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TPC Gold | Tom Panos: Why High Earners Stay Broke (And How to Fix It)

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This snippet is from one of our previous episodes: Secret To Making Money While You Sleep – Chat with Tom Panos. 

Some people earn six figures but still have nothing to show for it. Sound familiar? 

In this week’s bonus episode, we’re hearing from the always-insightful Tom Panos, one of Australia’s leading real estate coaches, auctioneers, and media personalities.  

Tom has worked with top-performing agents and seen firsthand why so many high earners remain financially stuck—despite their impressive pay checks. 

The Harsh Reality: High Incomes Don’t Always Equal Wealth 

Tom shares a no-nonsense take on why many professionals struggle to build wealth. He highlights a common pattern: 

  • Driving a $100,000 car on lease payments 
  • Wearing $1,500 suits 
  • Taking luxury holidays that cost $15,000+ 
  • Yet only having $5,000–$10,000 in savings 

As Tom puts it: “They’re spending more of their money and time looking like they’ve got money than actually accumulating it.” 

So, what’s the solution?  

The Path to Real Wealth: Hustle, Save, Invest 

Tom lays it out plainly: if you want financial freedom, you need to play the long game. This means: 

✅ Hustling and grinding in your 20s and 30s
✅ Saving aggressively instead of overspending on lifestyle
✅ Investing in property to build long-term passive income 

He explains why property is the ultimate “escape plan”—allowing investors to build a financial safety net, create wealth while they sleep, and eventually live life on their terms. 

Want to Learn More? 

If you’re serious about escaping the paycheck-to-paycheck cycle and ready to set yourself up for a wealthier future, don’t leave it to chance.

Join our FREE Masterclass and learn how to build a rock-solid property portfolio—without risking your lifestyle or making costly mistakes. 

👉 Get started here 

__________________

If You Enjoyed TPC Gold | Tom Panos: Why High Earners Stay Broke (And How to Fix It), You Might Also Like:

Transcript

Bryce Holdaway
You mentioned before that you buy whenever cashflow allows and hold them for the long term. You’re in the newspaper business which is in the business of reporting on property either booming or busting, and to be honest we’re about to face some headwinds with the news that we receive.  

Tom Panos
Yeah. 

Bryce Holdaway
How do you mentor people who come to you for advice around property? You know probably with the backdrop of (the) Becoming Warren Buffett documentary, the ultimate long-term investor. What advice do you give to people to say: hey look, you’ve got to play the long game here and you are going to face some of these headlines but stay the course. Do you get that question and how do you handle them?  

Tom Panos
Yeah, yeah, look, I do. I get that question all the time. But I mean, ironically, I get that question from people that rock up with a $100,000 car that’s got, you know, lease payments of say, two and a half thousand a month, they’re probably wearing a $1,500 suit. And they most likely have just come back from a holiday – that between air travel, accommodation, and drinking and partying money, they’ve spent 15 grand.  

Ben Kingsley
On their credit cards.  

Tom Panos
And they’re frustrated because what they’re doing is they’re making decent money. Because most of my conversations are with people that are in the sales professions and they’re making decent money, but they’ve got like five, ten, fifteen grand in the bank because they’re spending more of their money and their time looking like they’ve got money than actually accumulating money. So the first thing I say to them is: guys, drop the ego and understand that what’s going to give you absolute freedom in your life is not getting the approval of other people but being able to put yourself and create. You’ve got to plan the escape out of, whether you’re working in the corporate world or whether you’re working as a tradesperson or whether you’re working as a real estate salesperson, you’ve got to plan the escape. No one’s gonna come and rescue you. You’ve got to plan the escape. And for me, property investment is the escape.  

When I’m talking to a young guy, I’m saying to them, even if you write a million dollars in commissions, even if you make a million dollars in commissions, you’ve got to pay about half of that to your real estate office, leaves you with $500,000. Out of that $500,000, you’ve got to pay two admin staff, leaves you with $350,000. Then you’ve got to pay the tax office, right? So you’re going to pay a third of that, even if you’ve got a company set up, leaves you with $200,000. And you haven’t even yet bought a cup of coffee, you haven’t paid your rent, you haven’t paid your car lease payment, you haven’t paid any school fees.  

