thousand. This person is bad. Right, this person's bad. Not only is this person bad because they destroy an owner's original campaign and you never get a second chance at making good first impression. But I've got to tell you Larry the liar, as they call him, has the worst, worst reputation in the marketplace and I've got to tell you every area has got a Larry the liar.
Speaker 1:The second agent that I don't like is the people pleaser. He's not Larry the liar, right, let's call it Nice Nick. I don't even know how I came up with that acronym, nice Nick. Nick wants everyone to be happy, everyone to be happy. The owner says you know, we know what our home's worth, we know it's worth $3 million. And you know what Nice Nick says yeah, it is, it's beautiful. You want to know why? Because Nice Nick is a people pleaser and I want to let you know. The consequences of a people pleaser is not too different to that of Larry the Liar, and the reason why is that both agents leave a vendor to believe. Listen, I'm not going to comment on that person, right, but I've got to say to you there are plenty of people pleasers and there are plenty of Larry the Liars. Now, a people pleaser, let's call him, yeah, camera. Let's call him People Pleasing Pete, beautiful. Let's call him People Pleasing Pete. So what actually happens is People Pleasing Pete tells an owner yeah, I think you can get your price. Yeah, and then after the first couple of weeks, they're getting feedback coming in, they're getting the market talking People pleaser Pete. He doesn't go and tell his owner hey, this is what the feedback is they don't like that. They don't like what you've done here. They don't like the fact that they're going to have to put in a new kitchen and bathroom, right, because the pleaser wants everyone to be happy. There's only one issue Keep them happy during the marketing campaign and I've got to tell you you devastate them when the property gets sold or on auction day, because what's actually happened is you people pleasing has meant that they believed it was all going to come good.
Speaker 1:The best real estate agents I know have got the ability to tell people the truth, whether the owners want to hear it or not. The best real estate people I know are able to deliver bad news in a positive way. The best people I know in real estate make data-driven decisions. They will look at the intel that's coming through on comparable sales during the marketing. They will also be looking at the buyer inquiry that is happening physically. Then they will back that up with stuff from Ignite, which gives them the data set. They'll even go into chat, gpt and have that data analyzed. That's what the good ones are doing and I've got to tell you if you're a people pleaser or if you're Larry the liar, I've got to tell you, you've got to shape up. If you're Larry the lawyer, get out. If you're Pete, the people, pleaser go off and do a course on learning how to communicate.
Speaker 1:Next, I've got to tell you real estate commissions.
Speaker 1:I want to touch on that subject for a moment. Let me give you an interesting fact. Australia and the UK are two of the leading countries in the world that have got the lowest real estate commissions. That's right. Australia and the United Kingdom lead the way in the lowest commissions, and I have to say to you there's a reason why that actually happens. Right, if you go to certain places in the world, we're talking about 6%, we're talking about 7%. Right, 6%, 7% commissions.
Speaker 1:I've got to say to you it's really simple. Here is why the commissions in Australia are probably one of the lowest in the entire world. Number one it has a strong auction culture. What that means is that days on market are condensed into being shorter periods of time. Hence, if you're working less time, you get paid less money. The second reason is that Australia has a very unique principle with marketing, and it's called vendor paid advertising, and what that means is that the vendor is actually carrying the cost of the advertising, whereas if you go into other countries, ie the USA, you will find that the real estate agents absorb the advertising and marketing costs and what they do is in turn, sort of integrate it into their selling fee.
Speaker 1:Let me give you another reason why Australians are paying the lowest fees in the world, and that is our prices overall are very high, particularly in Sydney. So if you look at our percentage say 1.5% on a $3 million property, that's quite different to actually say 3% in another country of a $500,000 property. So the cost of real estate affects the commission you're going to get if you're using a percentage fee. The next reason why real estate commissions are lower in Australia than anywhere else is that in many countries the buyer's agent is also paid for by the vendor. That's right. There is two sides there's the buyer's agent's commission and there's the listing agent's commission, right? So all of a sudden you turn around and you start saying to yourself oh, there's valid reasons why. Look, in some countries it can take a year to sell a property. That's why the fees are higher.
Speaker 1:But I want to go dig deep, lower, and what I've done is a bit of an analysis of real estate commissions in Australia and let me run through some interesting data. The highest commissions as a percentage in Australia are in Queensland. The lowest commissions in Australia as a percentage are in Victoria and specifically Melbourne. In Melbourne it is quite normal to see real estate agents charging fees of 1% to 1.5% and then Sydney's only just ahead of Melbourne in real estate commissions. But I've got to tell you the big difference is that Sydney prices are significantly higher than Melbourne prices. So even if you've got you know, so even if you've got you know, 1% in Melbourne is a lot more lucrative than 1%. Sorry, 1% in Sydney is a lot more lucrative than 1% in Melbourne. But I've got to say to you, I've got to say to you that as far as I'm concerned, when you look at Perth, adelaide, the rest of the places around Australia and Perth and Adelaide have probably got higher fees and they're probably more like 1.5% to 2.5%. That's Perth, south Australia. In Queensland. I can tell you there are real estate commissions up to 3%. I actually know people even more.
