TEITR412 (Mark Errichiello)
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Introduction to the Block Auctions
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[00:00:00] Veronica Morgan: In this episode, we go behind the scenes and under the hammer at the block. 2025 Auctions A spectacle where reality TV meets real world market forces. [00:00:10] What really happened before and after the cameras rolled were the bidding wars as genuine as they looked.
[00:00:15] Veronica Morgan: And what do the results reveal about bio-psychology, auction strategy, and the broader property [00:00:20] market?
Meet the Expert: Mark Errichiello
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[00:00:20] Veronica Morgan: To unpack it all, we are joined by Mark Eric Yellow. licensed buyers and vendors advocate with decades of on. the ground at auction experience, including bidding at the Philipp Island and Block auctions of 2024 and returning as one of the bidders.
[00:00:32] Veronica Morgan: This year at Dalesford, we wanna know what's authentic, what's orchestrated, and how did the producers get it all so wrong this [00:00:40] time.
[00:00:40]
[00:01:18] Veronica Morgan: Our guest today is Mark [00:01:20] Errichiello, co-founder and director at Master Advocates, a licensed buyers and vendors advocate, He spent decades in the trenches of Melbourne's auction scene, having attended and analyzed every block [00:01:30] auction since the early seasons.
[00:01:31] Veronica Morgan: Mark brings a candid insider's view of how this year's Darford finale blurred the lines between competition, construction, and pure theater. [00:01:40] Great to see you, mark and I. I think this is gonna be a bit of a fun conversation.
[00:01:44] Mark Errichiello: Uh, certainly wellbeing. Thanks for such a kind introduction, but hi. Thanks for having me, Veronica and Chris. [00:01:50] Great, great to see you both.
[00:01:51] Chris Bates: Good to have you on here, mark.
Auction Day Insights and Challenges
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[00:01:52] Chris Bates: I mean, for those who didn't watch the block, uh, or didn't shoot into the auctions, I mean, can you give us an idea of how it actually went and, um, from my understanding, it didn't go very well.
[00:02:01] Mark Errichiello: yeah, well.
[00:02:02] Mark Errichiello: ~from,~
[00:02:02] Mark Errichiello: from,
[00:02:02] Mark Errichiello: the production and,~ and, ~contestants
[00:02:03] Mark Errichiello: point of view,~ uh,~ didn't go very well, but there were definitely a few,
[00:02:07] Mark Errichiello: ~uh,~ serious bidders at what I believed was a [00:02:10] fair market
[00:02:10] Mark Errichiello: value. So, ~uh, ~few key factors at the
[00:02:12] Mark Errichiello: top were,~ uh,~ I feel personally they were
[00:02:15] Mark Errichiello: quoting very high to begin with, which
[00:02:17] Mark Errichiello: sometimes happens in, in regional
[00:02:19] Mark Errichiello: [00:02:20] sales.
[00:02:20] Mark Errichiello: ~Uh, ~but ~for, ~for the types of properties, you know, a mammoth.
[00:02:23] Mark Errichiello: ~Uh, ~effort to try and sell five
[00:02:25] Mark Errichiello: similar properties, five
[00:02:26] Mark Errichiello: similar blocks on one street,
[00:02:28] Mark Errichiello: ~uh, ~identical floor planes all in one [00:02:30] day in a town which never
[00:02:31] Mark Errichiello: really hits that level, close to $3
[00:02:34] Mark Errichiello: million
[00:02:34] Mark Errichiello: at best. ~Uh, and, ~and,~ um, you know, getting, ~getting that result in one afternoon's a big effort.
[00:02:38] Mark Errichiello: But then, yeah, [00:02:40] they quoted fairly high to begin with, as I mentioned.
[00:02:42] Mark Errichiello: ~Uh, ~probably should have been adjusted early
[00:02:44] Mark Errichiello: on during the
[00:02:45] Mark Errichiello: campaign, whereas, you know, at the auction day it's a little bit late once the ~first, ~first auction sold above
[00:02:49] Mark Errichiello: [00:02:50] expectations. It was a ~nice, ~nice enough property,
[00:02:52] Chris Bates: As someone who sort of tracks the property market, right?
Market Realities and Auction Strategies
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[00:02:55] Chris Bates: I mean, does it also give us a bit of a, you know, canary in the coal mine here of the dangers of, [00:03:00] you know, investing in it, also renovating in regional markets and producing a scarce pro, highly priced, product in these markets. And the dangers is that some of the [00:03:10] learnings you'd take, you know, are they just gonna go straight back to the capital cities now?
[00:03:13] Chris Bates: What were some of the learnings you saw?
[00:03:14] Mark Errichiello: Yeah,~ I,~ I'd say,
[00:03:15] Mark Errichiello: look, Alford's a beautiful
[00:03:16] Mark Errichiello: place. ~Uh, ~you just gotta get your
[00:03:17] Mark Errichiello: pricing right. ~Uh, and, ~so yeah, it's a nice place for [00:03:20] retreat. Good for getaways, good
[00:03:21] Mark Errichiello: for Airbnb.
[00:03:22] Mark Errichiello: ~Uh, you know, ~I've gone
[00:03:23] Mark Errichiello: there Fair, fair
[00:03:23] Mark Errichiello: few times with family over the decades.
[00:03:26] Mark Errichiello: ~Uh, ~they will.
[00:03:27] Mark Errichiello: Should always change ~locations, ~locations, and [00:03:30] regions.
[00:03:30] Mark Errichiello: And they're going, uh, you know, to Mount
[00:03:32] Mark Errichiello: Mount Eliza next year, which is Bayside. It will have a different,
[00:03:36] Mark Errichiello: Bayside in Melbourne, will have
[00:03:37] Mark Errichiello: a
[00:03:37] Mark Errichiello: different,~ uh,~ hype and people may be willing [00:03:40] to stretch a little
[00:03:40] Mark Errichiello: bit more for
[00:03:41] Mark Errichiello: that owner occupied sort of dream scape, getaway, waterfront.
[00:03:44] Mark Errichiello: Whereas Darford, you've got
[00:03:46] Mark Errichiello: Lake Precinct and these properties weren't close to the [00:03:50] lake.
[00:03:50] Mark Errichiello: Like you you're about a 10 minute walk to the main activity center on Vincent
[00:03:53] Mark Errichiello: Street. where you were positioned,
[00:03:56] Mark Errichiello: ~uh,~ you were opposite some, industrial,
[00:03:57] Mark Errichiello: ~some ~some
[00:03:58] Mark Errichiello: local parkland, ~ um,~
[00:03:59] Mark Errichiello: ~uh, ~yeah, [00:04:00] opposite
[00:04:00] Mark Errichiello: Parkland.
[00:04:01] Mark Errichiello: That was, ~you know, ~heritage
[00:04:02] Mark Errichiello: forest estate, but that was sort of an ~adjacent ~
[00:04:04] Mark Errichiello: adjacent view. ~Uh, ~and there was a brand new housing
[00:04:06] Mark Errichiello: estate coming up behind,
[00:04:08] Mark Errichiello: which not everyone may have been [00:04:10] aware of. Right, right. To your back fence, high density.
[00:04:12] Veronica Morgan: so it really wasn't in prime part of town. and they're really asking for sort of almost four [00:04:20] times the median price In the area. and they got five properties that they're trying to flog in one afternoon, all trying to get four, four times higher than the [00:04:30] median. So I guess ~that, ~that is a huge ask in any market. So I guess you could argue that they got three away, didn't they, outta the hammer? And you could argue maybe that's actually good
[00:04:38] Mark Errichiello: Uh, yeah. In, h in [00:04:40] hindsight,~ the,~
[00:04:40] Mark Errichiello: the levels reaching over 3 million,
[00:04:42] Mark Errichiello: ~uh,~ was a good result to get three in one afternoon, and you've got one
[00:04:45] Mark Errichiello: concentrated group of buyers, and it is reality In tv. You're [00:04:50] attracting
[00:04:50] Mark Errichiello: millionaires. We're not, ~you know, ~talking about where they pitch, trying to
[00:04:53] Mark Errichiello: get affordable housing for mom and dad investors.
