Current Market Insights
The Current Market Insights Podcast is brought to you by Harris Partners Real Estate.
Understanding the property market can be a challenging thing, with highs and lows, twists and turns. The media and agents tend to spread the news they want you to hear, with the advice they want you to follow.
Current Market Insights is an unbiased look into what is happening, what tips you can use to buy, sell, or rent, and that you wont find anywhere else.
Current Market Insights
Episode 80: Your Property’s Digital Footprint
Hosts Ciaran O'Brien and Peter O'Malley reveal how every listing, price change, and failed auction creates a permanent digital record that can impact your property's value. With property data companies storing this information indefinitely, sellers must be strategic about pricing, timing, and online exposure.
We discuss how failed auctions, underquoting risks, and even unrelated online content can affect buyer perceptions. Understanding your property’s digital footprint is key to protecting its value in an era where every detail is just a search away.
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
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Speaker 2:Welcome to the Current Market Insights podcast brought to you by Harris Partners Real Estate. Each episode we chat with real estate author and industry leader, peter O'Malley, to discuss the current property market conditions and provide insights to assist you on your property journey.
Speaker 3:Hello and welcome to another edition of Current Market Insights. I'm your host, kieran O'Brien, and with me is my good friend Mr Peter O'Malley.
Speaker 2:Peter, hello Hi.
Speaker 3:Kieran, great to be with you.
Speaker 3:Great to be with you again, peter. I want to talk today about a topic that I find quite interesting and one that I think is probably maybe a little bit misunderstood or not truly appreciated by people, and that is the digital footprint that your property has. Now, I think over the last, you know, maybe five to eight years, we've all become somewhat aware of digital footprints as we've become more connected as a society through social media and our phones and etc. Etc. And we're all aware of this concept of on the internet forever. But I don't think that many people would actually really appreciate that your property also has a digital footprint potentially and really, in that space, maybe don't understand some of the implications of what that is. So I thought we might spend today's episode just having a bit of a chat about what is the digital footprint as it relates to property and what are some factors of it, what are some implications of it and what are some things that people can do to either minimise or maximise their footprint based on what their objectives are.
Speaker 1:Thanks, Kieran. Look, it is a big topic, this one. In short, if someone Googles your address, what information do they find out?
Speaker 3:I guess that depends.
Speaker 1:That's the digital footprint though. Yeah, and that depends on how it's been marketed in the past, how often it's been marketed, whether you've got subscriptions to property data companies such as CoreLogic and PriceFinder, which is the that's the domain one, isn't it? Yes, yeah, so there's all these affiliations, and people are horrified when they realise how much data is out there for all real, out there for all time, that they didn't realize about their property and about what has happened with their property. So back in the day, vendors would purposefully overprice and put their property on the market and leave it there and think there were no ramifications to doing so. But along came the internet, and realestatecom and Domain specifically record the advertised address and advertised price of every property every week.
Speaker 3:Yeah.
Speaker 1:So a property that is sitting around not trading but just languishing on the market with multiple different pricing strategies is captured there for all time and it's erasable. We've had instances where people have said, because someone's damaged their property and they've brought it into us and they've said, can you go back to these database houses and clean up our digital footprint? And the answer is no, they don't do it because it was put out there on that date at that price for this long and that's public knowledge as far as everybody's concerned. So a languishing listing that's been on the market too long is one version of a digital footprint for a property. The other one is an underquote.
Speaker 1:So let's say, for example, there's lots of agents around Sydney at the moment, kieran, that are grooming or coaching their vendors in how to underquote compliantly. And you might say to the real estate agent look, mate, I just want $3 million for this place. How you get there is of no consequence to me. Who you have to run over the top of and trample in the process. That's just law of the jungle, fair game. $3 million is my number. And the agent says, well, look, I know it sounds counterintuitive, but to get to $3 million, what we should do is advertise at 2.4 and have an auction in three Saturdays time, for example.
Speaker 3:Yeah.
Speaker 1:So I made $2.4 to $3 million. There's a long way to cover there. Are you sure you can pull that off? It's like like, mate, leave it with me. Here's three examples where I did it in the last month.
Speaker 1:So you say, okay, mate, we'll go 2.4 million dollar auction guide for my three million dollar house. Good luck to you, good luck for me. In some instances it'll get close to three million and the property will transact. Some instances it'll go through three million dollars and it'll sell on the day and everyone's happy. But increasingly, in a market that we've experienced over the last two years, where prices have stopped rising and agents are desperate for listings, so they will tell vendors what they want to hear, not purposefully saying I value your property at three million, but they will say things like the best way to get three million is have a multitude of buyers at a lower price and I'll push them up from there. And then when it passes in at auction for $2.55, that's on the digital footprint for all time. Even though you've got a reserve on the day of $3 million, your chances of getting from $2.55 to $3 million are severely diminished, to say the least.
