New Podcast: Piers van Hamburg reveals why ‘the relationship’ is key in real estate

Piers explains the competitive nature of the industry, how agents can adapt to deal with tougher markets, how you can balance “mongrel” with doing the right thing  and the long term value of focusing on what is right for the client.

In this episode, find out:

• How doing the fundamentals will make you a better real estate agent  
• How to respond to criticism
• The real benefits of understanding the long-term perspective
• Lessons that you learn when you go through a tough market

Tune in now to hear all of this and much, much more in this episode of Secrets of the Top 100 Agents!

Make sure you never miss an episode by subscribing to us now on iTunes!

Full transcript

Speaker 1: The Top 100 Agents are the best of the best. Listing and selling more than any other agent in Australia. These are the practises, actions and beliefs of the most successful agents in Australian real estate. Raw, honest, and completely uncut.

Tim: On the show today is Piers van Hanburg. Piers is ranked number 39 in the REB Top 100 Agents ranking for 2017. Piers is with McGrath in Sydney. Hello, Piers, and welcome to the show.

Piers van Hamburg: Yeah, good afternoon, Tim.

Tim: Piers, I'm going to change slightly from what I'd planned to do today because Piers is also a blogger for us here at REB, and he's written an interesting blog, which we've actually aired today. So, it's quite a good timing that we've got you on the show today.

            And, essentially, the blog is around how the industry is obsessed with making money. And you said to me off-air that you were a little concerned that maybe you were going to upset some people, and I said, "I don't think you've upset anybody, but it's certainly got a lot of people talking. It's got a lot of interest, and it's got a lot of comments that are flowing from it." And I think that maybe we just spend a little time talking about that, and it might be quite interesting.

            So, that the industry is obsessed with money is probably something that everybody understands. And from the comments, that we've had, it seems that is the case. Piers, I want to just ask you, why do you think that is?

Piers van Hamburg: Yeah, before I say that, look, I think that's about my fifth article I've written for the blog and, you know, I really enjoyed the process. But the one that I sent off, which was to do with that particular subject, I was nervous when I sent it off because I knew it was a little bit controversial.

            Look, where it came up, was I sat in a REI think-tank, a couple of weeks ago, and a colleague of mine, Shannon Whitney, got up and he said to me, he said, "Piers, I" ... or, he actually said the group, he said, "It makes me feel sick how everything in the industry is all revolved around talking about money. Either what you wrote in GCI or what you're going to write."

            And he said, "When are agents going to focus on what's right for the consumer, rather than what's right for themselves?" And it kind of got me thinking because I've sort of thought that for a while and, hence, that's where I came up with the idea for that particular article. I've forgotten what your question was.

Tim: Yeah.

Piers van Hamburg: That was a politician's answer, wasn't it?

Tim: No, and I said, "Why do you think the industry is like that?

Piers van Hamburg: Well, I guess it's the major KPI, isn't it? I mean we ... It is what it is, I suppose.

Tim: Yeah, and it is a competitive industry and it sort of attracts people that are competitive in nature.

Piers van Hamburg: Yeah, and you can make lot of money out of real estate. And that's what people go into to obviously build wealth and, you know, build good lives for themselves. So, I can understand why people chase the dollar. Absolutely.

Tim: It is a bit short-term thinking because it's not just about the dollars, is it? The industry.

Piers van Hamburg: No. I mean, I think there's a lot more to it-

Tim: Yeah.

Piers van Hamburg: That was my thing. And I think that really, whilst money is important, you've really got to focus on what's right for the client. And that was what I was trying to get across in that article.

Tim: And I think that came across nicely in the article. So, just the next step forward is how can the industry be better? How would you like to see things change?

Piers van Hamburg: I don't really have the answer.

Tim: Yeah.

Piers van Hamburg: But, what I will say to you is, about two months ago now, I bought a Mercedes-Benz. And the process of what actually happened after I bought the car, and the amount of surveys that I had, and really detailed information they wanted to know about my experience through dealing with them, was quite incredible.

            And it's interesting. I was talking to the sales guy, that I bought it off, and I said to him, I said, "James, tell me. What I said in the survey, does that affect the way that you were paid?" And he said, "Absolutely." He said, "Basically, if you gave me really bad ... like, less than an eight, on the survey," he says, "I pretty much don't get paid."

            And that's where I was coming from, from a real estate perspective. Because sometimes, and I'm not saying this happens all the time, but I'm sure there's times when an agent gets paid a $50,000 fee. You know, the buyer goes away disgruntled. The vendor's annoyed. But the agent still gets the fee. And I don't think there's a huge amount of accountability for that.

            And that's not to take away that ... You know, most of the agents, I like to think, do a great job. But, my observation is, sometimes I have seen agents that may write big figures but kind of leave a bit of a trail of disaster through the process.

