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Veronica: [00:00:00] In this episode, we dig into a part of the property market that's been operating in the shadows for far too long. The opaque world of sale campaign tactics and the information asymmetry that keeps buyers guessing. We'll be talking with Henry Peterson, co-founder and CEO of Homer, a platform aimed. To surface the data that's usually kept from buyers. We'll explore three core tensions, what buyers can really learn from full unedited sales campaign histories where the patterns in selling agent behavior genuinely illuminate the truth or risk being misinterpreted with our industry context. And the bigger question of how far. Aggregated big data can go in accurately assessing individual properties, which are by nature, hyper-specific, and influenced by nuances.

Veronica: Algorithms can easily miss this conversation, would challenge assumptions on all sides, including whether more data automatically means better decisions.

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Veronica: [00:01:00] Our guest today is Henry Peterson, co-founder and CEO of Homer. A platform aimed to surface the data that's usually kept from buyers coming from a data and growth background rather than real estate. Henry brings an external lens useful for interrogating fresh ideas, but also worth pressure testing against how the property market actually behaves on the ground. We are very happy to be chatting with you today, Henry. Thank you so much for joining us.

CB: Hi Henry. Thanks for coming on. I found an article just on the weekend that you were quoted around price guides and Underquoting is such a [00:02:00] topical,~ um,~ issue, for years and years. But,~ um,~ what got you to start, Homer in the first place and,~ um,~ how's it going, I guess.

Henry: Yeah, I was lucky enough to join, with the original founders ~of, ~of Homer early this year, and guess it's always a bit of a personal story of how you ~kind of~ come into these things. So. trying to buy a house in 2021. Probably the wrong time.

Veronica: The worst time to buy anywhere in Australia, actually.~ ~

Henry: ~uh, uh, we um, a, ~so there's a little bit of a personal, Story then, and then one thing led to another. I bought a house clearly, so it wasn't exactly the best time to,~ uh,~ go and start something. So I went and joined a automotive,~ uh,~ vehicle aggregator. So they go and. Pull all the data on basically every vehicle that's for sale across the country. ~Uh, ~help them scale obviously domestically, and then into four,~ uh,~ other markets. Most recently, the UK came back with a young family

Henry: needing

Henry: to stay put,~ uh,~ a little bit in Australia. So, joined the team at Homer and kind of taken them on the next phase.

Veronica: okay,

Veronica: so Home is a,~ a, ~platform that is designed to give buyers more visibility. ~Uh, for, ~for example, you've got

Veronica: campaign

Veronica: history data. So I know in [00:03:00] some of the subscriptions that I pay for, I can see the history of how many times the property's been advertised for sale.

Veronica: So you see fail campaigns, you see that, you know, price guides if there were published, you get access to all of that. But as a typical buyer, if you're looking, say, on the,~ on the, ~portals, the green one or the red one, you know, domain or real sector.com au. You will see the last time it's sold, but you're not getting access to, well, had they tried to sell it a few times over the last few years, or how was it on the market for three months before it sold last time? I guess what led you to include that and why do you think that's valuable for buyers ~ ~and and I guess what proportion of properties would have some intel in that?

Veronica: Regard that,~ um,~ is being hidden.

Henry: well, I'd just, every property

Henry: currently has

Henry: hidden data, so if you, for example,

Henry: change your brief or you,~ you, ~get a brief Veronica for a new customer and you've not been searching for that particular type of property, If you are everyday person, you would just go on the platform and see, okay, there's 32 properties that match the search. You won't know, for example, that five of them have had [00:04:00] failed auction campaigns you won't know that a bunch of them have been listed for over 60 days. 70 days, 80 days. You've got no insight. You're kind of just that wood duck they used to refer to in~ in ~sales that have just come and come in unwittingly.

Henry: So I think that's one of the key differences that we're

Henry: trying to just always

Veronica: buyer coming

Veronica: in, so, so someone who's not sort of, you know, tried and true and been pounding the pavement in their market for three months or six months ~or, ~or whatever. So this is for someone coming fresh off the boat, so to speak.

Henry: fresh off the boat, but.

Henry: when

Henry: I was buying,~ uh,~ a house with my wife, like we got the spreadsheet going of all the campaigns. 'cause like otherwise,~ ~ you know, property experts to one side, like you can't keep track, but you're trying to memorize data points based on photos that you looked at or you're doing what we did with a scroll down, a kind of spreadsheet property were interested in to keep that kind of campaign history for ourselves. ~Um, ~and that's obviously just not like. That's scalable. So ~we, ~we ended up, starting a spreadsheet of

Henry: 12

Henry: odd columns worth of data, and then by the end of it, like it would just be a URL kind of in each row, and our feedback to [00:05:00] each other on the property, I'm being honest, mostly born out of frustration from my wife about me just texting her the same property she'd already sent me and all the rest of it.

Henry: ~ um,~ but yeah, so no,~ we're,~ we're just trying to do our best obviously, to surface. That current campaign history of a property. ~Um, ~so no one kind of is hoodwinked based on lack of experience with that current campaign. Then to your point, giving the historic data on previous campaign history, be it rentals or obviously for sale.

Henry: So it's obviously, you know, if someone's telling you that the rent appraisal on a property is $700 a month, but it took them. 40 days to rent it at $600 last year. there's a good chance ~that, that ~that price is not that substantiated. So those are the types of things that ~we, ~we like to surface to buyers to.