So how can you win when you play that game when you’re playing against someone else who might have $5 million worth of real estate? Well actually, don’t even talk about $5 million. Let’s talk about if they’ve got $1 million worth of real estate. They make money while they sleep. They’ll make 10% on January 1 each year because they’re playing the long game.  

So what I say is: be prepared to hustle and grind and do it hard for the first three, four, five years in saving money…in being comfortable going to bed at night knowing that you’ve got a mortgage out, which means that you’re losing a bit of flexibility in life, because it means you can’t just pack up and say, that’s it, I’m disappearing, I’m moving over to Spain for six months and partying, or I’m doing that; it creates you to have to be disciplined. Ben and Bryce, this is what I said then: Hustle and grind and save and invest in property in your 20s and 30s so you can start chilling in your 40s.   

Ben Kingsley 
Oh that’s great advice, some really great advice.   

Tom Panos
Sorry for going on, but you can, like (see) it upsets me when I see a lot of people make good money. They got great turnover, but they got zero left over.   

Ben Kingsley
They’ve got nothing to show for it, have they? They might have a few great memories in the memory bank, but a lot of it is… You know, the power of property investing is if you do the hard yards early, this can be the passive power of that income for not having to do much for it. It’s just incredible. Once you build that base wealth up, it just continues to be in perpetuity. You just continue to keep getting that rent, that passive income. The value of those assets grow and you know, you talk about the different stages in your life: the time you get, the choices you’re able to make and, you know, money’s not everything. Let’s be clear about that. But what it does allow is the choice to do what you want to do. 

 

TPC Gold | Living Off Equity: Smart Strategy or Risky Move?

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Welcome to the first bonus episode of 2025!

In today’s snippet, we’re answering a question from listener Lou, who’s wondering: Is living off equity a smart strategy for early retirement—or a risky move? 

Bryce & Ben break down the pros and cons of borrowing against equity, why passive income is key, and how having the right exit strategy can make all the difference. 

Plus, they unpack the common mistakes investors make when relying too heavily on equity and share insights on how to structure your portfolio for long-term success. 

For the full Q&A episode, tune in here: Episode 147 | Q&A – What’s Your Exit Strategy? Are You Retiring or Have You Bought a “Dud”? 

__________________

Now That You Know More About Living Off Equity… What’s Next?

We hope these insights help you on your journey to building a successful investment property portfolio and securing your financial future! 

But if you’re serious about retiring on $2,000 a week through property investing, don’t leave it to chance. Join our FREE Masterclass and learn how to build a rock-solid property portfolio—without risking your lifestyle or making costly mistakes.  

What You’ll Learn in This Exclusive Masterclass: 

✅ How to Buy an Investment Property Without Impacting the Family Budget
Think property investing is only for the wealthy? Discover proven strategies that allow investors of any income level to start building wealth through real estate. 

✅ How to Retire on a Passive Income of $2,000 Per Week with Just 5 Properties or Less
Master our 5-step framework for correctly financing, buying, and holding properties for long-term success—no matter where you are in life. 

✅ Your Most Burning Property Investment Questions—Answered!
We’ve compiled the most frequently asked questions from our 40+ years as property investment advisors, so you can skip the guesswork and fast-track your success. 

👉 Register Now

Want to Dive Deeper? Check Out These Episodes:

Transcript

Bryce Holdaway
Alright here’s the first one from Lou (via) Facebook message: Hi guys, long time listener. You take the edge off Sydney commuting, thank you. My husband and I currently have six properties in New South Wales, nothing in Sydney Metro yet, valued at $2.3 million.  

Ben Kingsley
Very good. Well done. Congratulations.  

Bryce Holdaway
And an LVR at 64% with a dollar sign at the front. 

Ben Kingsley
Almost neutrally geared right there. 

Bryce Holdaway
And listen to this…a gross yield of 8.2%.  