Tim: Bit of a trail of dead bodies in their wake. And it certainly is sort of short-term and if the industry is going to grow ... And I know the driver behind that conference, that you were on, was professionalism in the industry-

Piers van Hamburg: It was, yeah.

Tim: And I know that John Cunningham has been driving that art and others have been driving that art a lot. So, if the industry is to become more professional, it's going to need to ... Well, it's going to evolve in terms of being a little more, not a little more, but a lot more professional and-

Piers van Hamburg: It was exceptional, and John Cunningham is doing such a great job. I've got to hand it to John. The people at this think-tank were the best in the industry and it was really enjoyable. So, great discussion. I don't think we've got the answers to everything but it's good to be thinking what's right for the consumer, which will, in turn, it will be good for the health of our industry, and sustainability of it.

Tim: And the business of real estate is almost, at the risk of oversimplifying, but it's almost like a mix of two disciplines. One is the fundamentals of real estate and of property, and the other one is about people. People and people behaviours. And if you're going just to focus on one without ... and exclude the other, then there is going to be some kind of disconnect. But it's when you put the two together that the really successful real estate agents get that mix together nicely-

Piers van Hamburg: Yeah.

Tim: And they bring it together nicely. So, to use that example, of what you were talking about, when you bought the new car. And they were concerned not just in, you know, your experience of driving the car but your experience with dealing with the company.

Piers van Hamburg: Correct.

Tim: And with dealing with the product-

Piers van Hamburg: Yeah.

Tim: Or seeing the way that you dealt, with the company, as an extension of the product is maybe a nice way of bringing those two disciplines together, as the business starts to, you know, evolve itself to a sustainable future.

Piers van Hamburg: Yeah, yeah.

Tim: Now, there's been some criticism on the, as I mentioned to you, on the ... and I shouldn't say some criticism of it. One of the readers wrote in and said, "It's easy for you to say that now. You're established real estate agent. You have made a nice income out of the business and for you to look back now and say that it's too money focused," is a bit of a criticism. How would you respond to that?

Piers van Hamburg: I can see it from his point of view.

Tim: Yeah.

Piers van Hamburg: Because we all started from somewhere and it wasn't that ... well, it wasn't that long ... It feels like not that long ago when I was a new agent out there, you know, trying to get a couple of deals together. But it's interesting. I sent that article off to my mother before I sent it off to you.

Tim: Yeah.

Piers van Hamburg: And she said the same thing. She goes, "This is all well and good for you to say that now while you're, you know, you're doing 60 sales a year. But to the new person in the business that's maybe ... You don't have that luxury." So, look, I do agree with what he had to say.

            But what I would say to you is again, you've still got to put your clients' best interests first. So, I'll give you a good example. I had a client of mine ring me two months ago. I bought and sold for her four or five times over the last 20 years. And she said, "Piers, I've had another agent knock on my door." She said, "They reckon they've got a buyer on my house at $3.9 million. What do I do?" Now, to me that was an outstanding price. Like, I think over the money.

Tim: Okay.

Piers van Hamburg: Like, it was probably worth three and a half. So, I was ... You know, $400,000 over what I though it was worth. And I said to her, I said, "Michelle, look, I think you should take that. You know, I really think that's a great offer and if you want to sell, like, these gifts only come along every now and then, grab it and run."

            And she did that, after a lot of thinking, she did it. And, you know, the agent got paid, and I got paid nothing out of it. So, look, I think that that was, in my view, that was the right thing by the client but it probably wasn't the right thing by me in the short-term. You know, I sort of kissed goodbye to about $70,000 in commission.

            However, what I will say to you is, she consistently refers me to her friends. She would never use another agent if she was choosing an agent. And So, sometimes you've got to do things for people that might not be in your own interests, or it doesn't appear that way. But, in the long-term, it will reward you.

Tim: You've been in the business a long ... How long have you been in the business?

Piers van Hamburg: Just coming up to 21 years.

Tim: 21 years.

Piers van Hamburg: Yeah.

Tim: So, you've learnt-

Piers van Hamburg: Almost half my life.

Tim: You've evolved, and you've grown, and you've learnt some lessons in real estate along the way. And I suppose it's not just about real estate, it's about yourself as well.

Piers van Hamburg: Yeah.

Tim: If you could go back now to the Piers 21 years ago and you could talk to that Piers, what would you tell him about?

Piers van Hamburg: I probably wouldn't have changed much-

Tim: Yeah.

Piers van Hamburg:  To be honest with you, Tim. I've really enjoyed ... Well, I'm not retiring but I've really enjoyed the journey.

Tim:    Yeah.

Piers van Hamburg:   Look, other than focusing a little bit more on my database I probably wouldn't have changed anything because it's worked out well for me.

Tim: Yeah, yeah. Yeah.

Piers van Hamburg: Yeah, I've had a good journey.