Speaker 1:But if there was a state of origin competition on real estate commissions, melbourne would come last. It doesn't make sense. How is it possible that you've got Sydney as the highest median price, then you've got Brisbane, then you've got Perth, then you've got Adelaide and then on top of that, you've got the lowest commissions in Melbourne. So I'm trying to work out how did we end up here like that in Melbourne? How did we end up here and I can only make the assumption that it is a very much industry-led result, that what's happened is that real estate agents have actually cut, cut, cut and it's been a race to the bottom. Look, there's so many things that need to get sorted. I've been spending a lot of time in Melbourne and I can't understand how Melbourne that's got so many of the big corporates, how Melbourne has got so many great institutions, education facilities, how Melbourne has got incredible migration. Such a diverse city is now not only under Sydney, under Brisbane, under Perth, under Adelaide. Man, between those taxes and between the exodus that happened during COVID from Victoria to Queensland, I think that that's been the biggest driver of the fact that median gone down. But I think real estate agents have pretty much just gone in and not defending their fee and showing value, so it doesn't make sense. However, I've said it and I'll say it again Melbourne is underpriced. Melbourne is good value.
Speaker 1:Let me move on, and I want to let you know that there's major changes happening as we speak, apart from the AI impact to real estate agents, and that is that buyers and sellers are going to chat GPT. Yes, you're right, richie, taxes on top of taxes, hey Aaron. So yes, I've got to say to you, we've got chat GPT that is driving buyers and giving them transparency and working out what a property is worth, and that's outstanding considering all the fuss we've had with auctions and price guides. Yes, we have vendors that are going and selecting which agents that they're going to call to an appraisal using AI. Yes, we have so many things.
Speaker 1:But in addition to that, there's another thing happening in the background and that is Sales calls. It's changing. Every update we have with iOS and Android is bringing in cleaner features to stop people getting sales calls and having canvassing done. There is screen calling happening now and that, to me, is basically saying the old model of just doing cold calls to get appointments is dying. I'm telling you, do I think that phone calls and database is over? No, I think that a fat database with a very low connection with the agent, that they're not across their database. They haven't gone deep. If you've just gone very broad but not deep you're going to suffer. I suppose what I'm saying is we're about to see something really interesting happen in real estate. Hello, peter, from Glyfada, I'm letting you know I will be back in Greece at your office in October and I am letting you know I'm heading to London for more conferences in October. I'm heading to Bulgaria for a major conference. I think there's thousands that are going to be there and I'm really looking forward to that. But I'm telling you now FAT is out, fit database is in. Have not meant cold data is out, have meant warm data is in. Get close to your database, because we're about to see the weak disappear in real estate. We are changing.
Speaker 1:Ladies and gentlemen. Tommy, are you going to the Sydney FC Australian match versus Auckland? David, can you tell me what time it is and where it is? Malcolm Quinn, if the Tigers win every game, they can sneak into the eight. I'm telling you. I'm telling you now. There's no artificial light right there. I've got to say to you, mel, tomorrow all roads lead to Leichhardt Oval. I'm leaving my home at 2 o'clock, I'm putting on the V-neck jersey with the Philips and I'm heading straight to Leichhardt. I'm going to go there and I'm going to come back with two points and a win. I know that, ladies and gentlemen, that's what's happening.
Speaker 1:Last thing I want to touch on. Last thing I want to touch on I had a real estate agent walk in today just trying to find out what's going on in the market competitive offers and I shot a video on it. It happens one, two, three times, two times last week. It happens all the time. Real estate agents walk in and they look at an auction right and what actually happens is they go back to the office and they tell their agent oh, that house in Excelsior Street sold for two and a half right, product knowledge. I get that, even though, having said that, you can get the data on realestatecom and online by Monday. You can get the data. So there's really not necessarily that much need, but I get it. You want to go see what's going on. I want to see who's bidding. Get your product knowledge. Listen if. Thank you, david.
Speaker 1:7.30 pm, jubilee Stadium I'll be there. I'll be there. I'll be going to the game. I've got an option at 6.30 and I'm going to leave the option and I'm going to go straight to the game and I'm going to watch Sydney FC. But I've got to say to you if you are an agent that goes to other agents' options to get information, that's fine, be respectful, walk in. Hi, I work for the office up the road. Do you mind if I have a quick skip in? Quick, look, great, fantastic. Do you mind if I just watch and see how it goes? Do that? Stay away, no need to talk to anyone, like some agents do. Oh, they grab the attention of a buyer. They start talking to them. That owner has paid big money to have their auction. They don't need another agent who's not a listing agent, who hasn't signed a contract to represent that vendor. They don't need that person to be there. And, quite frankly, I actually get really concerned when I see an agent at an auction at another property that shouldn't be there, because I think that sometimes they actually might be talking the buyer out from bidding on that property to try and sell them something else. That's bad form, it stinks.
Speaker 1:Last couple of things 23rd and 24th, ladies and gentlemen, invite only for my real estate gym plus members and my accountability group. I'm letting you know we're going to Byron Bay, you're coming to my hometown to spend two days to actually learn how your brain works, to learn how effective business unit teams work. We're going to do everything on AI, but I'm letting you know this ain't a Netflix show. This is going to be actual experiential learning Small group. You can't hide. I'm letting you know my real estate A-plus members are coming in, obviously free of charge, so look out for it. And I'm so pumped about Byron Bay some amazing speakers. We've got Rubenstein McGrath, lahood team, big names, names more speakers to come. Good to see you everybody. And, on that note, it's time to head off.