CB: So do you find that ~the ~the best test case, 'cause that's not new, right? You've been going for a few years. I mean, do you find that the best sort of test case is really that listing sort of data, you know, which you can definitely get through other ways and it's really hard to find the price guide on properties as well.

CB: ~And, ~and do you find that that~ that ~just gives buyers ~a, ~a. Leg up because, obviously they've chased the wrong rabbits. they rock up at open homes. and it was never [00:06:00] priced at the right point. Or ~they, they, ~they think this market property's really hot and it's actually been on the market for a long time.

CB: are they the main test case she's trying to solve ~um.~

Henry: ~Uh, ~so one of my mentors once referred to it as like, spearing the Dead.

Henry: So

Henry: we published some data in the Sitting Morning Herald, which is looking back at last year worth of, you know, guide prices or sale prices and you can

Henry: look at it and go, okay, well this agent, had a median under quote rate for that. Transaction ~that, ~that we observed at 18%. Right. And then,~ uh,~ Veronica,

Henry: I've

Henry: heard some of your,~ um,~ podcasts and videos on under quoting clearly, and you referenced the fact that they've a range. They might only advertise the bottom of the range, or is it 18% or is it, you know, 8% if you take the top or whatever it is.

Henry: But like, ultimately we are currently building a, product which will service,~ um,~ buyers to give them that. Okay, well they're saying one, Looking at the last 50 transactions that they've sold, we've got data on

Henry: it was 18%, 17%, 5%. so there are obviously some accurate agents out there.

Henry: and

Henry: that's what some of the data that we previously shared with the A, b, C articulated was, you know, some states like Tasmania for [00:07:00] example, where 10% of agents down there are within 3% of guide. For their price. So it's not horses for courses clearly kind of market. There's different areas that are more prolific than others.

Henry: ~Um,~

Henry: but we are building a product yes, that will, help guide,~ um,~ buyers to the historic performance of agents. ~Um.~

CB: ~ um, is, ~is there issues here that the portals, are they friends with you, the agents, friends with you? Like, you know, sometimes you're high, you're showing information that, they're not wanting to sort of openly share. I guess ~ ~the, portals have got a bit of a dominating factor, right?

CB: The two big ones.~ How, ~and you sort of getting along.~ ~

Henry: ~Uh,~

Henry: we don't compete with,~ uh,~ portals or agents. Like we're not a listing platform.

Henry: We're not trying

Henry: to step into that place at all. We don't have the property license, so we,~ we, ~would never even go near that kind of thing. ~Uh, ~in terms of like. Whose friend or not friend are we we're,~ we we're, ~purely focused on accessing,

Henry: ~uh,~ data

Henry: and making it available to the public, be it the seller, the vendor, obviously the real estate agent or ~the buyer, ~the buyer's agent broker.

Henry: Obviously, if you're interested in taking a look, but ultimately We're not really in a game of deciding what [00:08:00] data to show and not show. And I think that's unfortunately the position that platforms,~ uh,~ like the marketplaces you mentioned,~ uh,~ they're in a structure where they're obviously vendor paid marketing via an agents.

Henry: so what they're gonna disclose on the campaign is always gonna,~ uh,~ be limited to reduce that exposure, for the vendors some of those data points that they may or may not be willing to share.

Veronica: It's interesting

Veronica: around the quoting 'cause in 2021, coincidentally I started tracking, guide price versus solar price for all the agents in our area thinking that I was gonna be able to see these patterns. instead,

Veronica: what I realized is how unreliable that is. If you're trying to get a single number out of any of it, if you sort of did a,~ a, ~traffic light system, for example, you know, in bands you go, well, this agent is a, serial under quota.

Veronica: This one's a,~ a, a~ serial. Some of 'em even are over quotas. and this one is, Consistently within the band for argument's sake, that will be much more useful. So a bit of free product advice, I guess, here. because ~what I, ~what I was observing,

Veronica: even

Veronica: though we know because we are local [00:09:00] specialists in our area, we know the agents, we know the ones that are more prone to one, to quoting versus over quoting versus accurately quoting. ~Um, ~but the numbers didn't bear that out. And the reason the numbers didn't bear that out. So ~they, ~they bear out an indicator, but you couldn't rely on a number for two reasons why this is an issue. One is because they're huge variance in terms of the actual quality of the property. Some are just gonna be more competitive than others, and so therefore that will just blow out that range, that number. But secondly, the danger is if you put a number on there, is that buyers will just use the number, they'll use that median number and They'll multiply the guide. by that index. And that is just as bad as if they just add 10% or 20%, you know what I mean? It's just as unreliable. So ~that, ~that's a danger, I guess, for buyers. ~Um, ~but I think if you had a traffic light system, it'd be much more useful. also the Office of Fair Trading might be interested in, in that too, because

Veronica: ~ in,~ in New South Wales in particular, and Victoria also consumer affairs, both had press releases in the last. Two weeks in terms of new initiatives to crack down on another quoting. So our regulators are certainly interested in this.

Veronica: Have

Veronica: you checked out the [00:10:00] auction ~ um,~ app, which has, that didn't survive? I dunno if there's another iteration of that coming through, but have you looked at that as a comparison?~ ~

Henry: ~Uh, Uh, ~so the first one is on the travel light system. Completely agree. ~ ~we will be providing both, but ultimately we need to service the actual data. We can't just.

