Danny Grant Part I: 10 Steps to Mastering the Auction Process

Hello, and welcome back to another episode of our podcast. This week, we're diving into a topic that applies to all sale methods and promises to elevate your skills in the real estate marketplace. We'll discuss deadlines' critical role in getting things done and the importance of understanding different sales methods. Mr. Danny Grant, an expert auction process vendor and management price improvement agent with over 25 years of experience, is joining us to share valuable insights. Danny will guide us through the first two essential steps in mastering the auction process: "List to Sell" and "The Price is Right."

In today's discussion, Danny emphasises the practicality of setting the proper foundation for a successful auction from the listing presentation. He stresses the importance of understanding the seller's motivation, timing, and destination and how these factors can influence an auction's success. Additionally, Mr. Grant shares practical insights on pricing strategies, highlighting the need to approach pricing not as an exact science but as a process that evolves throughout the sales campaign.

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Transcript

another week, another week. One week is 25 % of the time on the marketplace. And I think choosing today's topic, no matter what method of sale you use,
will escalate your skills in that area, because deadlines are where anything gets done in life as we work towards that milestone. As an educator working in all parts of Australia and around the world,
I get to see people's preferred method of sale, be it regional, as you don't know the situation of the property or person that could be at hand,
such as court appointed properties, has to go to public auction, and if you haven't studied or run one of those auctions, you wouldn't be suitable or acceptable to represent that owner.
And if this selected future owner is an existing client of yours, an established client, you'd be down on yourself that you didn't do the study to actually perform the work required,
which is part of your profession of being in real estate. And I think a really good analogy for this is driving a car. There is a lot of people that can only drive automatic cars.
They didn't learn that original skill of driving a manual car, where you've got to know how to work the clutch, do a hill start. You've got to know the right time to change the gear so it doesn't the rev the vehicle as it's in the wrong gear at the wrong time.
Well, real estate marketing is like that. It's very easy to be in the wrong gear at the wrong time. You can't do a hill start, which is improving the price, to get it to that final destination.
Whereas in private treaty, it's a bit like an automatic car. You put it in D, you just keep going and stop when you get to that destination. But it doesn't matter how long that is. There is no checking points to the gear you are in.
And still using this car analogy, what if it was an emergency? You've got to hop in somebody else's car and take them to the hospital, you hop in, but it's manual, and you say I can't drive it. I never learnt how to drive the car properly.
I can only drive automatic. So to bring clarity, skills, knowledge and depth of knowledge to this topic today, I'm going to invite into the studio one of the very best auction process vendor management price improvement agents we have ever seen over a 25 year period.
He is now in education as well. But Mr Danny Grant originally recorded auction craft. An auction craft was a ground changing moment and it was actually a workshop we did around the country.
So when we went to put this particular checklist together. It was a no -brainer for me to bring someone in at ninja level, who's now the head of education for McGraw,
Australia -wide. Please welcome to the program, Mr Danny Grant. Bailey. Danny, it is great to have you back on the program. Always a pleasure. Let's jump straight into our content.
Step number one is list to sell. Danny, take us into this. Yeah, well, look, it's my experience, Lee, that most failed auctions on auction day, they're born at the listing presentation.
So it's a matter of getting it set up, right, and how do we do that? And, you know, sometimes we get a bit over -enthusiastic, and we list things on the vendor's terms, not ours. There's a few key indicators that we need to look for.
Love that term, key indicators. If it doesn't have this, it doesn't have it. What's number one? One is, what's the motivation? You know, if there's a strong motivation behind it,
then, you know, if they're a little bit out in price, then that won't matter as much. The other is the timing. So how long do they need to be sold by? You know,
so if you ask that question, look, when do you need to be moved? And they go, oh, look, no, rush. Anytime in the next sort of 12 to 24 months, then, you know, motivation's probably not quite there. The other is the destination.
If they're clear on their destination and really excited about their destination, then you know that that links up to motivation as well, whereas if they say, yeah, I'm not sure where I'm going yet, then motivation's not quite there.
So if you've got all those things lined up pretty well, then you're generally going to list it pretty well from the start. Danny, on the Charles Tarby top 100 business stories and life lessons.
He discusses his listing presentation at the end part of his selling career. And he could only do auction because only had limited spaces, limited time, and he needed definite,
motivated sellers. Otherwise, he couldn't take them on and work for them. And he would go into the listing presentation and say, the first thing I'd like to do is set a date for when you would like the property sold.
And yes, he's referring to the auction date, but if it's price right, marketed right, and they're going to listen to him, that will be the date that it is sold. And it had such impact on the sellers.