Tim: So, it sounds like you've almost, from the beginning, had this understanding that this is not just about the money.

Piers van Hamburg: No, it's ... I've always taken a long-term view on it. Look, I just like to treat people well. If I have a client that's unhappy, or questions my ethics, I just can't cope with it.

Tim: Yeah.

Piers van Hamburg: To me, that's more important than the money. And I think that, if you have that attitude, the money will come secondary anyway. So, if you do the right thing consistently, for a long time, by everybody, and stay in the same area, and be consistent every year, your salary shall increase anyway.

Tim: And I think those are really wise words. If we go the other way now and say, if you would have spoken to Piers in 21 years ago, what would you have said if can speak to Piers in 10 years time, or 21 years time, what do you think you'll be saying? How do you think the industry is going to evolve? What do you think real estate agents are going to be doing in the future?

Piers van Hamburg: I mean, it's changed so much in the 20 odd years I've been doing it. I think it's going to keep changing even more.

Tim: Yeah.

Piers van Hamburg: So, what would I say to the future agent? Keep learning because it's going to keep changing all the time. I think that the old treating people well and all those values will never change. Technology may change, and the way we do things, but the relationship will always be key.

Tim: Yeah, yeah, yeah.

Piers van Hamburg: And I think that you've got to build strong relationships. I like dealing with people that I've dealt with before, or I've been referred to. If I just meet a new vendor, I'm up against four or five agents. It's tough.

Tim: The business that you're doing now, it's fair to say it's mostly repeat and referral business that you do?

Piers van Hamburg: Yeah.

Tim: Yeah.

Piers van Hamburg: 80 to 90%.

Tim: I mean, I think that's testament to the work that you've done. Now, we were just talking off-air as well around just to come back to that article that you wrote.

Piers van Hamburg:   Yeah.

Tim: Without being flippant about it, I mean the industry is a competitive industry and we know that. And I was talking to one the MDs, of one of the networks, just the other day, and she said to me, "In order to be a good real estate agent, you need to have an affinity with people. You need to do the right thing."

Piers van Hamburg: Yeah.

Tim: "But you also need to have a certain amount of mongrel inside you."

Piers van Hamburg: You have to have mongrel. That's the thing, like, there's one thing being treating your clients well but, you know, if you're too nice, and you don't have mongrel, you're not going to survive.

Tim: Yeah.

Piers van Hamburg: So, I'm super competitive. Like, I love the competition side of real estate. And, you know, I'll almost do anything to get a listing when I want it. So, I love that competition. If you don't have the mongrel then, yeah, I think that you're not going to win listings really and not put deals together.

Tim: So, how do you balance it? Because it has to be a balance, doesn't it?

Piers van Hamburg: It does, yeah.

Tim: And in your own experience, how do you balance that mongrel with doing the right thing? You know, you spoke about the clientess recently who you just you walked away from and you said, you know, that's a good deal. How did you do that? Is it just a chip inside your head that just goes that's right, that's wrong?

Piers van Hamburg: Well, don't get me wrong, the mongrel in me wants to take that listing off another agent. But then, also, I could have taken her off the agent and talked her into running a campaign. But when it comes in at 3.5/3.6, I've just lost a really good client by giving her the wrong advice. So, I've still got the mongrel in me but I just had to make a decision, on that one, that it was such a good price she had to take it.

Tim: So, Piers, out there the market is a bit harder at the moment. What should agents be doing now just to adapt and to deal with those tough markets?

Piers van Hamburg: A lot of agents have been worked through a tough market.

Tim: Yeah.

Piers van Hamburg: And it is getting tougher out there at the moment. In our market, there's still a lack of property on the market. So, low levels of stock. And, in addition to that, we're finding it's a bit harder to sell them as well. So, days of markets blowing out, it's a little bit challenging.

            So, when it gets hard, my view is you've just got to be in your absolute best form. So, when I say best form, like, I'm really getting in there. You know, I'm doing the core basics myself. I'm not delegating it to other people. I'm meeting with my vendors once a week. I'm doing weekly reports. I'm doing daily phone calls. I'm making recommendations. I'm assessing what else is on the market.

            Look, I'm all over it like a rash. Whereas, I find that when the market's easy, you can take a few shortcuts and the property still will sell. But, right at the moment, for a vendor to potentially take less than what they want, they need to know that their agent is right across it.

            So, look, we had a couple of auctions pass in last weekend. And, whilst my vendors will be disappointed, they're really happy with my service and my team's service. And we've come up with a plan to get those properties sold. So, look, it's easy to manage a client in a hot market. In a tough market, I think you're more under the microscope and you've just got to be on your A game.

Tim: It sounds like that, now the market's toughening up, where it's easy you were delegating a lot more, and you were sort of taking a bit more of a helicopter view of things.