[00:04:56] Mark Errichiello: I, I don't deal with many mom and dad investors spending $3 million.
[00:04:59] Mark Errichiello: [00:05:00] so, it's a,
[00:05:00] Mark Errichiello: it's a,
[00:05:00] Mark Errichiello: different market.
[00:05:02] Mark Errichiello: ~Uh, ~and you know, there were some bidders even
[00:05:04] Mark Errichiello: when the
[00:05:04] Mark Errichiello: one that passed in where we bid,
[00:05:06] Mark Errichiello: ~uh, ~there were bidders very close to the reserve price, the [00:05:10] initial reserve price and what
[00:05:11] Mark Errichiello: wasn't good optics on national TV
[00:05:14] Mark Errichiello: and for the agents were,
[00:05:16] Mark Errichiello: ~you know, ~we are getting close to two million nine hundred
[00:05:18] Mark Errichiello: fifty two million nine hundred
[00:05:19] Mark Errichiello: and [00:05:20] seventy, and they pause the auction,
[00:05:22] Mark Errichiello: ~uh, you know, ~it speeds up a little bit in TV land, but you've
[00:05:24] Mark Errichiello: got,~ um,~ vendors, which been the studio giving the sales
[00:05:27] Mark Errichiello: agents instructions
[00:05:29] Mark Errichiello: to [00:05:30] increase the reserve and put in a vendor bid
[00:05:32] Mark Errichiello: an extra a hundred and 130,000 above the top bidder
[00:05:36] Mark Errichiello: on the day,
[00:05:37] Mark Errichiello: which ~increased ~
[00:05:37] Mark Errichiello: increased the reserve by
[00:05:38] Mark Errichiello: 110,000 from where they [00:05:40] were setting it
[00:05:40] Mark Errichiello: in hindsight, looking at
[00:05:41] Mark Errichiello: it on tally.
[00:05:43] Veronica Morgan: Wow.
Vendor Behavior and Auction Dynamics
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[00:05:44] Veronica Morgan: So ~this, ~that, I mean, that can happen during an auction, A normal auction, the vendor start suddenly starts thinking, I'm not that [00:05:50] motivated to sell. And they put the price up. But I mean, overall though, how different. Is the block auction environment from a normal Saturday auction.
[00:05:58] Veronica Morgan: ~And you know, ~and what does that say, I guess, about [00:06:00] how emotion drives bidding, but there's also the vendor behaving in a way that most vendors don't behave and controlling the agent in a way, I think that probably most vendors don't [00:06:10] control agents either. Would you agree that that all plays into a really different,
[00:06:14] Mark Errichiello: Yeah, I'd say very rare for vendors to behave that way,~ um,~ in a real,
[00:06:18] Mark Errichiello: real life [00:06:20] environment. ~And it is the,~ the, auctions do flow in the
[00:06:21] Mark Errichiello: correct way, but I
[00:06:22] Mark Errichiello: think. As far as live the way ~they, ~
[00:06:24] Mark Errichiello: they, ~you know, ~prerecord them, but they're happening live. If they pause them for a little
[00:06:28] Mark Errichiello: bit to take instructions, they might [00:06:30] speed that up on air later,
[00:06:31] Mark Errichiello: the actual break.
[00:06:32] Mark Errichiello: But everything, you've got
[00:06:33] Mark Errichiello: consumer affairs standing there, everything's happening
[00:06:36] Mark Errichiello: within legislation and within
[00:06:38] Mark Errichiello: vendors rights. But that point [00:06:40] you made
[00:06:40] Mark Errichiello: about.
[00:06:41] Mark Errichiello: a, you know, instructing agents in a
[00:06:42] Mark Errichiello: different way. ~Uh, ~agents probably feeling the pressure to just say yes and go ahead with the instructions.
[00:06:49] Mark Errichiello: Whereas In, [00:06:50] in,
[00:06:50] Mark Errichiello: ~you know, ~my past career
[00:06:50] Mark Errichiello: in sales that's happened once or twice where vendors~ not,~
[00:06:53] Mark Errichiello: not
[00:06:54] Mark Errichiello: reading the room, not
[00:06:55] Mark Errichiello: listening to the market, and giving instructions that
[00:06:58] Mark Errichiello: aren't
[00:06:58] Mark Errichiello: realistic,~ um,~ when you [00:07:00] could make a good sale of, ~you~
[00:07:01] Mark Errichiello: ~know, ~above fair market value on the
[00:07:02] Mark Errichiello: day.
[00:07:03] Mark Errichiello: And sometimes agents would just say, okay, well, let's, ~you know, ~agree to disagree and part ways
[00:07:07] Mark Errichiello: and withdraw
[00:07:08] Mark Errichiello: rather
[00:07:08] Mark Errichiello: than, ~you know, um, ~moving on. ~And, ~
[00:07:09] Mark Errichiello: [00:07:10] and,
[00:07:10] Mark Errichiello: the rhetoric in the news, wasn't very fair to the
[00:07:12] Mark Errichiello: agents either.
[00:07:13] Veronica Morgan: it's really difficult? I've been a selling agent too, and I know when you've got a vendor that sort of goes a bit rogue during the [00:07:20] auction,~ um,~ that is really difficult 'cause you are under the pump. You've got buyers there, you've had conversations with those buyers to a certain level that you've had the same conversations with your vendor As long as you're a good [00:07:30] agent, you know, hopefully what you're trying to do ~is, ~is build a competition and hopefully bring the two together.
[00:07:34] Veronica Morgan: But when you've got a vendor that then goes. Well, I, I'm not happy with that anymore and I'm gonna increase ~my, ~[00:07:40] my reserve. There's also underquoting legislation, there's all sorts of, ~you know, ~legislative pressure. You've got consumer affairs there, as you said, who are the regulator in Victoria. ~Um, and, ~and [00:07:50] you got cameras on you that ~can, ~can recording and then broadcasting how you are reacting to that owner, sort of making ~these, ~these demands.
[00:07:58] Veronica Morgan: That must [00:08:00] make. Very di like you say, it's a bit unfair on the agents, but also a lot of buyers in these circumstances. If this does happen off camera in a normal auction, the buyers turn around and say, oh, the agent [00:08:10] underquoted. But sometimes the owners will just take you by surprise as an agent, don't they?
[00:08:14] Veronica Morgan: I mean, just because the reserve ends up being a lot more than the guide was, doesn't [00:08:20] necessarily mean the agent's under quoted,
[00:08:21] Mark Errichiello: Yeah. And, and that's true. ~Uh, that. that ~
[00:08:23] Mark Errichiello: that can happen in that scenario. And in this scenario,
[00:08:26] Mark Errichiello: ~they,~ they quoted very high and then they set a reserve just [00:08:30] below.
[00:08:30] Mark Errichiello: The bottom end of the estimate guide.
[00:08:33] Mark Errichiello: And then
[00:08:33] Mark Errichiello: they increased it as they needed to in the auction. So
[00:08:36] Mark Errichiello: it was
[00:08:37] Mark Errichiello: sort of,
[00:08:37] Mark Errichiello: ~you know, ~was it premeditated or not ~that ~that [00:08:40] scenario could happen.
[00:08:41] Mark Errichiello: And, you know, it's happened in the past on the show,
[00:08:43] Mark Errichiello: ~uh,~ but it's not, it's, you know, it's a bit on the nose. ~And, ~and
[00:08:46] Mark Errichiello: really if you talk about market value, we've got a public [00:08:50] auction. We've got two or three buyers,
[00:08:52] Mark Errichiello: 20 k shy of the reserve, all willing to compete just under 3 million.
[00:08:56] Mark Errichiello: Well, that's setting
[00:08:57] Mark Errichiello: ~the, the, ~the market opinion and the market value ~in my, ~in [00:09:00] my belief,~ they,~ they can choose not to take it.
[00:09:01] Mark Errichiello: And that's
[00:09:02] Mark Errichiello: what
[00:09:02] Chris Bates: obviously you, um, represented Adrian Portel, I believe at other auctions.