And the rules of relationship became very clear. Yeah. And look, one of the, one of the important things also is that sometimes you can't get all your process out in the listing presentation.
You may have had it signed, but you may not have gone through in all the detail. you know, that just want to get it on the market. it's not so good.
It probably means that it's linked back to price. If you're in Queensland where we know we can't quote or lead with the price, your metric may be getting offers because there's no other way to kind of work out how you're setting.
So you may say, I'm going to need to at least see an offer. So what that does is it sets out expectations for them. So when they know that those metrics are not being met, we need to change something. Now, that could be that we need to adjust something in marketing.
It could mean that we need to improve the price. It could mean that we need to change open house times, lead photo, but at least you're kind of setting them up that remember when we met with an expectations meeting and we spoke about we need so many views and so many offers,
well, that hasn't happened. So we need to think about improving the price. Otherwise, it's not going to go so well. And what we need to avoid here is that sentiment that a lot of people say and a lot of agents say,
oh, it's early days. I always hated that term. Oh, it's early days. So you go, well, okay, if we're doing a four -week campaign auction on the fourth week, it hasn't gone well in the first week, well, there's 25 % of your campaign gone.
And you want to wait another week to have lost 50 % of the campaign. And then we're going to finally change the price. And by the time we work out whether that price is any good or not, we've already lost 75 % of the campaign at auctions next week.
You've got to have a sense of urgency on making those adjustments and the earlier that you can get the vendor aligned and that's ideally before you start the campaign, the better off you're going to be.
And the other thing also I should mention is ask for permission to not sugarcoat stuff. So is it okay if I just give it to you straight? You know, don't shoot the messenger because you're going to get some information you're not quite happy with but it's a mixture of negative and positive feedback that helps us determine the value.
Danny, absolutely brilliant. And set to sell is a term the season agent understands, whereas some of the newer ages coming in haven't had to go through that. It usually does go wrong before right because emotions are involved.
And 25 % of the campaign, it's like quarter of the years gone. If you're looking at that way, Danny, what you view on the full fee commission with incentive to do the auction correctly and get their commitment?
Adding an incentive on the commission. Yeah. Yeah, I look, I think did was increased my set fee and the incentive started at my old fee.
So I would give them that choice. So say for instance, okay, my set fee is 2 .75, but I'll actually lower that to, you know, 2 .2 plus 10 % above an agreed figure. Suddenly they've now got a choice.
But the reality is if they locked in the incentive, I was getting my fee anyway. Didn't matter where it kind of went. But when the market moves and you do really well, you can get so much more.
I'll never forget, admitted The other thing is also that if you get to the point where you're not quite aligned on where it's worth,
you can say to them, look, there's equal benefit to me as well, but it's just not there. So you kind of equally invested at a certain point. And Danny, the pre -listing information that you sent out, and today it's digital,
we've got the real -tier tools, but what was key information for you in nailing this point listing to I always like the list, you know, list, you know, from one to eight,
what's most important to you? You know, the agents fee, et cetera, communication. And that would kind of, you know, that little questionnaire on what they were looking for. And one of the questions was also,
have you sold before? How did it go? How would you write that experience out of 10? You know, if they give it a 7, I'll ask, how do I make it a 10 out of 10 this time? And it just helped me guide what's the structure of my listening presentation going to be?
What am I going to focus most on? So,
no, real -taire, I didn't start with real -taire, but certainly ended up with it, but there'd be rules within an hour that a physical pre -list kit would be delivered. And it'd be information on myself and my team.
I'd do a little thing where if I'm talking to the Wi -Fi, I'd say, look, I want to send you some information on myself and my company. It says me talking about myself too much when I'm there. Who should I address that to?
Can I get your full name? And it says, is there anyone else I need to address it too and be a nice way of easing into you know she's got a husband that is there as well but as a male agent I don't want to say is your husband going to be there because she's going to think well what don't you think I can make a decision on my own so it's a nice gentle way of making sure that you're in front of both decision
makers because it could be that she you know a lot of people don't realize that we actually to five o 'clock sometimes, Lee. And they kind of go, my husband works late or my wife's a nurse and she works late, so you're not going to see her.
And just the fact that I asked that question and could get in front of both vendors, and often I would present in the evenings after 7 o 'clock because it was Mums and Dad's Market. And I think it made a huge difference to my career and been able to close on the spot.
I think maybe they got a little bit tired at the end of the night too, Lee, and just signed to get me out of it. Danny, let's move on to point two. The price is right. The Bendor's heads are always in the wrong market.
Take us into this. Yeah, look, it's human nature to want probably 10 or 15 % more than your house is actually worth, whether the market's good or bad. That's always going to be the case. I think your mindset is really crucial in pricing.