Ben Kingsley
Oh goodness me. Sorry, apologies. Cash flow positive. 

Bryce Holdaway
You went early. 

Ben Kingsley
Cash flow positive!  

Bryce Holdaway
That’s cash flow positive. We’re both 40ish with two kids under five. Wow, they’re busy. Our aim is to retire early with $100,000 income. Reading your book, watching the videos and listening to the podcast, I am wondering if retirement income is always based on rental income alone. Or do you ever recommend borrowing off the equity as part of an early retirement strategy? With major buffers, of course. We’ve been very wrapped up in the acquisition phase that it’s hard to see where the end is, especially when rents seem to creep up so slowly. I would love your thoughts on living off equity as part of the strategy. Thanks, Lou.  

Ben Kingsley
Thanks Lou. So there’s a bit going on there. The one thing I don’t have is the income story and I don’t have the super story. So one of the big things that we always talk about when it is your overall passive income, we don’t disseminate or dissect into what is coming off the property versus what’s the overall wealth story. So you might have some shares mixed in with that…definitely some super, unless you’re maybe self-employed and you haven’t been paying yourself super, which you should because it’s a very, very effective way to invest.  

The reality is this…we always talk about getting the money in your offsets to continually keep filling the buckets. So technically your interest is lower and at some point in time you could either retire the debt or you could have all this equity built up, all this liquidity. So it’s not that traditional borrowing and living off the equity because obviously when you do that there’s interest on interest and that’s not necessarily what I would consider a successful way of doing that because the other thing that we don’t know from Lou is: how much money do they want early versus how much money do they want late?  

So as an example, if you’re 95: How much are you going to spend of that money? Are you going to still be travelling the world? Are you still going to be jumping out of perfectly good aircraft? So you’re going to be doing all this adventure stuff or no, you sort of you know are going to be teetotaling and just sitting back and relaxing and watching the world go by and spending less? So a lot of people might want a little bit more earlier on and that’s where the idea of having that liquidity piece is important, or if they want to basically have that money indefinitely and pass it on to the next generation, then the reality is going to be that they can do that. But it all comes down to looking at those overall numbers.  

On the whole, I’m not a big fan of living off equity. I’m more of a fan of retiring the debt and obviously doing an exit strategy where you might sell one down and time that exit out. it would come down to modelling the numbers, modelling the growth story, because with an 8.2% overall gross rental yield, I’d be fascinated to have a look at what those properties are like and whether they’re getting lots of growth. But if I’m already at 64, I’d be paying those down and there may be one more in me in terms of a growth asset. So if I was looking at their portfolio, I’d probably say get me a growth asset in there and then by doing that, effectively I would sub out maybe one or two of those, even though they’re giving really strong cash flows, I might sub out one or two of those higher yielding properties that are giving me no growth in retirement. So I’d exit out of those over a period of time.  

Bryce Holdaway
Mate I like the cut of your jib. The point here is, you know, they’re relying on increase in rental alone. The important thing is if you’re effectively channelling the money back to retiring debt, you’re still increasing the rental pool through debt reduction. So that’s one thing. And two, it’s about, for me, this question, because I must admit my early strategy was the harvesting equity part of it. Thanks to you, meeting you many, many years ago, that’s swung around. But the question is, are you active or are you passive? So we would be considered active, we would be considered more likely to acquire more properties than the average person. Statistically we know that not many people buy one, and then of those who do, 73% (stop) at one. Chris Gray for example, he does that. And he’s got heaps of properties right. So he is a more active investor than someone who is more passive.  

Ben Kingsley
Correct. 

Bryce Holdaway
So therefore he’s got eternal confidence in the fact that he’s got this portfolio in the east suburbs of Sydney and will continue to grow over time.  

Ben Kingsley
And he’s value adding.  

Bryce Holdaway
He’s turning apples into apple pie. 

Ben Kingsley
Yeah, and he’s doing, you know, sort of penthouses on top of blocks of apartments and all that type of stuff. So he’s a lot more sophisticated. He’s solving bigger problems; taking on greater risk for better rewards. 