Speaker 3:Yeah, it's a really interesting concept and I think one of the things that our listeners may not be aware of is if you, at any independent point in time, search for a property, you'll see what is currently happening, right. So, for example, you'll see if it's advertised. You might see a guide price or you might see a whatever. You might see a sole price. It is a snapshot, effectively.
Speaker 3:But I think what a lot of our listeners don't realize necessarily is that if you as a consumer look at a property on, say, domain or realestatecomau, on the app in particular, every time something happens with that property also, you get notified. So if the price goes up, if the price goes down, if it doesn't sell, if it gets withdrawn, there is a footprint for you specifically as well that shows the entire history of that property. And you know we certainly, as agents in the past, use that trick all the time to track listings and get a sense of how they're moving and what the market's doing. The footprint, whilst it might look isolated in that snapshot of time that you're looking at it, it is there. All the data is out there to be collected and reviewed as you go through the process, and I don't think a lot of people would necessarily realize that look great, great example and there's much that goes on with data that the consumer is only aware of after the fact.
Speaker 1:So I went into sign a listing up in february and I did my research and saw that it had been on the market in 2022 and I didn't mention anything to the owners and we just listed it and we started marketing it. And right before we went on the market, they said do you think there's something that would stop this property from selling? And I said no. I think everything we've discussed about the features and the merits of the property align with what buyers are looking for. And when I remain confident of achieving a sale, why do you ask? And they said well, do you know that we tried to sell this in 2022? I said well, yes, I do know that that's part of part of my research. And she said that's our concern now is everybody knows we tried to sell it in 2022 and that's on our digital footprint that we can't get rid of.
Speaker 3:That's a really interesting point and it makes me think again, somewhat anecdotally, of my experience of some other agents that I've dealt with in my own purchasing journey, where I've asked questions about properties and said, oh you know, I saw this one was up for sale last year. What happened? You know that's a common question you might ask as a buyer and I feel like, in my experience anyway, agents always had an answer. You know there's always an answer it was someone died or something fell over, whatever it is. Do you think that agents have, on the whole, used tactics or set up a system where they can navigate these challenges to kind of counter bias? Because I feel like if you know you are facing that footprint, then are they finding a way to get around it?
Speaker 1:You can't quite get around the digital footprint. You can buy the agent's story or you can reject it as a home buyer. In that instance, that's all you can do. So the agent's job is to try and put a spin on everything. That's why they're being paid what they're being paid. Sometimes it's plausible and sometimes it's not. Buyers will always ask us as agents, why are they selling? And you know, sometimes the reason why someone is selling is harmless, and sometimes it's harmful to their best interests. So we've trained our agents to not really answer that question. Because if you're only answering the question when it's a positive reason or a harmless reason as to why they're selling, but refuse to answer it or dodge the question when it's harmful, well you've just outed yourself as there's something lurking beneath here, right?
Speaker 3:Yeah.
Speaker 1:So sometimes you can say too much without saying anything if a buyer sees you, sees you coming, and that's why an agent who's always thinking about their client's best interests is so important, rather than one that's just there to get the property sold each week or most weeks on this podcast we read out the auction clearance rate and we talk about those.
Speaker 1:You know, as it's been running for the last six months, 50% or so that sell under the hammer and the 50% that don't. Well, what we don't say every week and repeat every week is those 50% that don't sell each week have a damning digital footprint where a buyer is aware it went to auction on the 15th of March at 3pm and it passed into a vendor bid or it was withdrawn beforehand, or it passed in for 2.55 million and the owner can't get away from that ever again, because the mass data it's not done by humans, it's it's all, it's all scraped, it's all mechanical, it's it's done between domain and price finder and it used to be between realestatecom and core logic or the old rp data, and now realestatecom have their own data house they've built in the background that's taking on core logic head-to-head in the marketplace. So there's data sharing there between putting a listing up on realestatecom and thesecom and these real estate data companies that you'll never get away from.
Speaker 3:Yeah, I'm glad you bring up the point there. I guess what I'd really love to get from you and for our listeners is, objectively, what is the ultimate downside to that footprint? So if I'm a seller who's got this negative footprint, now buyers can see that it's passed in, etc. What are the? You know what are the likely implications for me if I am them trying to sell and approach new buyers in the market.
Speaker 1:Let's say there's a bad news flow. Let's use our example um, uh, where we have a reserve of three million, the agent talks us or coaches us into quoting 2.4 auction guide with the promise that I'll get you there on the day. She'll be right, mate. And then it passes in for 2.55. In some instances the reason it passes in for 2.55 is because it's only worth 2526, even though you want, or the vendor wants, three million.