Henry: An agent with bad, you know, price guy and accuracy, red or ~uh, ~green for good. ~We ~we'll need evidence that statistic that represents that. ~um, ~although,~ um,~ you are correct that some, people will take whatever percentage or number that you give them and just add that on,~ um,~ there's also like From my perspective at least, to be open and transparent about what is making someone good, fair or bad, right? ~Um, ~so yes,~ we'll,~ we'll be surfacing like a percentage regardless,~ uh,~ with a kind of indicator. And then underneath that will be all of the properties that have made that value up, right? So we will give the consumer,

Henry: anyone who access the portal clearly the ability to look.

Henry: This was their most similar property to mine.

Henry: Similar. What was the difference on that,~ ~

Henry: specific property. and as well, we'll be [00:11:00] providing,~ um,~ buyers and ~any, ~any platform user the ability to give us feedback property, for example, to say, actually

Henry: guide price, I think was this. And then we'll obviously go to review process of that, which we're setting up at the moment.

Veronica: The problem also, just to throw another spanner in the works, is that the guide often gets revised throughout a campaign. We have a provision there ~to, to ~to track it,

Veronica: ~you~

Veronica: ~know, ~you know, have a timeline.~ ~

Henry: ~Uh, ~so we have a first and last ~is, ~is what we're working with. ~Um, ~you are obviously more aware than me. Some agents never change ~their, ~their guide price through a campaign. ~Um, ~some of them are very active, so we, do give a first and last. ~Um, ~I'm thinking about surfacing something like a timeline of, you know, say the sole price is 100%. Build up to get there. And if there are those changes on average, but I think that as well would be fairly overwhelming. ~Um, ~so yeah, we're trying to strike that balance of providing indicators,~ the,~ the statistics behind it and the properties beneath that to make sure that we're trying to be as,~ um,~ fair as we can. ~Um, ~I think your second point, from my memory was,~ uh,~ fair [00:12:00] trading and, ~um. I'm, ~I'm blanking on the name of Victoria down here, but have we Consumer Affairs? I think Consumer Affairs clearly are,~ um,~ fairly active at the moment with what they're proposed regarding the reserve prices, et cetera, my assumption is they wouldn't be pursuing a program like us whilst that change is underway. ~Um, ~but we'll see. And yes, I've, reached out to them. ~Um. ~So we'll see what happens there.

CB: I've just,~ uh,~ on a personal level, I've been using this. and it's so easy. I mean, this is not a sales pitch by the way. We never get paid anyone to come on this podcast, ever. but~ um,~ it's extremely easy to download ~and, ~and it's just so in the listings, which it was always a pain in the ass to go on a listing, you type it into RP data, then you'd have to go and look at all the data, you know what I mean?

CB: And it's just so easy to use on a portal. ~Um. And, ~and how has the uptake been on this? Because, you know, it's obviously the free version's obviously really easy to sort of install. Like ~where, ~where are the people most getting the value out of your tool and where you're actually starting to charge people?

Henry: So we're at 40,000 installs since inception.

Henry: so we [00:13:00] kind of skipped through that little part at the start. So we were originally founded by,~ uh,~ one of the heads of engineering at Canberra who built us as like a passion project under

Henry: Ben name Koala data. ~Um, ~so right now,~ uh,~ across the country we've got about 16,000 odd,~ uh,~ weekly active users.

Henry: ~Kind of~ change week on week, but we've got a lot of. users out there that have found us through forums, Reddit, wherever it's, it's come to their attention. ~Uh, ~we've started commercializing the product,~ uh,~ only recently in the last couple of months, really. so we're moving into a,~ a, ~paid environment, which will be accessing, you know, premium dataset, so stuff, things. ~Um, ~but that's, yeah, that's a little while off.

CB: And is it gonna go backwards in terms of, you know, I'm looking at old sold listings, et cetera. I'm not sure how good this data is, but are you going to. Be able to get all the data on old listings and all the old pro guides and you know, so whenever any property anyone wants to look at that's sold now or in the, past can see experience the seller went through.~ ~

Henry: ~Um, ~so yes, we will have, price guides for that, kind of length of time. but yeah, it just depends on the coverage. Like we were hobbyist business for a period there, so that we don't have [00:14:00] the full

Henry: history

Henry: that I like to have, but ~we, ~we do have the vast majority of the last five years.

Veronica: So

Veronica: one of your features in there is a pricing tool. ~ ~now

Veronica: there's lots of pricing tools out there and most of them are shockingly off. are pitching it as, look, you need this, 'cause this is gonna help you actually, you know, make an offer with more confidence. How does it work?

Veronica: Because I've spoken to people who have designed AVMs, there's

Veronica: real problems with trying to get accuracy, these automated pricing tools. What's your secret sauce in this one?

Henry: we haven't actually made that probably. Bit available yet. ~Um, ~but ~we are, ~we are, working on it. ~The, ~the biggest difference, we,~ we, ~won't be pricing properties that aren't actually listed. So it won't be off market,~ uh,~ properties that will be valuing. one of the really strong indicators for a price only up is the price guide, which you would assume to be incorrect.

Henry: But

Henry: the, comment you were making earlier around tracking agents, funnily enough there, if you add them as a feature to a model. You've got all the data on how they've

Henry: guided

Henry: properties in the past.

Henry: what's called mean, average percentage error reduces significantly. so yeah,~ we, we'll be, ~we'll be surfacing ~a ~A VM at some point down the [00:15:00] track.

Henry: ~Um, ~and one of the key differences we'll be using that price guide as it's now because that is a ~very, ~very good indicator. and that's what I observed as well ~as~

Henry: so I was ~in the, ~in the west in Sydney. You'd have some of them that you would put 200 grand on because in my price bracket, not every property but the price bracket I was looking at, you put 200 on one, you put 50 on another, and you put 150 on the other.