Bryce Holdaway
So that’s where people have got to work out on the scale where they are. And it’s a white knuckle ride because it relies on properties always growing and what about the fact that in the next few years we might be in a lower growth environment and if you’re racking up debt at $100,000 a year but you’re in a low growth environment, that might leave you with some anxiety around what your retirement looks like.  

Ben Kingsley
If you’ve got a $10 million property portfolio. Risking two of it. Well, that’s okay, isn’t it?  

Bryce Holdaway
But we see a lot of portfolios in this business and not a lot of people are there. So put a ring around if you see yourself as an active or a passive investor. Because if you’re passive, well then it’s more likely to give you less sleepless nights to do a debt retirement strategy and live off the passive income. If you’re active and you just get your kicks out of property and you see yourself putting on tool belts and renovating, well maybe living off equity might be for you.  

Ben Kingsley
And for these guys, it sounds like they’ve gone regional. To get those types of yield, it’s unlikely you’ll find them in any major metropolitan area. You might have one in Darwin or something along those lines. So the reality is, if you’ve perfected what you’re doing and it’s working for you, and you’re not having the tenant challenges with bad tenants in some of those locations, because I’d love to know some of the stories around each of the properties and what’s happened and the good tenants and the bad tenants, because that’s usually what you get.  

You never get a perfect run in terms of good tenants when you’re sort of looking at those types of yields in some of the regional areas. But the reality is, is if you’re up for it and you’ve perfected what you’re doing, you can keep replicating. The real question is, once you then forecast those cash flows, you’ll know when you need to stop as opposed to, you know, if you want to keep going. Because property has a high in and out cost, doesn’t it? It has a high recycle cost. Cost to get in, cost to get out. So it’s important that you don’t just keep chasing them down, when retiring the debt and living off the passive income could be the (way to) go.  

Bryce Holdaway
One of the more profound statements I heard you say very early on when we first met Ben was you said: This is my goal. This is my passive income goal. I don’t need many more properties before my portfolio is done. Job is done. You speak to Jane Slack Smith, job is done. She’s not acquiring anymore. And that was counterintuitive at the time because you can have this sense that you just gotta keep buying. Gotta keep buying, gotta keep buying, gotta have 20, 30, 40. And he who dies with the most property wins.  

But the reality is if you’ve got a clearly defined end point and you reverse engineer what that end point looks like….it takes away all the mystery and it gives you a step-by-step approach of what you actually need to do. So the fact that you can put the cue in the rack and then over time have no pressure to keep up with the Joneses, no pressure to keep up with the person who wants to be on the front page who’s got 10 or 12, because you’re actually progressively walking towards your goal with three or four or five properties.  

Ben Kingsley
Yeah, and so it’s never about the number. It’s about the income that it gives. And so if I was to go back and think about what I was thinking in 2005, it was around that $140-$150k mark. Once we were able to sort of develop the simulator and the cash flows and all of that type of thing, I’ve tweaked it little bit. It’s gone up to $160k. But it’s been at that $160k now for probably five years. And now I know what I need to do. So I’ve got one more acquisition to make, and then basically retire the debt out, and I’m done.  

Bryce Holdaway
Very good. So there you go, Lou. I guess the last point on that is The Rule of 25, Ben. If you know how much income you want, multiply it by 25 and it gives you the amount of income producing assets debt-free you need. So for example, if you can live your life off $10,000… multiplied by 25, you need $250,000 worth of income producing assets outside of your family home. But if you need to do that by $100,000 (then you need) two and half million. So you work out your number and then reverse engineer that income.  

Ben Kingsley
And so the beautiful part about that is that’s working off of 4% yield. So people will understand that it’s obviously four 25s or 100. That’s how it works. If you’re chasing a higher yield like a 5% yield then it’s the rule of 20. So it’s as simple as that. But we call it “The Rule of 25” purely to base on if we’re in this historically low interest rate environment, then it’s better to be conservative and it’s better to sort of say yield and rental yields might sit around 4% for a longer period which means capital growth is still going to be pretty strong. So it’s always a good point to make.  