The Reality of Property Flipping
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[00:09:07] Chris Bates: And, you know, he had unlimited cash and he was willing just to [00:09:10] spend whatever. And it became a little bit of a fast, right? Because end of the day, it's not really like a true like auction. And you've got these bidders that are buying things for, you know, like.
[00:09:19] Chris Bates: Do you [00:09:20] think that this was just the most real auction out of, of the block and this is what it should be like? And you know, and I think this is, this is what people really want to see. I mean, it wasn't great for the contestants, right? But this is [00:09:30] just the real reality of, of building, you know, and renovating.
[00:09:33] Chris Bates: and it's how hard it is to make a profit. And I think other seasons they sort of lose the point, right? Because when it does go for [00:09:40] prices, it just wouldn't actually get in the marketplace. It starts to, yeah, people starts to lose interest. Do you think that was a good move by
[00:09:45] Mark Errichiello: I think that's a, it's a fair comment because Yes, in the past
[00:09:49] Mark Errichiello: I was [00:09:50] fortunate it was a great experience that, that year 2024
[00:09:53] Mark Errichiello: with Adrian Portelli and,~ uh,~ renovating and
[00:09:55] Mark Errichiello: trying to flip a property in most
[00:09:57] Mark Errichiello: markets is a risk. in a
[00:09:58] Mark Errichiello: short period of [00:10:00] time, right? You're doing it in a very fast period of time.
[00:10:02] Mark Errichiello: You're spending premium dollars, like you're setting the stage for premium property.
[00:10:06] Mark Errichiello: They're only about 36 squares, but you look at all the other [00:10:10] pressures
[00:10:10] Mark Errichiello: in the market trying to quantify,
[00:10:12] Mark Errichiello: securing the
[00:10:12] Mark Errichiello: land, getting the subdivision, getting the structures up, getting the fit
[00:10:15] Mark Errichiello: outs done. A little bit different with reality
[00:10:17] Mark Errichiello: tv.
[00:10:18] Mark Errichiello: They've got all their sponsors and materials [00:10:20] come in and
[00:10:20] Mark Errichiello: trades,~ but,~ but,
[00:10:21] Mark Errichiello: if you quantify it ~on a, ~on a you know, retail value. ~um, ~and then try to flip it for a profit. Very risky. And this was a little bit more real this year. People were [00:10:30] probably pulling, you know, cool the jets a little bit ~when it ~when it started getting close to 3 million.
[00:10:34] Mark Errichiello: I think the majority of buyers
[00:10:35] Mark Errichiello: ~and ~there's been some big sales in Dallas for over two and a half million,~ uh,~ but [00:10:40] maybe better positions. This was probably ~on the, ~on the fringe of a
[00:10:42] Mark Errichiello: prime
[00:10:43] Mark Errichiello: location.
[00:10:44] Mark Errichiello: ~ You know, but, um,~
[00:10:44] Mark Errichiello: ~uh, you know, ~
[00:10:44] Mark Errichiello: and it's also
[00:10:44] Mark Errichiello: subjective, like ~when you, when I, ~when I participated
[00:10:47] Mark Errichiello: 2024,
[00:10:48] Mark Errichiello: it's the purpose [00:10:50] what you're acquiring it
[00:10:51] Mark Errichiello: for.
[00:10:51] Mark Errichiello: Sometimes you are willing to stretch a bit further. 'cause there was a different purpose afterwards. It was to acquire the lot.
[00:10:56] Mark Errichiello: And now they're still in the system. There's a
[00:10:58] Mark Errichiello: big giveaway. ~Um, you know, someone won the, ~someone [00:11:00] won the, took the cash instead of the property. And there's still giveaways
[00:11:02] Mark Errichiello: happening now where all five are going out. So
[00:11:05] Mark Errichiello: I guess it, it's ~different, ~different, playing field with different buyers and big
[00:11:09] Mark Errichiello: [00:11:10] budgets.
[00:11:10] Chris Bates: Yeah.
Buyer's Perspective and Investment Risks
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[00:11:10] Chris Bates: I mean, end of the day the block's not so much more than just the auction data, right? It's a, like you say, it's learning about sort of design trends, you know, latest materials, more reality [00:11:20] TV than actual reality, right? So it's, it's, that's what people get wrapped up in. And the auction day's, just the final event, but.
[00:11:25] Chris Bates: I do feel like it's, it is kind of our competition, right? So I feel like it [00:11:30] gives, and there's definitely been times when people have thought it's so easy to flip, right? When the blocks numbers have just gone through the roof and people just start to get that overconfidence and all of a sudden we've got a nation of [00:11:40] flippers that, you know, and, and we've had those flipping booms in the past, haven't
[00:11:43] Mark Errichiello: Yeah. Yeah. And I
[00:11:44] Mark Errichiello: look, I I was, I had, ~you know, ~a few good years in property, even when I was in sales, where there was trends [00:11:50] where, ~you know, ~even people just Getting plans and permits
[00:11:52] Mark Errichiello: and flipping property,~ uh,~ or renovating quickly,
[00:11:54] Mark Errichiello: quick refurbishments and making a
[00:11:56] Mark Errichiello: profit in less than a few months. I think that's a big on area
[00:11:58] Mark Errichiello: now, and we've [00:12:00] got. ~Uh, ~pressures
[00:12:00] Mark Errichiello: with,~ uh,~
[00:12:01] Mark Errichiello: even construction and tax I mentioned in a recent article. Supply and actually delivering new stock to the market
[00:12:08] Mark Errichiello: building costs, holding [00:12:10] costs,~ uh, you know, ~interest, all of that. ~it ~it all feeds into
[00:12:12] Mark Errichiello: the end purchase price that has to be passed on,
[00:12:15] Mark Errichiello: and that's, that's what's making property less affordable.
[00:12:17] Veronica Morgan: But these people are buying fully furnished [00:12:20] houses, so you know, they're paying stamp duty on, ~you know, ~the dining table and the couches and, ~you know, ~the artwork and stuff. ~You know, like, ~I find that ~quite, ~quite outrageous. But last year, you~ you know, you said that the, ~[00:12:30] you bid on Phillip Island and you did make a, a name for yourself as a decoy bidder.
[00:12:34] Veronica Morgan: ~Um, what was the, ~what was the strategy behind that?
[00:12:37] Mark Errichiello: I,
[00:12:37] Mark Errichiello: actually had been [00:12:40] introduced from some people that,~ uh,~
[00:12:41] Mark Errichiello: knew myself in the industry ~and, ~and some of Adrian's people that made an introduction to us just a few weeks before. ~Uh, ~and so the strategy was very clear [00:12:50] that it had to be,~ uh,~ operating,~ uh,~ anonymously, keeping the identity of the client protected until it was all.
[00:12:56] Mark Errichiello: Revealed or successful, and the strategy was to purchase the [00:13:00] lot
[00:13:00] Mark Errichiello: for, you know, and then later revealed,
[00:13:01] Mark Errichiello: obviously the strategy
[00:13:02] Mark Errichiello: was to put through,~ uh, his, ~his quite unique business model, LMCT plus. ~Uh, and, ~and so
[00:13:07] Mark Errichiello: the reason to purchase one, at least [00:13:10] myself and bid against him on a few was exactly as you said,
[00:13:12] Mark Errichiello: going cover. And throw some of the other bidders off
[00:13:16] Mark Errichiello: with big pockets and big purses,~ uh,~ so that they wouldn't add a spite, [00:13:20] just compete a bit,~ uh, or, ~or work out what was going on. ~Uh, and it, ~and it worked. ~You know, ~it doesn't always work.
[00:13:24] Mark Errichiello: I've done it
[00:13:24] Mark Errichiello: a few times for,
[00:13:26] Mark Errichiello: you know, general buyers when we're just buying one property, but ~that,~
[00:13:28] Mark Errichiello: that was definitely a different [00:13:30] beast where you've got the same people questioning you in between each auction as they're getting recorded, who you're acting for, and the same people competing room your house.
[00:13:37] Mark Errichiello: to house.