Henry: And then thankfully I was

Henry: lucky

Henry: enough to buy a property from the outer area agent

Henry: pretty

Henry: much at the guide. But actually, you know, fairly quoted it right, was one of those,~ um,~ which was a good pickup. And that's one of the things that we'll also be disclosing ~to, ~to buyers is the level of experience that the particular agent who a property has,~ uh,~ in that area.

Veronica: that's an interesting one. know, you've got a graphic there, so obviously, so I've only looked on the website. I haven't tried ~the, ~the app and ~um, ~there's a graphic there with a dollar per square meter. I'm guessing ~that ~that's not gonna be your main metric, just for the graphic.

Henry: Yes. the main metrics that we service is just the current active guide price versus. ~Um, ~the user also will track their, proposed price to the property so that they can have a log. so

Henry: when you,

Henry: ~uh,~ get

Henry: a chance, obviously give us a go. But basically we are creating [00:16:00] a, really easy logging system for you to navigate that whole purchasing journey.

Henry: So you can go back, for example, two months down the track and go, okay, well it probably was guiding at this, it sold at that. I thought it was here. Like, am I completely out of the money? Right. Do I have a shot in this particular market or is, are my expectations unreasonable? ~And, ~and that's the kind of thing that we're trying to serve us to buyers as much as possible is like, not that the agents or anything wrong with the markets in any way,~ uh, out of, ~out of form, but realistically, are they actually a fit for that property?

Henry: ~Can they, ~can they actually sit

Henry: with

Henry: those other buyers that compete at that level, or do they need to change their approach?

Veronica: I mean, that's really valuable because I've got a buyer's agency. I've been going for

Veronica: 17 years in this, business and the amount of times that we get people coming to us and their pain point is that they just can't get what they want for their money, which is a very common pain point. But a lot of people ~keep, ~keep trying and the vain hope that they just haven. You just gotta wait until the right one comes up. But actually what they're

Veronica: doing is that the longer they wait, the more they're getting priced outta the market. They just haven't recognized that there is that gap between what's advertised. What sells. It's almost like they [00:17:00] don't track what sells. It's just they just track what's advertised and, oh, that went outta my budget.

Veronica: But they don't sort of work out ~that ~that's because it never was in your budget. so, I think anything that does encourage the buyer to take responsibility for their end as well,~ um,~ is really valuable because a lot of people, they just blame the agent, the agents under quote, because buyers believe them. And then they compete for properties that are under quoted. That's basically why they under quote. And as you picked up ~a, ~a property that was accidentally accurately quoted what you were the only buyer or you found it easier to buy, um.~ um.~

Henry: ~Um, Uh, ~no. there were other bidders. It was incredibly competitive market,~ ~ so no, we definitely weren't the only bidders, but,~ ~it was definitely less than it would've been on a Saturday. and,~ uh, if, ~if the property was marketed probably at the kind of comparative point that it should have been.

Veronica: Yeah, and see there lies the problem, doesn't it? As a vendor, you actually want your agent to under quote, don't you?

Henry: Yes. ~Uh, ~at the moment it's a business decision, right, for the real estate agent. And that's the unfortunate reality. Like, for the real estate agents that I've spoken to,~ um,~ I guess on both sides of the fence.

Henry: they're kinda left without a choice almost. [00:18:00] Right? Because if they don't position a property to a vendor in the first place a certain way, then they won't get the gig. Right. And then once they've got the gig, if they don't position the property a certain way, people will. ~not, ~not see it. 'cause the filters, you know, sit outside of it ~or, ~or ignore it because they think somehow there's extra value in it. Because yeah, it takes you two to three to four months to get that understanding where the value's at.

Henry: If you are paying attention and if you are,~ um,~ like we were trying to track everything in the spreadsheet, but if you are, yeah. Just coming to the market, et cetera. And you see something advertised correctly, then yeah, you're quite unlikely given all of the noise around under the quoting to actually view the property. And I think that's one of the things that we're just trying to really resolve is like level that playing field. Because if everyone understands that there is such a thing as, the range and then clearly ~the, ~the difference between arranging the actual result on average or. Median results ~for the,~

Henry: for

Henry: the agent.

Henry: And there will be that leveling of transparency where real estate agents can go to vendors, set the expectations, go to bias, set the expectations, or can kind of [00:19:00] hopefully ~bring it, ~bring it closer to a couple of percent, not ~um, ~10 plus.

CB: how's it You know, how are we getting access to some of that data? And obviously it's obviously linking into the portals. Is there any plans to sort of move into that space or.~ ~

Henry: ~Uh,~

Henry: so it's user driven for off markets. So when you download ~our, ~our app, ~ um,~ you can navigate. Sold listings or rental listings, like kind of stuff ~and, ~and pulling the data. So you can say, okay, well here's a off market that I've been sent. 'cause usually it's WhatsApp or some other mechanism, right? ~Um,~

Henry: you

Henry: sent the off market, you then can search the address. Obviously in our platform will add all the data that we know. So if it was sold three years ago or bring in the sold data from three years ago to pre-populated. ~Um, ~but all things like the guide price, the current agent that, that's on you to fill in.

Henry: ~Um, ~so what we're trying to do is create that. A single view of search because to your point, like domain and REA, you can't manage,~ uh,~ off market searches with on market search. ~Uh, ~yeah, it's obviously ~not, ~not really designed for that. Whereas ~we, ~we let you edit any data because it's your platform. So if you wanna change the guide price, you change the guide price. And obviously we don't rely on [00:20:00] any of the data that you insert into the system, but it just means that you can stay in control.