Bryce Holdaway
Hey good question Lou, I think it’s on everyone’s mind Ben, as they’re building a portfolio. “What does my exit strategy look like?” So hopefully that’s been helpful to the folks. 

 

TPC Gold | 3 vs 4 Bedroom Homes: Which Do Renters Prefer?

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In today’s bonus episode, we’re digging into a question from listener Joel, who’s wondering if adding a fourth bedroom will make his place more attractive to Aussie renters. 

Bryce and Ben break down what renters really want in a property – and spoiler alert, it’s all about finding the right balance! They cover why extra bedrooms can be a win, but only if you’re not sacrificing too much living space.  

Plus, they share tips on how suburb trends and layout choices can make all the difference when it comes to attracting tenants. 

If you’re keen to know how to set your rental property up for success, this snippet is packed with insights to help you make the best choice! 

For the full Q&A episode, tune in here: Episode 178 | Q&A: Is that 4th Bedroom Such a Good Idea? APRA’s Effect on Credit Cards & What’s The Secret to a Career in Property Investment? 

__________________

Now That You Know Renters’ Preferences for 3 Vs 4 Bedroom Homes…

We hope these insights help you on your journey to building an investment property portfolio! 

Whether you’re just starting out or looking to sharpen your skills, our book The Armchair Guide to Property Investing is packed with tips to guide you along the way. And the best part? You can grab it for FREE!

If You Enjoyed TPC Gold | 3 vs 4 Bedroom Homes: Which Do Renters Prefer? You Might Also Like:

Transcript

Bryce Holdaway
Today’s Q&A Day, we love it. SpeakPipe, we always want our listeners to come and leave us a message. So here, Ivise, is our first one.  

Joel
Hi Bryce, Ben and Stiggy. My name is Joel, I’m from Adelaide, South Australia. The question I’d like to ask is what types of rooms and features do Australians want in the rental market at the moment? The property that I’m looking at is a three-bedroom with an open living area and a large home entertainment room or cinema room. Now looking at the plans, I would probably convert that into a fourth bedroom, add some wardrobes, because it’s quite large. But I don’t know what other Australians would want. So I would live there for a few years before renting it out. But I don’t know, would Australians prefer the fourth bedroom or would they prefer to have a home living area, activities rooms, stuff like that? So any input would be great. Thanks.  

Bryce Holdaway
Very good question, Joel. I would say the first thing, Ben, is my number one rule within looking at something like this is context. What’s the context for the suburb right? If you’ve squeezed in a fourth bedroom and it’s meant a very tiny living area and there’s only one bathroom and the rest of the suburb provides you much better options than that, you’ve really limited your market.  

Ultimately, I took this from Bernard Salt. He wrote the book The Big Shift back in the 90s. I read that. And he goes, Australians, it’s not a Manhattan-isation. We value space. Whenever we have a public holiday, we get the kids in the car, we drive to nature, we go to the bush, the beach, whatever. So we value space. So for me, from the buyer’s end’s perspective, if you can add another bedroom, all things being equal and you haven’t seriously compromised on the living space, it’s just a proven fact that that actually creates value.  

I mean, we have bought properties for clients where there was a precedent where just down the road there was someone with an extra bedroom, made the change, automatically created some equity. So all things being equal, extra bedrooms make a difference, but as long as it’s not coming at the expense of four bedrooms, one bathroom. That’s a nightmare. Or the suburb norm does not support what you’ve done. They’re my two caveats around that.  

Ben Kingsley
Mate, if I lift your message up to the 30,000 (ft) view, look. I think of it like a pyramid, right? So I come back to this owner-occupier appeal piece, and I say this in terms of trying to explain it. If there was a, let’s say there was a glut of properties in the marketplace. I’m talking, for whatever reason, half of our population was wiped out tomorrow, right? And that would mean that obviously rents would be at a premium. I mean, everyone would worry about why the population got wiped out. Might have been a war, you know… 

Bryce Holdaway
Collingwood premiership. 