[00:13:38] Veronica Morgan: So, back to Daylesford though, you said [00:13:40] that these results hint at where the real market's heading. I mean, what signs stood out to you about buyer sentiment, and confidence?
[00:13:46] Mark Errichiello: ~Uh, ~
[00:13:46] Mark Errichiello: I think that,~ uh,~ when you talk about even
[00:13:48] Mark Errichiello: social proofing, [00:13:50] even if a few buyers
[00:13:50] Mark Errichiello: ~had ~had,~ uh,~ a bit more money in the pocket,
[00:13:53] Mark Errichiello: when people started to slow down and draw their bids back, below 3 million, everyone started to follow suit. The [00:14:00] confidence. started to drop, then the the energy in the room starts to drop as well. cause you're seeing people '
[00:14:05] Mark Errichiello: witness, like the first one go pretty hot to
[00:14:07] Mark Errichiello: $3.4M just over [00:14:10] $3.4M And then when they start
[00:14:10] Mark Errichiello: passing in or struggling,~ uh,~ yeah. And as well, I think the buyers that were left over there were a few other buyers agents in the room as well. People probably scrutinizing values a little [00:14:20] bit more
[00:14:20] Mark Errichiello: ~and, ~and ~um, you know, ~feasibility, A funny point you made about the stamp duty on all the furnished
[00:14:25] Mark Errichiello: items. 'cause that They were, you know, mentioning that there's close to some of them four to [00:14:30] $5 million of depreciable
[00:14:31] Mark Errichiello: items and you've got, you know high-end products. ~Wine, ~wine cellars, stocked, and cars
[00:14:37] Mark Errichiello: and
[00:14:37] Mark Errichiello: couches and all of
[00:14:38] Mark Errichiello: that. Do you need it [00:14:40] all or would you sell it?
[00:14:40] Mark Errichiello: But, you know, paying stamp duty on it, ~it's a, ~it's ~a different, ~a different ball game.
[00:14:44] Veronica Morgan: yeah, it's a 6% premium on everything straight up.
[00:14:47] Mark Errichiello: there, if you love the property
[00:14:48] Mark Errichiello: and it's your dream home, you've [00:14:50] gotta, you just walk in and everything's there. But
[00:14:52] Mark Errichiello: it's,~ um,~ still a lot of coin.
[00:14:54] Veronica Morgan: I mean, Chris's point earlier about, ~you know, ~maybe this most recent one, and maybe the first one [00:15:00] were the most honest ~in, ~in the sense that had real buyers on it, ~you know, ~vying for individual properties whilst we can say it's reality television, at the end of the day, unless you've got someone like Adrian [00:15:10] Patel, ~you know.~
[00:15:10] Veronica Morgan: Normal people are trying to buy these properties. ~I, I, I, ~I'm at a loss. Like I've watched this, I didn't watch this series, but I have watched some of them in the past and I'm really at a loss. 'cause I think they just look like they've just [00:15:20] gone up so fast. And that makes me very nervous, just quietly. So I'm, I'm personally at a loss.
[00:15:26] Veronica Morgan: But the client that you represented this time with, like what's, I know [00:15:30] you can't tell us,~ uh,~ specifics about them, but just broad brush, what type of buyer wants to buy a property like this?
[00:15:36] Mark Errichiello: Yeah, I can't say who
[00:15:37] Mark Errichiello: the client was, but it was
[00:15:39] Mark Errichiello: [00:15:40] looking
[00:15:40] Mark Errichiello: ~at, a, ~at a fair opportunity. And even at that level, ~you know, ~the reserves were probably. Already above a fair level, in my opinion. Maybe I'm too conservative, but when I'm looking [00:15:50] at location and
[00:15:51] Mark Errichiello: property type, can we get a different spot, a better location, similar
[00:15:55] Mark Errichiello: house,~ uh,~ without all the other bells and whistles ~and ~
[00:15:58] Mark Errichiello: and ~you know, ~come off a few hundred [00:16:00] thousand dollars, better. ~Uh, and, ~and if I'm confident in that, ~you know, ~clients usually agree. We come from a similar mindset.
The Role of Buyer's Agents
---
[00:16:06] Veronica Morgan: Because that was, I guess it's always been my concern on that show when you've got [00:16:10] buyer's advocates really just wanna get their face on television, show how good they're at bidding. ~Um, ~I wonder how strategically are they operating?
[00:16:16] Veronica Morgan: Are they actually advising their client on, well, is this their value or [00:16:20] not? Or really going into the depths of why do you wanna buy this? Why, ~you know. You know, ~or are we just all wanting to be on television, all being caught up in the showmanship? ~You know? ~And I you know, like I know you, and I've known you for many [00:16:30] years and I know that you're a serious advocate.
[00:16:31] Veronica Morgan: You're not one of these people that goes out there like a show pony, however you are there. You know, like, it's so how do you feel about
[00:16:39] Mark Errichiello: think but I'm probably more [00:16:40] cautious because of
[00:16:41] Mark Errichiello: that and my nature and the
[00:16:42] Mark Errichiello: way it can
[00:16:43] Mark Errichiello: be perceived. ~Uh, ~and I feel that anyone can bid sometimes. Silence is golden if the
[00:16:48] Mark Errichiello: opportunity's not right and the [00:16:50] price is not right,
[00:16:51] Mark Errichiello: ~uh,~ sometimes it's wiser just to walk away.
[00:16:53] Mark Errichiello: ~Um,~
[00:16:53] Mark Errichiello: ~you ~that's reading the room, but having done your homework,
[00:16:55] Mark Errichiello: you know, when to bid confidently or just sit back.
[00:16:58] Chris Bates: That's exactly the point, right? [00:17:00] Like, are, these great investments stack up on their own two, you know, feet regardless of the show because the show comes and goes, right? Like it's, it's all hyped today. You [00:17:10] buy a property, you take, the investor takes out the mortgage or they in, it's like, unless they've got unlimited cash and they don't really care about investment returns and they just really love this place in Darford and they're just gonna [00:17:20] use it for holidays. There are obviously investors out there, but most people are like, they need to make sure they get a return on their investment. Right. And um, even things like land tax [00:17:30] over there, there's just a lot of costs. but I mean, you, you're right, and these properties, they could Airbnb really well. They could, um, get a lot of depreciation on them.
[00:17:37] Chris Bates: but there's gonna be a price where you think, hang on a sec, [00:17:40] this is just not worth it. I think, you know, a lot of buyer's agents on those shows is it kind of gives the buyer's agency a little bit of a. A challenging name, right? Like it's, it's like, Yeah, I can help you buy at [00:17:50] auction, but that's a very small slither of what a value of a buyer's agent, right?
[00:17:54] Chris Bates: The, a lot of the values in actually helping 'em assess is this the, for investors particularly, is this a good use of cash? [00:18:00] And, um, yeah. Is that how you sort of approached it, mark? Like you had to say to the clients, look, I'm happy to represent you, but you know, I'm only representing you, I think fair value's at X price.
[00:18:09] Chris Bates: [00:18:10] Um, if you go above that, this is your sort of obviously doing it for a lot more personal reasons rather than investment
[00:18:15] Mark Errichiello: yeah,~ We'll,~ we'll, and, that's well, said, Chris. 'cause you, you'll, give you advice of where I would tap out [00:18:20] personally, and you can show, ~you know, ~
[00:18:20] Mark Errichiello: data to
[00:18:21] Mark Errichiello: support that or if this is trying to set,~ uh,~ prices in the region, then ~it's, it's a, ~it's a little bit of uncharted territory as
[00:18:27] Mark Errichiello: well. ~but ~but again, they're on their own if they [00:18:30] wanna pass that point,~ uh,~ and they're taking a little bit more risk. ~You know, ~they've got a lot of cash and they don't care about the cost of doing business in time, everything will have growth Once all the depreciation's gone [00:18:40] and ~the, ~the hype of, ~you know, ~even if it was Airbnb, say. staying in a dalesford
[00:18:44] Mark Errichiello: block home,~ uh,~ that will have some hype and benefit for a while,
[00:18:47] Mark Errichiello: but I think ~in, ~in time.