Piers van Hamburg: 100%, yeah.

Tim: But now you're right in there, in the trenches and-

Piers van Hamburg: Yeah. And, you know, because like in a harder market you might only have one buyer. You might only get one offer. So, you've got to make sure that you get that offer together, and it's handled the correct way. Because if you lose that buyer, through mismanagement ... And that's not to say that my guys don't do a good job, but I think that my 20 years of real estate experience ... I've got incredible intuition that I can smell whether there's a deal to be done, and I can read a buyer really well as to whether they're going to perform or not.

Tim: I mean, you would have brought some experience and you would have learnt some things over those 21 years that the guys on your team don't necessarily have, so?

Piers van Hamburg: Yeah, I feel like I've got a very strong intuition.

Tim: Yeah. Now, you did write for us a blog on this very same subject and you've talked about going through the GFC, or the post-GFC period.

Piers van Hamburg: Yeah.

Tim: And you talked, and I was quite interested to read that about the lessons that you learn when you go through a tough market, and you were saying that it's important to go through tough markets.

Piers van Hamburg: Yeah.

Tim: Because that's when you learn to be, I think the words you used were, you become ... you became a better agent.

Piers van Hamburg: You do. It's character building.

Tim: Yeah, yeah.

Piers van Hamburg: Yeah. And look, the good news is, in a strong market, you can gain market share. A few of the less successful agents just give up. They put it in the too hard basket. And you'll find that the agents that do do it well will pick up market share and people will use them because they can see they're getting the results. So, there is, you know, there is a positive and a negative situation

Tim: And I would imagine you've got to develop a bit of a tougher skin, if you don't have a tough skin already.

Piers van Hamburg: You do.

Tim: And if somebody's giving you the no, or not taking your calls, you've just got to be a little bit more persistent.

Piers van Hamburg: Yeah. 100%.

Tim: Yeah.

Piers van Hamburg: Yeah. And you've got to be on good form yourself. Like, I've upped my training at the gym. I'm eating well. I'm trying to sleep well. So, I'm doing ... You've got to be on your A game, at the moment.

Tim: I mean, that's something that not a lot of people talk about. People will talk about, you know, get stuck in, and make all the calls, and be there. But the thing that is almost more important than that, or it's certainly as important as that, is to be on good form yourself when you make contact.

Piers van Hamburg: Yeah.

Tim: You can't-

Piers van Hamburg: Well, you can't fake these things. You're either feeling good and you're on, or you're not.

Tim: And if there's a hint of doubt in your mind, then the client is going to pick it up.

Piers van Hamburg:   They do pick it up. Yeah.

Tim: Yeah, yeah.

Piers van Hamburg: And I think that's the beauty of being able to deliver sometimes poor news to a client but also deliver it in a positive manner. Because even though you're giving them bad news about the way things are going, they want their agent to be positive, and they want you to be strong. And the second that you show a weakness, and they can see that you're struggling too, then they're likely to lose faith in their agent.

Tim: Yeah. Piers, it's been thrifty to have you in the studio again today. And we've talked about a lot of things. I'd just like to sort of recap and correct me if I'm wrong. I mean, the first one is, you're saying, don't make it all about the money.

Piers van Hamburg: No.

Tim: The money's important but don't make it all about the money. The client experience is probably more important than the earnings. And the earnings will come on their own. And the other one we talked about was, in the tough market, just work harder. Just be there.

Piers van Hamburg: Work harder. And look sometimes ... I mean, I spoke to my team today, look, and I said, "Guys, I actually think we're going to have to carry twice as many listings because they're taking twice as longer to sell."

            Yeah, look, it's also, yeah, it's adjusting. So, as I said to my guys this morning, "I think we're going to have to carry a few more listings because they're taking longer to sell." You know, our days on market has gone from about 14 days up to past 30. So, you know, properties are selling but it's taking longer.

Tim: And it means harder work.

Piers van Hamburg: Harder work. More vendor management. More buyer work. Back to basics and just working incredibly hard.

Tim: And, as you say, in your own experience, sometimes going through a tough market, which it seems like we're going into now, can actually be a good thing.

Piers van Hamburg: It is. Yeah.

Tim: Yeah. Good. Perfect.

Piers van Hamburg: It's part of being a real estate agent.

Tim: It's part of the game.

Piers van Hamburg: Yeah.

Tim: Piers, thank you very much for coming in. Always a pleasure to have you.

Piers van Hamburg:   Thanks, Tim.

Tim: Remember to follow us on all the social media stuff, Twitter, Facebook and LinkedIn. You can follow me too on Twitter at Timothy J Neary. Remember to tune in next week, realestatebuisness.com.au is where you will find us. There is plenty of stories there on the business off real estate across the whole of Australia, and on my guest today Piers van Hamburg. Thanks again for tuning in and we will see you next week. Goodbye.