Ben Kingsley
But just think of it like this. It’s as simple for me as what would be my preference from an owner-occupier. So if the price came down on a Toorak mansion that I could rent for 500 bucks a week, would I rent it? Yep. Because it gives me convenience, it gives me access, it gives me everything. So I always, when I’m looking at buying property, think about the owner-occupier appeal for the renter because the renter wants all the things that an owner-occupier wants.  

They don’t think necessarily like a renter. They don’t say, because I’m a renter, I don’t want this, I don’t want that. There might be an argument where they don’t want to do gardens, but that’s about it. But if you give me a four-bedroom, two-bathroom home for the same price I can do a unit in the same suburb, most people are gonna go for the four-bedroom home. Now that’s not possible because the four-bedroom home’s probably worth double and would charge a premium rent. Now that rent is set by demand and supply. And the only reason we can command a rent of that level is because of the appeal, the demand.  

So Joel, coming back to your question, if it’s got an extra room, that extra room could be a sewing room, it could be a storeroom, it could be a bedroom, it could be a study, it could be all of those things to those different people. So, Bryce summed it up beautifully by saying, we will take the extra space so long as it’s within our budget. Okay, and normally if you do get that extra space, you do get a little bit more extra rent because you’re providing more dwelling accommodation. You’re providing more residents under which you’re able to charge that out. So the bigger the property, the more bang for buck you’re going to get from a rental point of view and it’s as simple as that. So don’t try and get too caught up in: this is perfect for a single person with a dog or this is perfect for a couple who are studying at university.  

The big caveat for me, I always try and say, if you have to go and settle for an apartment, try and make sure that the toilet is outside of the bathroom. People think about that stuff. They think about the fact that if someone’s got a stomach-ache or whatever, but they’ve got to have a shower to get to work, they can’t go in there because someone’s ill on the toilet. Right. It’s little things like that that make all the difference. So a mandate for me is that.  

Bryce Holdaway
Including if you’re buying a one-bedroom apartment too, Ben.  

Ben Kingsley
Totally.  

Bryce Holdaway
Because imagine if you’ve got friends over for dinner and they’ve gotta go through your bedroom to actually go to the toilet. 

Ben Kingsley
Yeah, and you know if I’m looking at an apartment, I like apartments that really are more than 55 square meters in size because I want sort of a dining area. I want an area that I can put a table to sit down that’s not in my living room, that I’ve just got to sit on my sofa to watch the television. So that’s a big thing for me. The separate laundry is a big bonus and that’s what normally happens. The bigger space but that’s why you pay a premium for it. So it still comes back to the whole fundamental of you will get more rent for something that has more demand.  

Bryce Holdaway
The message here is don’t over-complicate it. If you can move something from a two to a three bedroom, that’s got enormous power. Three to four, it’s great for families. Four to five? Not so much, maybe.  

Ben Kingsley
No. But if you’re offering me the four to five, if you’re offering me a five-bedroom home at a four-bedroom price as a tenant, because the market might be soft at that time…guess what? The tenant’s more likely to take the five – better to put the surfboards in or to put the bikes in or to put whatever, because it’s more storage.  

Bryce Holdaway
But as the investor you want to appeal to the tenant, you also want to make it a return on investment.  

Ben Kingsley
Correct. So if you’ve paid an absolute premium for the fifth and sixth bedroom and you’re not going to get that return, that’s when it starts to taper off.  

Bryce Holdaway
Good question. We appreciate that, Joel. Thank you; hopefully that’s helped. Let us know. Send us an email. Let us know if that hit the mark for you. 

TPC Gold | What Makes Vendors Sell Before Auction?

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Ever wonder why a vendor would choose to sell before auction day? 🤔 

If you’re a buyer looking to understand the psychology behind pre-auction sales, today’s bonus episode is for you! 

From agent strategies designed to create urgency, to sentimental sellers seeking the comfort of a quick sale, this episode reveals it all.  