[00:18:49] Mark Errichiello: [00:18:50] Melbourne has got some growth,
[00:18:51] Mark Errichiello: but if you can't, if you can't play that game and
[00:18:53] Mark Errichiello: take that risk to weight and you are forced to sell in that period, then that's a big haircut you're gonna take in the loss and stamp [00:19:00] duty and everything else.
[00:19:01] Mark Errichiello: ~Uh, and land, ~and land, land
[00:19:01] Mark Errichiello: tax ~isn't ~isn't at a low level in Victoria when you're playing with those type of dollars.
[00:19:07] Mark Errichiello: ~You know, ~there's probably ~less, ~less risk when
[00:19:08] Mark Errichiello: you're buying,
[00:19:08] Mark Errichiello: you know, older [00:19:10] investments,~ uh,~ and houses under a million dollars in
[00:19:12] Mark Errichiello: sub suburbs. Closer to the metro,
[00:19:14] Mark Errichiello: ~but,~ but
[00:19:15] Mark Errichiello: you're spending over, ~you know, ~$3 million. It's a lot of land
[00:19:17] Mark Errichiello: tax each year,
[00:19:18] Chris Bates: I haven't done the numbers. I haven't read any [00:19:20] articles either, so I'm, I'm putting on the spot here, but. Has anyone ever done, like, it'd be quite simple to do like the block performance, you know, like people, the purchase price, the growth that made, how much under [00:19:30] performance in the market, because you've got addresses, you've got sale prices, like have you actually quite easy to do it?
[00:19:34] Chris Bates: Have you ever compared like how the performance of block properties goes?
[00:19:39] Mark Errichiello: [00:19:40] Yeah, retrospectively, it'd be a good
[00:19:41] Mark Errichiello: exercise.
Exploring Melbourne's Property Market
---
[00:19:42] Mark Errichiello: I'd probably interested in doing that myself now, but
[00:19:44] Mark Errichiello: because they've all been in so many different regions, I'd probably look more in the suburbs
[00:19:49] Mark Errichiello: At a
[00:19:49] Mark Errichiello: micro [00:19:50] level and those
[00:19:51] Mark Errichiello: similar properties,
[00:19:52] Mark Errichiello: ~but,~
[00:19:52] Veronica Morgan: There's a lot in Melbourne. I mean, I spend a bit of time down in Melbourne at the moment and I'm constantly walking past the buildings and go, oh, remember that one? ~You know, ~you, it's sort of [00:20:00] everywhere. So ~what ~what process?
Pricing Properties with Furniture
---
[00:20:02] Veronica Morgan: I know what process I goes through and we're pricing a property for a client.
[00:20:05] Veronica Morgan: But when you're trying to price a property that is meant to set a record. ~You know, ~[00:20:10] is meant to be more than really is expected for an area, but also is full of furniture. Like what other factors do you have to take into account when you try to say, well, [00:20:20] where's fair value?
[00:20:21] Mark Errichiello: Yeah,~ and,~ and like the
[00:20:22] Mark Errichiello: furniture, I
[00:20:23] Mark Errichiello: take
[00:20:23] Mark Errichiello: all the, all the furnishings and inclusions I take with a grain of salt as a bonus. If we can purchase the property at where
[00:20:29] Mark Errichiello: I [00:20:30] value land, location, property type, and the fit out. ~Uh, ~and try and quantify that first where there's no
[00:20:36] Mark Errichiello: comparables. The designs, ~you know, they're, ~they're reasonable, nice floor [00:20:40] plans,~ uh,~ nice fit outs,~ good,~ good structure. But yes, with all those extra inclusions, I don't get too excited about them because they're gonna depreciate pretty
[00:20:48] Mark Errichiello: quickly. [00:20:50] Nice to have that, ~you know, ~if you want it all and gonna live in there or
[00:20:52] Mark Errichiello: rent it out, but I'm not gonna put a great deal of value on it myself.
[00:20:56] Veronica Morgan: Oh yeah.
[00:20:57] Veronica Morgan: So you pretty much price it as if they're empty.
[00:20:59] Mark Errichiello: Yeah, and, and
[00:20:59] Mark Errichiello: [00:21:00] put a little bit of cream where I'm saying, you know, some comparables for example, were
[00:21:05] Mark Errichiello: the 2.5 to 2.9.
[00:21:07] Mark Errichiello: ~If our, ~if our client was gonna go up to the three mil [00:21:10] or just over, then it's putting a little bit of cream on for all the extras you get. 'cause the depreciation schedules are provided with the contracts and you can see,
[00:21:18] Mark Errichiello: okay, if I was gonna buy all that [00:21:20] now, that's probably what you pay at a retail value
[00:21:22] Mark Errichiello: for all of that, all that, stuff.
Personal Mission for Better Property DecisionsPersonal Mission for Better Property Decisions
---
[00:21:24] Speaker 2: 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 [00:21:30] 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 [00:21:40] 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?
[00:21:49] Speaker 2: Or the other way [00:21:50] 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. And there you'll find resources for [00:22:00] 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.
[00:22:09] Speaker 2: [00:22:10] 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 [00:22:20] 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.
[00:22:28] Speaker 3: Please go to cove.com [00:22:30] au to reach out.
Impact of Victoria's Land Tax Changes
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[00:22:31] Chris Bates: Mark, do you think the, um, Victoria right and. Victoria changes rules around land tax, I mean the block's also buying these things, [00:22:40] um, ahead,
[00:22:41] Mark Errichiello: Yeah. They take a
[00:22:42] Chris Bates: and they're got have, Yeah. and they're probably doing it years in advance. I don't, I dunno, I haven't looked at this stuff, but I'm sure they're buying, you know, this the 2026 site, you know, 20, [00:22:50] 22, 23, like, you know, there there's
[00:22:52] Veronica Morgan: They're not panicking and buying 2026 now.
[00:22:54] Chris Bates: Yeah, that's right.
[00:22:55] Chris Bates: And so like, there's been a massive change down in Victoria with land tax around and that [00:23:00] absolutely makes it much. For your, your second homes, right. You see the Mornington Peninsula, like it's absolutely much tougher market down there than it [00:23:10] says in the, you know, the first home market rather than the second home market.
[00:23:12] Chris Bates: Do you think that's also shot channel nine in the foot a little bit. That, um, they, they, they're basically rules out a lot of second holiday [00:23:20] home buyers just because land tax has just gone up
[00:23:22] Mark Errichiello: yeah. the sentiment changing in that time when you are buying? I think in the past I, wasn't ever involved in the acquisition side. ~Uh, ~there's been people [00:23:30] that have been more
[00:23:30] Mark Errichiello: close to that,
[00:23:31] Mark Errichiello: but,~ uh,~ if they're buying two years out ~and, ~and Melbourne's had a volatile market for a few years, we're just seeing some daylight now.
[00:23:38] Mark Errichiello: And some improvement,~ uh,~ right. But [00:23:40] you've got the vacant land tax on vacant sites as well, so
[00:23:43] Mark Errichiello: the
[00:23:43] Mark Errichiello: one they've
[00:23:43] Mark Errichiello: year's season,~ uh, there's, ~there's risks there. And ~that's, ~that's why developers do put out a bit of risk ~and, and, ~and, ~you know, ~vendors that are [00:23:50] looking to,
[00:23:50] Mark Errichiello: ~uh,~
[00:23:50] Mark Errichiello: ~you know, ~rebuild ~and, ~
[00:23:51] Mark Errichiello: and resell.
[00:23:52] Mark Errichiello: So ~it it is ~it is something to consider in what the expected. Purchase price needs to be, but their circumstance and the [00:24:00] contestant's circumstance
[00:24:01] Mark Errichiello: without wanting
[00:24:01] Mark Errichiello: to seem,~ uh,~ crude ~or, ~or rude, it's not our concern. It's not our purchaser's concern. We're gonna look at the best market value
[00:24:08] Mark Errichiello: and opportunity for our [00:24:10] purchaser on the day.
Strategies and Missteps in Property Auctions
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[00:24:11] Veronica Morgan: I mean, over the years that you've been watching the block,~ um,~ what would you say has been the biggest strategic moves or missteps you've noticed from the agents and the buyer's advocates along the [00:24:20] way?