Veronica: And what about Queensland? You,

Henry: Queensland's. Interesting.

Veronica: if anyone

Veronica: doesn't know, it's against the law for an agent to give a price guide in Queensland, so that is, one of the strangest responses to under quoting ever. It's like, let's just not give buyers any guidance whatsoever, but they are running blind. I mean, how do you increase transparency in a market? Where it's legislated not to be transparent

Henry: Yeah, I'm assuming you read the article. I think one case of under quoting has been reported this year, which is, obviously astonishing for all types of different reasons. ~Uh, ~so interestingly, every single property in Queensland that's for auction that gets listed on one of the major platforms has to actually have a

Henry: price

Veronica: in the backend.

Veronica: 'cause

Veronica: it's gotta come up

Veronica: in searches. ~ ~

Henry: Yeah. ~Um, ~and obviously the buyers up there are reliant on using those search criteria to try and figure out, you know, ~where the, ~where the property is positioned. So I think to answer your question more succinctly, at the very least, like we have the range in which the property appears in search. ~Um, ~so we have [00:21:00] that. ~Uh, and~ then in some cases we'll also have like the actual figure.

Henry: has

Henry: plugged in,~ um,~ to one of those systems. Which, yeah, is interesting. ~Uh, Uh, uh, uh, The, ~the agents are currently entering price guides on properties that are for auction. Because ~any, ~any other explanation for the price that they have inserted into those platforms to control that price search has to be construed as a price guide. There, there's no other way of phrasing it.

Henry: so yeah, my view is currently, the platforms are, requesting agents

Henry: skirt

Henry: that regulation at court. ~Uh, ~and it'll be interesting to see over time,

Henry: ~uh,~ what happens in Queensland because. I don't think anyone's particularly happy with it, except for,~ um,~ probably the regulator for not getting the complaints.

Veronica: Yeah, weirdly enough, the odd agent likes it.

Veronica: Buyers speak to both buyers and sellers,~ uh,~ and selling agents. You know, no one

Veronica: majority

Veronica: really do not like it, I mean, be that as it may, ~is that, ~is that really what you perceive to be the main pain point when you are buying the main frustration? That the fact that agents would, consistently under quote and buyers will get caught out until they get wise, is, was that the main pain point or are there other [00:22:00] pain points which you're building into this,~ into this, ~

Henry: No,

Henry: ~It, ~it's more around time, so it's not necessarily just the under quoting, under positioning, whatever you wanna call it, that, that's kind of semi right at the moment in Sydney. It's more just the amount of time and effort it goes into. Like trying to understand the value of property clearly,~ uh,~ and understand where it should. ~Uh, ~trust, obviously what is provided to you. It's then all the time and effort of going around to those places. You can't really arrive at a valuation that well in terms of, knowing the number you wanna pay for property unless you've seen it or been to it, or maybe have an expert advise you. and then it's all the time and effort.

Henry: You know, my personal journey, my search of us building, maintaining that kind of shared spreadsheet of understanding what we're up to, all the comments back and forth, making sure that,

Henry: you know, if we've got a contract and review with the,~ um,~ conveyance so that we're chasing them up so that we're in a position to make an offer. We get that annoying text on Thursday saying, best offer by 5:00 PM and those are the types of things that, like, there's patterns, like, and everything. Uh, Rohe, you all know you're local agents, which ones will try and push you? The week before an auction for an offer, which ones won't. ~Um, but, ~but for a [00:23:00] buyer, like you find that out,

Henry: ~know,~ you know, trial by fire, right? you're in the market trying your best, you're kind of getting prepared for Saturday, your whole Thursday gets thrown into a spin because

Henry: all of a sudden that's your focus. The text. But none of that is, Generally not new, right? Like you'll have a new agent every now and then who will be trialing different tactics and strategies, but

Henry: I

Henry: don't think it's particularly fair on consumers, to kind of go into the market, be spending that much money, be that stress and everything else,~ and,~ and be put through the ringer like that. ~um.~

Henry: I'm on a personal mission to help more people make better property decisions. You know, most people don't realize that they can cost themselves hundreds of thousands of dollars over the medium to long term when they make property decisions without all of the information that they need. And what I do is help people with tricky real estate problems, which offer masqueraders simple questions like, should I sell my investment property because the interest re payments are hurting, or should I buy before I sell?

Henry: Or the other way around. You could connect with me and access all of the tools that I've created to help you make better property decisions at Veronica Morgan dot com au. [00:24:00] And there you'll find resources for first home buyers, details about my buyer's agent mentoring program. You could connect with my Sydney based property management and buyer's agency teams, Australia wide vendor advocacy.

Henry: Or ask me for introduction to the small group of buyer agents that I would personally recommend across the country. That's Veronica Morgan dot com au. If you're considering a property move, which is buying your first time, upgrading, renovating, or investing, the team here at Alcove would love to help you think through your decision and get the finance right.

Henry: Please go to cove.com au to reach out.

Veronica: Is interesting 'cause like in my business we have eight different avatars for different types of agents and we,~ we, ~those avatars, you know, we look at how they're motivated, the conversations they have with their owners, the sort of tactics that ~they, ~they engage With buyers, you know, their processes around offers, et cetera, et cetera.

Veronica: And,~ And, ~that's brought up over, you know, ~many, ~many years experience. And so obviously we, as part of our negotiation strategy, we always have a strategy is to identify the type of agent we're dealing with so we can develop an appropriate strategy. So [00:25:00] what I'm guessing from what you are saying is that you are wanting to start picking up those patterns of behavior and then reflecting them into Platform, is that what you're proposing to do?