My view is that we're not valuers. That's not our main job. You know, after 20 odd years of selling real estate, Lee, I could never really price properties properly, you know,
in a good way and a bad way. Sometimes I was wrong too high. Sometimes I was wrong too low and I'd go over. But if you go into it, like I used to love this analogy, I'd say to say to clients that, let's just say you had a goal of you want to run a marathon.
And there's a Sydney marathon coming up in six months. And you think, I'm going to need help. I'm going to need to call some personal trainers. And you call the first personal trainer. He says, great goal to have. Come and meet me each Tuesday down at the Oval and we'll start running together.
And then they call another personal trainer and that personal trainer says, well, great goal to have. I'm not sure you're going to make it yet. So I want you to come down to the studio. I'm going to put you on the treadmill and we're going to test your heart rate.
We're going to look at your running action and your shoes. And then what we're going to do is we're going to get to sort of like the seven week mark. And if you cannot run five kilometers without stopping, we're probably going to have to realign. You know,
you may not be able to run that marathon in six months. It might be more a half marathon. Now, pricing's like that. I don't know. You know, who am I to say what it is worth or is not worth? But it's the process that will get you sold,
not the promise of the price. So if you kind of look at it like that and think, I'm going to try, because every vendor wants you to try, within reason, you know, if there are a million dollars out or half a million dollars out and not motivated, well,
you're probably not going to take that business on. But you can't take hope away and also you can't take ownership of the price. You know, you've got to price it with the Vendor together. You know, bring in whatever data that you need.
It's a bit of an X -ray. Let's analyze it because this is what a buyer's going to do. They're going to look at all these properties. Take the price off as well. That's another thing I used to do. If I'd ask them on the phone, what do you think it's worth before I come out so I can bring the right comparables?
And I know they're too high. I'll take comparables without prices on them because that actually forces them to look at the quality of the houses, the box size, and they'll actually determine what it's worth with you.
So that's kind of how you've got to look at pricing, is that particularly for an auction because we don't have to be right. You know, we just have to be right about where the comparables sit. And let's just see how we go.
know, Victoria, Queensland, New South Wales, you know, you're going to be using CMAs or a statement of information in Victoria. So you've got to bear that in mind that it's not kind of putting these comparables where the hope price is.
It's where the fish are, you know, where most of the comparables are. And no buy goes out on a Saturday going, I'm approved up to $2 million from the bank. I'm going to give that all to Danny today.
They all shot conservatively a little bit under. And it's And it's that sentiment of search logical, buy emotional. So logical is I want a four -bedroom house in such -and -such -and -such -a -school zone,
and I don't want to do any renovation work. And what ends up happening to buyers is that they start getting emotionally attached to a house, they end up buying a three -bedroom house in the school zone, but it needs renovating. So no one buys anything unless I've got that emotional attachment.
So price is going to come out of the equation to a degree, it can't be the dominating factor. So when they go through the house and there's a high CMA or there's a high guide statement of information,
whatever it is indicative selling price, they're going to go, oh, geez, they're indicative selling price is like two to two, too, I don't see it. Whereas if it's sitting 10 % under that, they know they can afford it.
They're just focusing on the house. It's like trying on without price tags, Lee. You know, you go into the shop, you try all the best suits on first and they feel really good. And then the salesperson shows you the price tag and you get,
oh, shit, I didn't want to spend that. But Jesus feels good. And you end up buying it because why? You went in there searching logical, but he ended up buying emotionally. Danny,
what about taking the owners through the process and your strategy to getting the price right, including modifying or changing the guides. To understand the process is pretty crucial because it does take the emphasis off being exact on price.
So they need to know that you're actually going to try and work the price up. That's the idea, not work it down. So starting conservatively as part of that. And if you're wrong and it's too conservative, well,
we'll increase it. You know, we increase CNAs or increased guides, whatever we need to do. But Also, when you're in a set -to -sell meeting or expectations meeting, you need to explain that again and need to explain that sometimes you've got to reduce it to spark interest.
I've certainly had lots of campaigns where we've had to reduce guides to gain momentum and momentum, and then we've gone back up to where we wanted to be. You know, sometimes you can't do nothing in a campaign and just hope you've got to adjust things along the way.
It's not just price. Sometimes it can be marketing or styling, whatever it may be. Well, Mr Danny Grant, that gives us the first two big steps of our 10 steps.
And lists to sell, the prices right are probably the two most important ones as they are that preparation to the sale. Next week,
we're going to go on with points 3s, 4 and 5 as as we work through our top 10 steps for mastering the auction process. Danny Grant,
thank you for joining us, and we look forward to speaking to you next week.