You’ll also get the scoop on how market conditions, interest rates, and emotions can tip the scales in your favour! 

For the full episode, tune in here: Episode 145 | 8 Reasons Why Vendors Sell Before Auction 

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Buying Before Auction? We’ve Got You Covered!

We hope this snippet helps you strategise your pre-auction offer with confidence! 

But if the auction day showdown is unavoidable, why not bring in the experts? 

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Buyers Agents can take the pressure off, so you can focus on landing your dream property! 🏡 Book in a free initial consultation today >> 

 

If You Enjoyed TPC Gold | What Makes Vendors Sell Before Auction, You Might Also Like:

Transcript

Bryce Holdaway
Ben, we’ve got a framework. We’ve got a framework.  

Ben Kingsley
No, are we unpacking a framework today?  

Bryce Holdaway
We’re going to unpack a framework. Here’s the deal, right? The amount of times that someone comes up to me and says: Bryce, tell us a strategy about buying properties prior to auction. And so there’s a bit of a technique. And then they say to me: why would someone sell prior to auction? And I’ve given up trying to come up with all the answers that people do, because sometimes it’s just you know, circumstance. So we decided that we’d actually give a framework. 

Ben Kingsley
Brainstorm it, yeah, brainstorm it, throw a few ideas out.  

Bryce Holdaway
So we threw a few around.  

Ben Kingsley
So you want me to lead off?  

Bryce Holdaway
I do.  

Ben Kingsley
Mate, I’m gonna start with an actually marketing ploy.  

Bryce Holdaway
Ooh. 

Ben Kingsley
So this is a little bit different. I sort of look at it like this where I’m basically talking about if for whatever reason there’s a time issue, and we’ll talk some about some other time issues as well I reckon, but this one is about marketing. Okay, so auctions are about creating scarcity and creating an outcome by a set time in a competition sense. So I actually think that agents might say: look, let’s put this under, you know, forthcoming auction or auction set date by this or offers before. So all of a sudden it’s actually a means by which the vendor, and they might be traveling overseas, they might have other commitments, but that’s the sort of thing for me if it is a marketing ploy to basically create that interest and get a result sooner rather than later. So I’m saying the number one is because it is an agent-led ploy to get an outcome quickly.  

Bryce Holdaway
I like it. There’s actually an agent, can’t think of his or her name, I think it was a him, on the central coast of New South Wales has a market that’s around $400 to $450 as typical sale price. And that market’s not typically where you’d expect auctions. He goes to auction, I’m pretty sure it’s a he, he goes to auction on 95% of his listings, right? And in a market that’s not known for going to auctions. Because what it does is it actually timestamps the marketing campaign, which is what you’re talking about if the listener thinks the real estate agent only gets paid for their time. So if they have a private sale arrangement, that could go for eight weeks, it could go for 12 weeks, whereas an auction campaign has got usually a finite time.  

Ben Kingsley
Because we know, don’t we, that when a property’s been hanging on the market for a while: What’s wrong with it? If it stays on too long, and we know it happens in Queensland as well, doesn’t it?  

Bryce Holdaway
The power shifts, doesn’t it?  

Ben Kingsley
Yeah, yeah. 

Bryce Holdaway
To the buyer. But this particular agent uses that as a timeframe to create scarcity, to create urgency, so that they can get through all their campaigns. So I think you’re absolutely spot on. You gotta think about: it’s not just does the vendor wanna sell to me? It’s the agent whose got ambition and goals and they’re trying, because if they do private sales all year, their income will probably be a third of what they’ve done, because they’ve got these rolling campaigns. They get the deal done before the auction, but it creates the urgency in the time frame.  

Ben Kingsley
I love it, I love it. 

Bryce Holdaway
So I think opening with that one’s a good one.  

Ben Kingsley
What do you got?  

Bryce Holdaway
For me I’m gonna go, massively, telescope, big picture. Sort of the external micro factors. Think about talk of sentiment change, think about interest rates, think about government changing, think about last year when the negative gearing debate came up. All those things create anxiety and uncertainty in the mind of the vendor and so therefore if any of that exists, I think that’s often one of the reasons why a vendor would be keen to take an offer and accept any reasonable offer.  