[00:24:20] Mark Errichiello: I
[00:24:20] Mark Errichiello: wouldn't say moves in specific,~ um,~ seasons, but I think points
[00:24:25] Mark Errichiello: mentioned before that some advocates in the past had gone in hot and heavy. Maybe they got caught [00:24:30] up in the moment and the excitement and if the clients. Did have ~big, ~big pockets,~ uh,~ to just go for it and make sure they, they won quickly and push buyers
[00:24:38] Mark Errichiello: back. ~Uh, ~I think [00:24:40] even this season, some advocates in the room, I noticed that didn't bid at all
[00:24:44] Mark Errichiello: as well. It probably started to calm down a little bit
[00:24:47] Mark Errichiello: ~and, ~and approach things with a bit more level
[00:24:49] Mark Errichiello: head. ~Um, you know, ~[00:24:50] no one was going too crazy. It was, ~you know, uh, ~there's maybe a two horse race on the first one going a bit hard, but that after that
[00:24:56] Mark Errichiello: it was,~ uh,~ pretty cool and calm.
The Role of Buyer's Agents on The Block
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[00:24:58] Chris Bates: I mean, there have been those buyer's agents, right? They've [00:25:00] probably got the marketing benefit
[00:25:01] Mark Errichiello: Yes. Yes.
[00:25:02] Chris Bates: I'm not gonna say who, and you know, it doesn't take a rocket sciences to figure it out, but I don't know if it's really, it's not when buyer's agents say, I could buy fast. I could buy a [00:25:10] lot off market.
[00:25:10] Chris Bates: it's like, you gotta be careful. You get your pitch right for the right type of, customer. I don't
[00:25:15] Mark Errichiello: Yeah.
[00:25:15] Chris Bates: being a, a block buyer's agent is the best marketing strategy. I dunno what you think [00:25:20] about that, mark, but I mean, obviously you've gone on the show, but. you know, attaching yourself to a show like that? Because it's not really reality of, um, and obviously the best, you know, opportunity. Out of 11 million dwellings [00:25:30] we've got in the country, I, I think you can find better value for money.
[00:25:32] Mark Errichiello: Yeah, and,~ and, you, you, ~you're
[00:25:33] Mark Errichiello: right,~ um, you know, ~there's a lot of buzzwords going around in advocacy and it's not always the best deal or the best strategy, ~you know, to, ~to sort of pin [00:25:40] yourself against. ~Uh, and, ~and even with the
[00:25:42] Mark Errichiello: block, ~you know, ~If I'm called upon and I think it's right and I'll give my advice and act,
[00:25:46] Mark Errichiello: but it's not something I,
[00:25:48] Mark Errichiello: ~you know, ~went out chasing.
[00:25:49] Mark Errichiello: It was very, you know,[00:25:50]
[00:25:50] Mark Errichiello: especially the first time, it was a very fun experience. With Adrian Portelli,~ uh,~ last year. I always like, ~you know, ~adopting a little bit of strategy
[00:25:57] Mark Errichiello: and, ~and that's, ~that's fun to execute, but [00:26:00] it's,
[00:26:00] Mark Errichiello: ~you know, not, not, ~not the prices. I would say let's go out and shop and be happy spending.
[00:26:04] Veronica Morgan: it is an interesting thing because, ~you know, ~they pitch the buyer's advocates, ~you know, ~almost like show [00:26:10] ponies, you know, almost like we just sort of, ~you know, ~I guess they've always had buyer's advocates go through and critique the properties, ~you know, ~through the years.
[00:26:16] Veronica Morgan: And so give them some good advice in terms of what buyers want and all [00:26:20] the rest of it. But when it comes to the actual auctions. ~You know, ~there's all that drama of calling ~the, ~the client ~when, ~you know when it's not at reserve and you're calling the client and pressuring them 'cause somebody else has got a [00:26:30] high bid.
[00:26:30] Veronica Morgan: And it's all that sort of stuff. That theater of that, that bothers me and really concerns me because I certainly do not do that when I'm bidding at auction for a client. ~You know? ~And that's one of the reasons I [00:26:40] don't, I can't watch the block auctions actually, because there's that theatrics that I really can't, I can't stomach really.
[00:26:45] Veronica Morgan: ~it ~
[00:26:45] Mark Errichiello: I agree. I agree totally. ~I, ~I refuse even with client, [00:26:50] and it would really need to be, say, a client that hasn't been totally upfront with their budget and they, you know, that ~we, ~we've exceeded
[00:26:57] Mark Errichiello: a price that I said I want to tap out, and [00:27:00] they initially agreed to tap out at that I would ask for some privacy and go out and call.
[00:27:04] Mark Errichiello: But I, I, agree. We shouldn't be, discussing price or hesitating in the moment.
[00:27:09] Mark Errichiello: ~Uh, ~it actually [00:27:10] gives.
[00:27:10] Mark Errichiello: Other buyers more confidence. it sends out a signal that you're tapped out and it might be another thousand.
[00:27:15] Mark Errichiello: You're just pushing the market level
[00:27:17] Mark Errichiello: up, right? ~And, ~and the next, if you miss out on this one, [00:27:20] the next one you go for, you've set a new benchmark that's higher.
[00:27:22] Mark Errichiello: So you make a noose ~for, ~for your own neck.
Mark's Renovation Strategy for The Block
---
[00:27:24] Chris Bates: Mark, you've, um, watched the show so many times and where, where's the ones that, if you, if you were going on the block, [00:27:30] and you had to sort of renovate, how would you think about it? Like what would be like Mark's renovation strategy like, like if you had to sort of. Your block strategy, [00:27:40] how would you go about it?
[00:27:41] Mark Errichiello: ~you, you can ~
[00:27:41] Mark Errichiello: ~find, ~you can
[00:27:41] Mark Errichiello: find within
[00:27:41] Mark Errichiello: the
[00:27:42] Mark Errichiello: footprint that they design ~and, ~and provide to you as well. ~Uh, and, ~and, budgets,
[00:27:47] Mark Errichiello: ~uh, you, know, we've, ~we've
[00:27:47] Mark Errichiello: even jokes. With, uh, myself and my wife, [00:27:50] Michelle before if we went on
[00:27:51] Mark Errichiello: contestants, and she said she definitely would never go on any
[00:27:54] Mark Errichiello: co show with me because we all, we both, she's very fast and
[00:27:58] Mark Errichiello: sort of almost like an engineer [00:28:00] mindset, and ~I'm, ~I'm, more of a dreamer, right?
[00:28:02] Mark Errichiello: So I'd probably blow the budget out completely, especially when it's not my money that I'm playing with. Right. So, so when I'm given a budget, but [00:28:10] I'd try to stay,~ uh,~ quite neutral ~and and, ~and play with the floor plan or redesign it where I can to be,~ uh, uh, ~appealing for,~ uh,~ a, broader market. ~uh, ~and where we can get access to [00:28:20] a few of the toys and, ~you know, ~
[00:28:21] Mark Errichiello: they've got these, ~you know, ~huge vintech fridges that come up as prizes and things like that. ~I, ~I really like, some of them go in with ~like a, a ~a theme like this year,~ the, the, ~the [00:28:30] one
[00:28:30] Mark Errichiello: that did actually get the highest price, first off, they had like a wellness theme and so all the extra products they got were the day spa things, like things you can buy. But if I'm gonna spend [00:28:40] extra on those products. Actually works well in a property. but most of the stuff's, the new materials that you get access to, I reckon they'd get a limited range of materials to, choose from, from, all the [00:28:50] providers and sponsors. So you're gonna have a limited range of what you can do
[00:28:53] Chris Bates: Yeah. I mean the key things right is your, is your market, right? Like it's, it's, it's, that's a, that's just so like buyer's agent in your [00:29:00] blood knowing exactly who you're selling to, making sure it's the market's actually got cash and he is actually willing to emotionally invest, right? I think that I. I mean, the themes are pretty [00:29:10] dangerous.