Speaker 1:In other cases there might be bad news flow, like you know what we've been dealing with recently. You know what's coming out of the white house and shaking up market confidences, etc. Where the day you go to auction is just not the right day to be going to auction and your property has a fundamental value of $2.8 to $3 million but it passes in on the day for $2.55. And that's going to haunt you forevermore because buyers are going to say this property had its day in court, it went to public and open auction and it passed in for $2.55. So how can you now conceivably tell me that fair market value is $2.8?
Speaker 3:Great example, pete, that's exactly where I was heading with that. I really wanted to just spell out for our listeners that the most damaging aspect really is that the price it passed in for is public and if you, you know whether it's pie in the sky, optimism, whatever it is, if your asking price is above that, it's going to be a real uphill challenge to get to that point once it does become public knowledge. I want to pivot a little bit. We've talked about digital footprint as it relates to your property and you know previous sales attempts, listings, rentals, whatever it might be, and how, particularly if you pay for a report from one of these data houses. You know your price finder or your CoreLogic. Historically, you can get access to a huge amount of information about that property and you know, as you know all too well, it lists everything.
Speaker 3:You know all the stuff we've talked about and some of it's correct, and some of it's not and some of it's not, but these are reports that the general public can buy. What I wanted to kind of pivot to is talk about some of the other elements of a digital footprint that may not be thought of in this space, and the one I'm really thinking of is a sold price. A lot of clients, you know, reasonably request that sold prices are withheld, and it's knowledge that they're withheld on the day, but they are ultimately public knowledge. What, uh, you know what, what are the, the kind of circumstances around that? The price with hell, you know, withholds, and at what point can they be accessed through these reporting houses?
Speaker 1:anyway, once the property settles, it's it's public information, kieran. So, yeah, we get vendors and buyers all the time at the point of exchange saying, um, if you don't mind, we prefer the price is not out there on the internet and it's like yeah, absolutely fine. What we do have to say to them, though, is you need to know that on the day of settlement thereafter, it's public information, and if one of the websites picks that information up off the lands title office and duplicates that on realestatecom or domain, we have no control over that, and you'll notice that the price does reappear. Most people say I'll have moved out by then and moved on, and I don't really mind. But just at the point of exchange, while everyone's got their eyes on the sale, I prefer to keep it confidential for the time being.
Speaker 3:Yeah, look, that's my understanding too, and certainly my experience using, in particular, realestatecom's pricing platform or historical pricing platform. They notoriously grab that data as soon as it becomes available, and I know because Data's a big business. Oh well, it's the true value of realestatecom, right, it's the data they hold. All of them really, I mean any of these major websites. They're not. Functionality is.
Speaker 1:The functionality is designed to simply grab more data.
Speaker 3:Yeah, and I think too, a lot of our listeners may be very surprised to learn some of the data that is on these reports. I mean, it's not uncommon to grab a property report for a place that you have looked at and there is so much more info on there than just property data as well.
Speaker 1:Well, there is. I was going to go to photos, for example. So every photo from every campaign that a property's had in the in the digital era is is likely to be sitting on real estatecom servers and can be called up when you want to look at it. Uh, so that's one there. Um, people, um can misread or make mistakes with data.
Speaker 1:I remember, um, a cottage down in Birchgrove that we were selling two years ago and a really high-profile Australian came in and said how can you be asking this price for this property when it just sold for half that essentially half, I think. We were looking for over four. And he came in and, you know, berated me because this sold, this sold three years ago for two million. And it's like, yeah, it sold three years ago for two million. Then the owners did a massive renovation on it. Um, and and, uh, and, and that's why it's worth this price. And he's going going no, no, you've got it wrong. I've checked it out and the digital footprint was wrong. But I had this high-profile sportsman getting stuck into me saying that I'd got it wrong and I was telling fibs just to make a sale. It's like I can't help it. If you've gone to a service provider that's given you a bum steer.
Speaker 1:So there's all sorts of trickery that goes on with with the digital footprint and misreads, and you do need to know that it's not a human.
Speaker 1:That is, you know, carefully cross-referencing everything. It's just mass data cross-sharing, realestatecom with their data house, domain, with price Finder, and it can often be clunky data. It can say that it's got no car space, for example, when it's got double lockup garage, and we often show people these research reports on their own property and they get really, you know, really frustrated when the data is incorrect, like we've given them incorrect data about their house and it's like this is just all computer generated. This is just a whole world until itself. Another subtle one, kieran, is that let's say you have a studio at the back of your house that you lease out and you put it on domain and realestatecom to lease out your self-contained studio. You might have a five bedroom house with a studio out the back, but the moment that one bedroom studio, self-contained studio goes on domain, your address will then be registered on realestatecom and domain as being a one bedroom studio, even though it's a five bedroom house on the land size.