Veronica: And

Veronica: that requires, I guess, individual users to log in. What is it like, is that what you're proposing to try to the spotlight on the methodology engaged by different agents?~ ~

Henry: ~Um, ~yeah, so I'm not exactly sure of the eight avatars that you've built internally,

Henry: but,

Veronica: know them 'cause they're proprietary to me, but you know.~ ~

Henry: ~happy,~ happy for you to share them at any point. So, we're looking at the data on agents such as, their last X transactions, how many of them were sold prior to auction? How many of them went to auction and sold there?

Henry: How many of them passed in? How many of 'em got withdrawn at the end because obviously didn't get the result? How many of them sold private tree art through auction? How many of them were just private tree strategy in the first place? Right? So I guess at the very.

Henry: You

Henry: can understand, okay, what's the likely outcome of this campaign and does this campaign match the agent?

Henry: Right? So if 95% of their [00:26:00] properties get advertised initially as an auction, this is one of the 5% that isn't why,

Henry: ~um,~

Henry: we're not gonna obviously give them an answer as to why,~ uh, we, ~we won't know that data, but we'll at least be able to help them spot, the outliers. But then also, you know, there's certain agents that have a very strong reputation for, selling prior to auction.

Henry: So at least disclosing that to them. So again, they can be prepared the week day, whatever it is, before. ~Um, ~then there's other activities, obviously there's the, how often or frequently do they change?

Henry: the price guide, you assume in Sydney lines ar that's price guide up, right? But there are a few go yos out there. People who kind of start here, come down, they kind of couple of days before the auction then come back up. ~Um, and~ even though some of them will think ~that ~that's. Not that visible. It is. ~Um, ~so there's some agents ~I, ~I know out there that are trying to push people into auctions that kind of couple of days before thinking maybe, you know, we'll see what happens.

Henry: ~Um, ~but yeah, so I think ~there's, ~there's some key data points that we can track to build a picture of an agent. ~Um, ~whether or not I'd be putting them into avatars, is probably.

Henry: The next

Henry: step. Maybe we'll chat about that later. but ultimately we're just disclosing some of [00:27:00] those key data points.

Henry: Like,~ know, what, ~what is their,~ uh,~ typical quote to sale price accuracy. What is their typical sales strategy? Does this property fit that? Does it fit a normal area of sales? Is it beneath them? Right? So

Henry: raw

Henry: ego

Henry: peak at

Henry: some point, you know, is this property a $1 million studio and they're normally selling five, six plus million dollar properties. How likely are they to turn up, obviously to all the open homes, all that kind of stuff. So~ just, just~ try and ~build a, ~build a ~picture of ~picture of, I guess the, your competition, because as a buyer,~ that's,~ that's it. Other buyers are your competition. Yeah, but you need to know the opposite number.~ ~

CB: ~I'm, ~I've been sort of just playing around with It while we're chatting here and just thinking like through use cases and there's a property near me that I thought, I'll just check what's going on with this property because it's had multiple agents. it's been on the market for like three months.

CB: I'll be interesting to see and you know, if you just rocked up in the suburb and just didn't know presents well. This property, it's not on a bad street. It's nothing majorly wrong with it, but it's been sitting there for a while and, ~um.~

CB: bang

CB: it's been on 76 days. You obviously, you jump online, you don't gonna know that it's, I'm not [00:28:00] gonna say the dress, the property.

CB: It started with a price go to four mil, then it dropped to 3.5, then it dropped, went up to 3, 7, 5, and it's 3, 2, 5. Then with 3 3, 5. It's had multiple auction extensions. It's now down to 3.1 and like how much this property is having a, it's switched agents. You know what I mean? So there's so much just in someone looking at this going.

CB: They're really struggling to sell this property. ~Um, ~and they're massively overpriced. It,~ ~

Veronica: ~That's usually~ That's usually the issue though, you know, is there, there's something really wrong with the property or something really wrong with the vendor?

CB: you know, it's it's such great, insight to, you know, then to share that, you know, to have that as a buyer, how you use that information, that's a different skill, right? But If you did rock up in the suburb and you've looked at and you saw that sign or you missed it with your, you decided to switch suburbs.

CB: And a lot of buyers are switching suburbs, right? ~They, ~one minute they're looking here and then they have to pivot and they take their thought process from that suburb to this suburb. and I think, you know, tracking it all in some type of portal is,~ is, ~obviously, even better, right?

CB: Because it's very easily, you just get overwhelmed it's, you see this moving away from sort of the [00:29:00] individual though to the buyer's agents as your market and. You know, basically allowing them to actually also track the market better.

Henry: yeah, at the moment we're free product. So everyone can use us from,

Henry: ~uh,~

Henry: buyer's agents to mortgage brokers, to selling agents. ~Um, ~so yeah, I think to answer your question, yes, like we are moving into more professional product. ~Um, ~so which is used to, For

Henry: buyer's agents, for example, to manage that.

Henry: sourcing the properties to navigating with the buyer, their comments, feedback, ranking preferences, you know, uploading files to kind of reduce the WhatsApp chaos that kind of

Henry: can

Henry: ensue in some businesses or, ~um. ~Yeah, basically just make

Henry: a

Henry: more transparent process for everyone. ~Uh, ~and then as well for mortgage brokers, like ultimately,~ um,~ you can probably answer this question like you send someone out with a pre-approval and how does it take for 'em to actually figure out the market is not what they thought it was.