[00:29:10] Chris Bates: The themes are dangerous one though. 'cause you've gotta make sure it matches, right? Like you don't wanna do the theme that it looks cool, but it ultimately, people don't wanna pay a lot of money for it. And I think that's obviously blown up a [00:29:20] few people over the years~ ~
[00:29:20] Mark Errichiello: ~it ~it can, but I don't
[00:29:21] Mark Errichiello: know if it's a deal breaker when you Yes. When you're talking about The space and the footprint. When you're changing that too much as a theme that's dangerous, or the [00:29:30] cosmetics, there's a cost in that. But when it's furniture and we're just putting in gym equipment or couches, it's not a big deal to go crazier. And, ~you know, ~say that's a deal breaker. Someone can [00:29:40] sell that and put something else in. ~Um, ~I think
[00:29:42] Mark Errichiello: considering the market in the, location
[00:29:44] Mark Errichiello: is important, right? Because when you're going from Bayside right through to regional Victoria [00:29:50] and Highlands, it's a very different marketplace. So you've gotta consider that.
[00:29:52] Veronica Morgan: Yeah, you can get all your finishes wrong and the whole style of it, the, it just doesn't appeal ~to, ~to those local buyers. But one of [00:30:00] the other things that, ~ from,~ from block Auctions that I've washed over the years that they fight about and stress about is the order.
[00:30:06] Veronica Morgan: and I know when I'm, you know, when we are buying property at auction for clients and when the [00:30:10] in room's auctions, which is sort of what this is in a way,~ um, you know, ~I know the order matters because I know that the agents will structure the order of events in one of those auctions [00:30:20] based on how popular.
[00:30:22] Veronica Morgan: Or how well the auctions are gonna run. So they're not gonna, they're gonna wanna start it off strong. but they're not gonna use all their best ones early because they wanna keep people [00:30:30] in the room until the end, you know? So there's ~sort of where, ~where their property sits in the order is quite telling for us.
[00:30:35] Veronica Morgan: ~Um, ~but at the block it's a bit random, isn't it? ~They, ~they either win prizes to be first [00:30:40] off, ~you know, ~cab off the rank called last or whatever. Do you have any opinions as to how the order matters? Is it true that ~all the, ~all the best buyers basically go ~and, and ~and blow their [00:30:50] budgets on the first one, and then you've only got one buyer left by the end?
[00:30:53] Veronica Morgan: Or is it that some people do hold off for the better property and how do they assess
[00:30:58] Mark Errichiello: ~ for, um, ~I think if you've got your eye on a certain [00:31:00] property, you're gonna hold off
[00:31:01] Mark Errichiello: as a buyer. You're not gonna just buy, ~you know,~
[00:31:03] Mark Errichiello: the one that's first or second because of the order strategy.
[00:31:06] Mark Errichiello: in room
[00:31:06] Mark Errichiello: auctions that you talk about, I think it is very more,~ uh,~ much [00:31:10] more
[00:31:10] Mark Errichiello: important the structure because
[00:31:12] Mark Errichiello: you're not gonna.
[00:31:12] Mark Errichiello: have Say
[00:31:13] Mark Errichiello: five houses on the same street that are
[00:31:15] Mark Errichiello: similar,~ um,~ out of the group of 10 auctions that they're doing on
[00:31:17] Mark Errichiello: that day. Whereas ~with, ~with this [00:31:20] is certainly the similar properties. And then if there's a, you know, a crowd favorite that's been popular during the sales campaign. That going first is definitely, ~you know, it's ~it's [00:31:30] proven in the past ~that ~that's gonna take off, but the way they select it is different. they either get them to select it amongst themselves as contestants, the order, ~or they draw ~or they draw the order out of a [00:31:40] hat, which is pretty dangerous. As well. ~Um, this, ~but yeah, this, this year it was, ~you ~
[00:31:44] Mark Errichiello: ~know,~
[00:31:44] Mark Errichiello: even though the floor plans are all identical,~ uh, the ~the one that went off first was, ~you know, ~a aesthetically, I didn't [00:31:50] mind it.
[00:31:50] Mark Errichiello: I like the pitch roof. I like the hard materials.
[00:31:52] Mark Errichiello: I didn't mind the color scheme, but again, it's all very subjective. It depends on the buyer.
[00:31:57] Veronica Morgan: But there is a bit of fashion involved, isn't there?
[00:31:58] Veronica Morgan: So I guess there'd be [00:32:00] ones that you'd lean towards thinking, well, that's gonna be more competitive. And so if that's too early, then, or get that outta the way ~and then, and then, ~and then the buyers can't wait for that [00:32:10] one. I mean, there's, there's so many different ways, and I guess I know owners.
[00:32:13] Veronica Morgan: back when I was a sales agent, you would've had the same thing. An owner will be sitting there in the living room with the agent trying to work out, well, should I have a morning [00:32:20] auction or an afternoon auction? You know, like, uh, are there many buyers left in the afternoon? ~Or, you know, it's like, or, ~or do we have all the buyers hold off on their morning auction?
[00:32:27] Veronica Morgan: 'cause my property's better. There's all this sort of [00:32:30] trying to gain the system, but I'm not sure there's a real set, a proven strategy to
[00:32:35] Mark Errichiello: Yeah. And, and, and
[00:32:36] Mark Errichiello: in the regular market, if you are
[00:32:38] Mark Errichiello: going, ~you know, ~later [00:32:40] in the day and the similar property's gonna auction on the same day that
[00:32:43] Mark Errichiello: buyers are splitting between and they're going earlier, you do get stressed. Vendors do get very stressed,~ uh,~ Roger. But, [00:32:50] you know, in this scenario,~ uh,~ for example.
[00:32:52] Mark Errichiello: the property that got the highest price was in the center of all five. And it was a nice home, a nice little landscape. But personally, I'd [00:33:00] usually go for the
[00:33:00] Mark Errichiello: bookend. Something with a little bit more space, little bit more air and light
[00:33:04] Mark Errichiello: on the ends ~and, ~and you know, one of those passed in.
[00:33:06] Veronica Morgan: What do you think it was about the middle house though that made it so popular? ~Is it, ~cause it's all the [00:33:10] only, the outside was different really, wasn't it?
[00:33:12] Mark Errichiello: ~Uh, ~yeah, the exterior was
[00:33:13] Mark Errichiello: different. The interior floor plan was the same,~ but, but, ~but the, ~you know, um, ~cosmetic fit out was what the
[00:33:18] Mark Errichiello: contestants selected. [00:33:20] wellness.
[00:33:20] Veronica Morgan: The wellness
[00:33:21] Mark Errichiello: Landscaping was different. So that was all designed differently, but that can be changed all the, you know, with money. But that can all be changed. Could it have been,
[00:33:29] Mark Errichiello: ~and ~and [00:33:30] this is in hindsight,
[00:33:31] Mark Errichiello: that the buyers went well over
[00:33:34] Mark Errichiello: budget expecting that it was the first one. They weren't sure
[00:33:37] Mark Errichiello: it didn't seem like it was too high over the quote range. [00:33:40] And that's dangerous thinking that agents are quoting fairly or under quoting and not doing your homework. ~And, ~and they had a little bit of competition. It was the first cab off the rank, there was a
[00:33:48] Mark Errichiello: big buzz ~that, that, you know, if they're ~if they're not worried [00:33:50] about money and they've got big
[00:33:51] Mark Errichiello: wallets,~ uh,~ going an extra 200 k
[00:33:54] Mark Errichiello: over what they should or 400 K over,
[00:33:56] Mark Errichiello: sometimes they look at in hindsight, as a, as an education [00:34:00] cost.
[00:34:00] Veronica Morgan: Yeah. How do you reckon those buyers would think, you know, like, you know, given the two that passed in, I wonder how the other three
[00:34:05] Veronica Morgan: maybe felt that they had gotta bit exuberant.