Speaker 3:So data data capture doesn't think is my point yeah, and it certainly uh, certainly can have a negative impact on your campaign. If you are looking to sell and or lease, you know a one-bedroom apartment or a studio in Balmain is certainly worth a lot less than a five-bedroom house in Balmain, for example. On that note, I reflect on my own experience using, you know, CoreLogic in the past and PriceFinder, et cetera. You know through our work, and one of the things that always struck me as interesting with CoreLogic is they have a mechanism on the back end of their website. You know, the access point to correct errors, and it always made me wonder whether or not there is an avenue for vendors to make corrections or submit correction requests to these data houses should there be an error identified. So, for example, if you know someone has done a full renovation and that two-bedroom no-parking cottage has suddenly become a four-bedroom, two-parking cottage, can they request through these data houses, some mechanism to alter the footprint to better reflect the current setup?
Speaker 1:I think realestatecom and Domain probably would. I don't see it around as much at the moment, but I don't know if you remember a website called On the House. Yeah, certainly at the moment, but I don't know if you remember a website called on the house. Yeah, certainly they they were. They were chasing the data space in a big way and there were a couple of times where they had automated valuation models and they were capturing data and obviously if you capture the wrong data, you're going to give the wrong automated valuation.
Speaker 1:And I contacted them about one of our listings. They just had horribly wrong, very nice about it, and just said look, the data input that you're using here is completely wrong and therefore the output that you are providing to the general public is well off. And I've got buyers, for whatever reason, on this property at this time. I've got buyers that keep referencing this. So would you mind cleaning your data up? And they went to war protecting the integrity of their data and refused to change anything it's like. Well, I give up. If you're a data company and it's clearly shown to you that you're using incorrect data and you go to war protecting it, well, what hope are you?
Speaker 3:no, exactly, and you know, I wonder, as we kind of move towards a wrap on this subject. I wonder for circumstances where someone like a lender or a bank might use a you know what we call a curbside valuation, using some of these reports and data sources to kind of reference the value of a property. Do you think there's any potential or likely impact if there is, like an egregious data error on some of these valuations and therefore potentially the lending capacity and or valuation of these properties?
Speaker 1:Look, I don't know too many people that are making big decisions on automated valuations at a corporate level. I know there's consumers that are doing it and they cast an eye to it for some sort of Validation Validation, there's the word I was going to say, confirmation, but validation will work and that's understandable. But I think we do need to be very, very wary around this space, around the data capture and what it tells us. It can help. But at the end of the day, I think buying and selling real estate is a serious business as a consumer and you really should sit down and form your own decision and identify the bugs that might be in the clunky data.
Speaker 3:Great discussion today, pete, as I guess a final message to our listeners, then is there anything practical that people can do just to kind of maximise or improve their footprint potentially before going to market, because obviously that's going to be the the time before things happen where you can really protect it. But is there any proactive steps that people can take just to make sure they're giving themselves?
Speaker 1:you need to know when your address goes online for any reason, it will be captured against the property's digital footprint for all time. So if your teenage son throws the wildest of house parties while you go away for the weekend and you end up in the news, that'll turn up on the property's digital footprint at some stage. Yeah, there's been many examples where crimes have been committed in homes and if you Google the address it pops up. So the internet in that regard does not think around the data capture. It's just whatever is happening at that address is captured there for all time. I'm giving some non-real estate related examples that we have seen in our time in real estate how it comes through DA applications.
Speaker 1:Kieran, getting a little bit closer to the core topic, if you put a multitude of development applications in on your property and they're ambitious, they're getting captured.
Speaker 1:Now, for someone who wants to put a dormer window on the second story of their house, that's probably not such a big point. But for someone who thinks they're on a development site and is trying to get multiple dwellings up, you don't want a multitude of different DAs being submitted and declined because that's going to hamper your ability in the future to sell that development site. So this is a really big discussion which we're only skimming the surface of today. Just to give people an idea, they need to think about their digital footprint before they start making moves, and I think the most common one is the vendor that lists and languish, which happens in soft real estate markets, and the other one who is coached into underquoting by the real estate agent on the promise that I can get the price back up, and then when they get to auction day, it all goes wrong and the auction starts low, stays low and stops low, cruelling the chances of the vendor of ever getting that high price or that premium price they dreamed about.
Speaker 3:Yeah, really great discussion, Pete. It's, yeah, incredibly important to protect yourself and your asset for when things do go wrong. That's for sure. As always, really great chat. Thanks for coming in and having a go with us today. Yeah, good on you. Thanks, Kieran, and thanks to everyone for listening to Current Market Insights. We look forward to speaking with you next time.
Speaker 2:Thanks for joining us on the Current Market Insights podcast brought to you by Harris Partners Real Estate, the podcast providing real estate insights you won't find anywhere else.