Henry: You might forewarn them and say like, I'll send you valuation reports, so trust them fully, but like it'll give you a better picture. ~Um, ~but there is that like. You know, four to six to eight week period [00:30:00] where a buyer goes into the market pre-approved and just gets their head kicked in. ~Um, uh,~ but yeah, so I think we'll,~ we'll, ~be on the,~ on the, ~side of the buyer for a while and focused on transparency there.

Henry: And then ultimately the same issues persist on the vendor side.

Veronica: So we do a lot of vendor advisory in my business and. You're absolutely right ~that, ~that when you call an agent To pitch for your business? Well, they're in sales mode. You're often asking them, really important questions

Veronica: that

Veronica: you are gonna base your decisions on, not just on whether you choose that agent or not, but whether you decide to sell now, what your price expectations are for the property.

Veronica: You know, ~um, ~how you market that property, how you present that property, all of these things. ~Uh, really, ~really, really important things to consider. Should I even sell it at all? And people ask sales agents these questions, but.

Veronica: it's

Veronica: the wrong time to get advice from a sales agent 'cause they're pitching for your business.

Veronica: They're not in~ in ~advice mode, they're in sale mode. ~Um, ~then you choose your agent, you sign 'em up in New South Wales, you get a 48 hour cooling off period, but they don't do anything until that

Veronica: period's

Veronica: expired. And then Bobs your uncle, then you start to find out whether or not you chose the right [00:31:00] agent.

Veronica: So there's a lot of, Missing information that is really essential to make good decisions, you know, decisions that you make today, that future you'll be happy about, which is one of the reasons we do offer our vendor advisory service and why it's such a great service ~and, ~and really helps people actually make good decisions at that outset that give them ~the, ~the better outcome. So, the agents in the middle, they're struggling to be transparent. They'll be transparent as much as the law makes them.

Veronica: They're struggling to be transparent with owners because owners actually don't really want an honest

Veronica: agent.

Veronica: They want somebody who's gonna flatter them. You know, buyers don't really want ~on ~on a stage agent ' which is why they tend not to compete for properties that are accurately quoted.

Veronica: ' cause

Veronica: they just don't trust them. You know what I mean? So there's all this distrust, generally speaking in the marketplace, and no one really knows. What to do with the information they're given. And they also know that there's a lot that they're not given. So ~you, ~you are sort of pitching this idea of transparency, but the next layer of that is how does the buyer know what to do with it or how does the vendor know what to do with the information once they've got it?

Henry: so we've gotta be careful not to err on the side of [00:32:00] advice. ~Um, ~so we are presenting data and insights that,~ um,~ buyers, buyer's, agents, whoever it is, can form an opinion off of,~ um,~ a news use to make a judgment. But ultimately, you know, us telling someone that this is the price that you should pay for a property, et cetera, is just not our job. well, I do believe though, by disclosing this data. ~Uh,~ fairly and accurately. There will be a leveling. ~Uh, will it, ~will it resolve every issue on the market? Clearly not. ~Um, ~but if every single buyer knew, you know, the historic accuracy of an agent, if they knew,~ um,~ obviously to your point before Chris, around the historic sales in a, an area,~ if,~ if someone was just to tell them when they're putting their search criteria, it's not gonna happen. Like. there are perverse incentives out there, right? Which kind of gear those buyers into taking that extra time they don't need to take to looking at properties that they shouldn't be looking at, when realistically, if they were told,

Henry: you're putting in maximum 1.5 million, two bedroom terrace, 5K from the city, zero results in the last, you know, 12 months have sold there. ~Uh, ~and yet actively there's like [00:33:00] eight of them. Like that should tell the story, but obviously none of the platforms are gonna go and do that. You know, and own goodwill because ultimately they're trying to get eyeballs on properties and people through doors for agents, right?

Henry: a lot that can be done. ~Um, ~will it solve all the problems? No. Will

Henry: ~ ~some people require further advice, even though we give them data? A hundred percent. Like I'm not expecting every single user of our platform to then be able to go and navigate the property only by themselves. There'll be,~ um,~ buyers that come on our platform, have the same struggles and issues they're having now. Hopefully reduced a little bit, but then still need to go and get professional help after five, six months because a computer can't tell them that they're unrealistic. That, you know, human might have to,

Veronica: Yeah. And look, I've noticed in these. Space of late. There's a lot of people trying to come up with,~ um,~ an AI buyer's agent. You know, there's a lot of very transactional desk based buyer's agents out there that personally I think what they do is ripe for the picking, you know, AI or machine learning could, replace them. But you've got a note on there,~ uh,~ on your,~ uh,~ website that there'd be an AI [00:34:00] buyer's agent support. So I'm actually curious to know what that would look like. and what

Veronica: AI are you using?

Henry: ~uh, ~so that's something that we're building. So it's not released. It's more of a

Henry: support for a buyer's agent or obviously a buyer of like regular kind of questions. so if you were to use our platform, for example, for a customer search, and your customer were to ask,~ um,~ are all these properties within X School catchment? Then we would go, because we've got the catchments,~ uh, for the, ~for the,~ um,~ public schools.

Henry: We'd

Henry: go and say, yeah, these six are, and that's that school catchment that seventh one isn't. ~ we,~ we've gotta be really careful, obviously, of what responses it can give that have to be factual based and, you know, if it asks them which property is the best value, then we'd have to suggest the rubric by which we,~ um,~ provide that.