Ben Kingsley
We’ve already seen the Sydney market come off and that is changing the sentiment in that market. I mean, we were there a couple of weeks ago and speaking to the people there, they all said, definitely, market’s definitely slowing. So if you are that, you’re sort of thinking, your macro might only be your state or your city, and you’re starting to think well, all right, just if, you know, a bird in the hand as opposed to potentially a couple in the bush, I’ll grab that offer. All led by that particular macro factors that is changing the view and the media, you know. All the sort of boom, bust types cycles we go through in the media, so I think that’s a cracker. Alright.  

Bryce Holdaway
Alright, got another one for me?  

Ben Kingsley
Well yeah, probably the nervous seller. I mean that’s a classic one where you know they’re not familiar with auctions, they don’t understand the process. They don’t want to go through this anxiety burn that’s going to happen when they’re on the day of the auction. You know and usually you know they may be an older vendor or deceased vendor, and they don’t have their partner there anymore with them to sort of give them the confidence and the security. And even though the agent is going to hopefully reinforce that, if they’re still a little bit sceptical about agents, that can certainly be a place in that. I reckon that’s the nervous seller, the one who’s willing to sort of say, all right, well again, if I’ve got a fair price and that’s all I was looking for, that’s gonna be enough to get me moving. I’ll probably move on the sale.  

Bryce Holdaway
Yeah, well, if you think about the auction process, as you know, Ben, the person who wants the auction is the agent. The buyer doesn’t want it. In fact, a lot of the time, the seller actually doesn’t want it because, like you say, it just gives them that internal churn and that internal burn. Yeah, often they get a little bit of stage fright. And the agent is so used to the auction process that it’s so desensitized to them that they will happily take them. They know it’s worth it get it out.  

Ben Kingsley
And it’s amazing to think that some vendors are just happy to get a fair price. I mean, the vast majority and the job of the selling agent is to get the best possible outcome. But in some cases, we’ve talked about this before, where a vendor has sold to the couple that they prefer better. That they’ve got a connection with and this is a beautiful family home and I want you to create your memories there. I don’t care if someone’s gonna offer me more, because we always naturally go to that position that everyone wants the most and if this thing’s gonna sell for $400,000 above reserve, I’m gonna be doing cartwheels because that sets me up financially. But there are some vendors out there who may be nervous and who are saying, you just get me that, because that’s all I need and the job’s done.  

Bryce Holdaway
I think you raised a really good point there because if you’ve got someone who’s got a family home. It’s been their family home for 30 years and they would just love to see another family get that property, versus a developer who’s hanging around at auction.  

Ben Kingsley
Yeah, that’s another reason. Yeah, could be sold before auction.  

Bryce Holdaway
You picked up on a very good point. So I’m nervous or a sentimental seller.  

Ben Kingsley
Yeah, sentimental seller.  

Bryce Holdaway
Yeah. All right. Okay. I reckon this one’s a bit of a no-brainer, but they’re committed elsewhere. 

Ben Kingsley
Forced sales.  

Bryce Holdaway
Whenever given the choice between certainty and uncertainty, they will take it every day of the week. And of course, if they then translate that uncertainty into certainty, they can then maybe line up settlement dates as well. So, you know the classic they’ve bought somewhere else, is one of the reasons that bird in the hand is worth two in the bush.  

Ben Kingsley
Yeah, yeah, and you know in a moving market a lot of people were forced to do that, you know. They were sort of saying I just need to get in and then I’m reasonably confident that my property will get a certain value. So if they’re upsizing, you know they were forced certainly in the Sydney market It’s happening a little bit in the Melbourne market as well as opposed to going the other way around, because we would always say if you’re a conservative person you should sell first and then buy. But if the market’s moving too quickly, you might just jump in. And so obviously, if they have done that and they haven’t sold their property, guess what? Again, a good strong offer early in the campaign could potentially get that property off the market. 

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