Henry: So it would be maybe when that price per square meter we,~ you,~ you kind of are hinting at before. ~Um, but ~but they're the types of~ they're, ~things that we need to build into ~the, ~the,~ uh,~ LLM,~ ~ in the training that ~ ~ we'll do to make sure that we have a really strict set of responses that we'll use, but things like, which one is the fastest commute?

Henry: Like, we've got access to Google Maps,

Henry: APIs,

Henry: we can call in any [00:35:00] times, but, cool, well, this is your workplaces is your travel time. Or it could ask, you could upload all the photos of your house and we could tell you whether or not. Or your furniture's gonna fit which pieces of furniture you have to replace, those types of things.

Henry: Right. There's, it's a whole bunch of stuff that, that we can assist on. ~Um, ~but, your note before on the desktop buyer's agents kind of as a service model, There is a lot of legwork that could be done, obviously, through technology ~in, ~in that space. ~Um, ~but one of the key things that most of them seem to offer is that negotiation, speaking to the agent at the end,~ uh,~ almost negotiating with the buyer. That whole, human piece I think ~is, ~is a long way down the track for it. Ron.

CB: Have you got a,~ uh,~ property Dumbo for us, Henry? I mean, it's just a humorous way to sort of wrap us up just a story that you could share with us.~ ~

Henry: ~Uh, ~yeah. So if the market's going up and it's never been higher, probably dunno. ~Um,~

Henry: ~that~

Henry: ~was, ~that was my journey. We bought, obviously ~at the, ~at the peak and kind of sat there and. I think one of the almost property dumbos we did was we were looking at clearly selling,~ uh,~ after that, we moved to Melbourne.

Henry: Like all those, like life things happen, you kind of like,~ kind of like, ~should I keep paying a [00:36:00] mortgage for a place that

Henry: we

Henry: probably aren't gonna move back into? ~Um, ~so an almost property Dumbo was yeah,~ selling,~ selling our property in Sydney, which thankfully we didn't.

Henry: ~Um, uh,~

Henry: property Dumbo that's actually happened was,~ uh,~ didn't get a building in pest. ~Um. So~ the issue there was ~it's, ~it's an 1880s kind of terrace, so structurally it's brick, it's not gonna fall over. We just had some water issues kind of six months down the track. ~Um, ~but that was also, if you recall what from the wettest period in Sydney ever,~ uh,~ everything was molding in the whole house, regardless, I think, whether or not you had water ingress.

Henry: ~Um, ~but yeah,~ definitely,~ definitely recommend people get building a pest. It's just kind of hard to. Get the seventh one after missing out on a whole

Henry: bunch of properties and outlaying all that cash ~for~

Henry: for

Henry: no benefit.

Veronica: I'm gonna call that your Dumbo, because that sunk cost, you know, like you actually bought one, you bought what was seven? Building pest on properties you didn't buy. And then the one you did buy, you didn't get ~any, ~any. Report done, which is sort of interesting. It's a common mistake people make and,~ um,~ because I think the risk is in paying for the building and pest inspection, I don't think the risk is buying the property without the building and pest. ~Um, ~it's interesting though, it was a hot market. Do you [00:37:00] mind me asking what month you bought in?

Henry: May.

Veronica: Yeah, so. ~it was, ~it was almost at its hottest. You know, I remember March that year,~ I,~ I track every single month of every single year that I've been buying property. ~In, ~in March that year, the Sydney property market went up 4%. I think the Sydney property market went up 4% last year just to give it in context.

Veronica: So one month you get sort of a normal year's growth and ~um, ~it was nuts. So that was March. You would've been missing out on properties.

Veronica: If you bought in May,~ it,~ it just would've been so painful. ~Uh, ~I know that's when I started doing monthly videos for clients because I had ~to, ~to reinforce to them that ~we, ~we persist. We are not gonna just overpay and for the kitchen sink and everything, you know, that you will have to overpay, you're gonna have to pay a premium in these conditions. We've gotta be very careful about ~what we.~ What we overpay on ~and, ~and what that margin is. So there's a lot of,~ a lot of, ~really careful decision making needs to going when you're buying a startup to hot market. So congratulations for weathering that storm and not selling it afterwards. ~Uh.~

Henry: Thank you. ~It was a, ~it was a game of being the biggest idiot for a week. Right.

Henry: that was that time. It was. you [00:38:00] would look like an idiot for a week. 'cause you paid more than any money you ever been spent on a, you know, two bedroom place in Alexandra. And then the next week you'd look like a hero. unfortunately for me, that stopped after three or four weeks. ~Um, but, ~but

Henry: anyway,

Veronica: Henry, thanks so much for joining us. ~You, ~you've created,~ uh,~ well, you're involved in an app, I should say. ~Um. ~Which is born out of a pain point that your personal pain point, it's very common in the PropTech space ~that ~that's what leads people to create these solutions. So, it is bringing that experience in is obviously irrelevant because it is painful as a buyer.

Veronica: And it would be very interesting to see the transparency that you can bring to this. So I'll be watching with interest because the, some of the data points you're talking about are things that people aren't talking about. ~Um. ~Whether that's useful or not will be yet to be seen, but I'll certainly be watching with interest.

Veronica: Thanks for your time.

Henry: Thank you. Thank you both.

CB: Thanks so much,

CB: Henry.

Henry: If you have a question that you'd like us to answer in an upcoming q and a episode, you can send us a voicemail or written question via the website. The elephant in the room.com au. Or you can email us directly at questions at the elephant in the [00:39:00] room.com

Henry: au.

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