[00:34:08] Mark Errichiello: ~I, I, ~
[00:34:08] Mark Errichiello: I'm sure
[00:34:08] Mark Errichiello: on the day they were,
[00:34:09] Mark Errichiello: ~um,~ [00:34:10] crapping themselves thinking maybe we did go a little bit hot and heavy. ~but, ~
[00:34:12] Mark Errichiello: but,~ um,~ I don't know what their
[00:34:13] Mark Errichiello: purpose was for the property. I don't know who the particular buyers are
[00:34:17] Veronica Morgan: So you didn't chat to anybody? You didn't talk to them and
[00:34:19] Mark Errichiello: [00:34:20] we chat, but on the day, I don't think anyone's got any definite Answers, ~you know?~
[00:34:24] Mark Errichiello: Yeah. As far as, ~you know, what, ~what they can share.
[00:34:26] Mark Errichiello: So, ~you know, ~if it's gonna be occupied as a getaway or Airbnb, [00:34:30] like that's possible. ~Um, ~but again, I think the ones that were competing in that moment went a bit hard.
Melbourne's Real Estate Sentiment and Trends
---
[00:34:34] Chris Bates: I've gotta ask you, mark, um, I wasn't gonna go, but I, I'm just interested on your take [00:34:40] on the Melbourne market. I mean. And I mean that obviously it's just happened to block as well. I mean, I want to, I'm just outta my curiosity. How are you seeing things? I mean, it's, it's been tough [00:34:50] down there last few years.
[00:34:51] Chris Bates: I mean, it's obviously underperforming other parts of the country, but, you know, the fundamentals, it's still a great city. And, you know, it'd be interesting to see where you feel it is in the cycle right now and, what you're seeing [00:35:00] on the ground.
[00:35:00] Mark Errichiello: Yeah,~ it, it, uh. ~Definitely a little bit
[00:35:02] Mark Errichiello: more positive as far as sentiment goes in certain price ranges and certain
[00:35:06] Mark Errichiello: pockets. So I deal personally around the [00:35:10] northwest quite a bit in the northern and western suburbs and ~you know, ~had a big exodus of people leaving, ~you know, ~owner occupies, leaving the state post COVID. Then we got hit with all the [00:35:20] interest. ~Um, ~rises ~and, ~and regulations, heavy regulations on
[00:35:22] Mark Errichiello: rental, big exodus of investors. So,
[00:35:25] Mark Errichiello: you know, close to 30% gone. Now I talk to agents, first home [00:35:30] buyers and investors flying in,~ uh,~ buying up property under 1.5. Mainly almost every, ~you know, ~two outta three properties.
[00:35:36] Mark Errichiello: There's some competition from interstate investors, say Sydney, [00:35:40] Queensland, wa, that are looking at growth opportunity and seeing the, ~you know, ~regulation and,~ uh,~ land tax and other. Costs as a cost of doing business,
[00:35:49] Mark Errichiello: [00:35:50] but they, it's a supply issue.
[00:35:52] Mark Errichiello: ~You know, ~we've got low supply. There's the brink of, ~you know, ~some fair capital growth ahead in Melbourne, It's looking a little bit more positive.
[00:35:59] Mark Errichiello: [00:36:00] And, ~you know, ~
[00:36:00] Mark Errichiello: first home buyers are getting these untapped,~ uh,~ sort of, you know, access to incentives, ~you know, not ~not driven by ~their ~their means testing with income and household income. So ~they're, ~they're fighting pretty hard in [00:36:10] that budget that I mentioned,~ Uh,~ and without extra supply, I think it's a small wave of buyers that are gonna benefit and the rest are gonna have a higher market to compete with, ~you know, ~and there won't [00:36:20] be much affordable under a million dollars anymore. ~Uh, ~speaking to colleagues around the state that deal in the higher value areas like Southeast and Bayside, ~that ~that three, $4 million, ~you know, ~price [00:36:30] range and above. Some are going fairly quickly,~ like, you know, ~quickly, before they're listed and some still selling above,
[00:36:36] Mark Errichiello: ~uh, uh, ~budget expectations.
[00:36:38] Mark Errichiello: But again, there's, ~you know, ~then [00:36:40] that some that patchy and, you know, still pass in.
[00:36:42] Mark Errichiello: So, you know, one saying that, someone said to me once, it's harder to pick than a broken nose, but ~I think, ~I think
[00:36:48] Mark Errichiello: the next. Six months. [00:36:50] The next six months will be
[00:36:51] Mark Errichiello: t, you know, into the February market as well.
[00:36:53] Chris Bates: So lemme just take the read on that. So the Sub 1 million market, um, super competitive, right?
[00:36:59] Mark Errichiello: Even 1.5.
[00:36:59] Chris Bates: [00:37:00] know, first time buyers and investors all trying to wi ride the wave of increasing demand and whether, whether the first time buyers doing it or whether the investors playing the first time buyer and just [00:37:10] playing the, the 800 to seven hundreds I.
[00:37:13] Chris Bates: But are you seeing in that one to 1.5 range as well? A bit of investors? 'cause that's, that's interesting because [00:37:20] you know that that is a different, part of the market and you're not so much playing the 5% deposit scheme 'cause it caps out about a mill.
[00:37:26] Mark Errichiello: Yes.
[00:37:26] Mark Errichiello: So
[00:37:26] Mark Errichiello: you're not.
[00:37:27] Chris Bates: you're playing more, the greater [00:37:30] market and the holding costs are much bigger.
[00:37:32] Chris Bates: Right. Because Melbourne yields are a little bit lower, so you're still seeing a bit of interstate, which hasn't probably happened for a good five plus years down~ ~
[00:37:39] Mark Errichiello: ~Exactly,~
[00:37:39] Mark Errichiello: exactly. ~There's a ~there's ~a welcome, ~[00:37:40] a welcome,
[00:37:40] Mark Errichiello: ~um, uh, you know, ~fresh introduction in the last three months, mainly in the
[00:37:43] Mark Errichiello: la ~you know, ~it was a pretty strong September quarter, but it's now just
[00:37:46] Mark Errichiello: catching up on the loss of investment properties to bring that supply [00:37:50] back. ~You know, ~'cause you've got the housing crisis
[00:37:51] Mark Errichiello: and rental crisis. ~Uh, you know, ~driving pressure in the rental market and yields rising,
[00:37:55] Mark Errichiello: They'll start to balance out in the
[00:37:56] Mark Errichiello: next 12 months. 'cause I see what I could [00:38:00] buy for 850 to a million. Now it's already nine
[00:38:02] Mark Errichiello: 50 to 1,000,050 in the last six months. Right. And so, so that's, that's, that, that crushes your yields a little bit in the short [00:38:10] term.
[00:38:10] Mark Errichiello: ~Uh, ~but the yeah, every, everything will still get
[00:38:12] Mark Errichiello: growth ~The, ~the ones that I
[00:38:13] Mark Errichiello: mentioned going in that 1.5 million, some of them are even second time investors. Looking to take advantage [00:38:20] of, ~the, ~the
[00:38:20] Mark Errichiello: land and town planning incentives even to see where they can get opportunity to put a second dwelling on, or a granny flat you opportunity to boost the income, ~you know, ~knowing that they've got
[00:38:29] Mark Errichiello: a fair bit ~on the one, ~on [00:38:30] the one title, but get two dwellings as a long term
[00:38:32] Mark Errichiello: agenda so that ~they're, ~they're a little bit more well healed, and they're going, you know, they've benefited in the last decade from investing [00:38:40] Well.
[00:38:40] Chris Bates: Mark, can you finish this off with a property Dumbo here.~ ~
A Memorable Client Story
---
[00:38:42] Chris Bates: ~Mark, can you finish this off with a property Dumbo here. ~
[00:38:42] Mark Errichiello: ~you might need to enlighten me a little bit more ~
[00:38:42] Mark Errichiello: ~and give me, gimme, gimme some Some, confidence. ~
[00:38:42] Veronica Morgan: ~oh, I forgot to prep you, mark. Uh, uh, Uh, it's, a, little, Um, ~
[00:38:42] Mark Errichiello: ~I've, I've, ~Oh, look, I've, made plenty of mistakes over the years and then also, ~you know, interesting, ~interesting clients. ~Um, uh, you know, if, ~if I'm going back [00:38:50] even, interesting client, I had actually one of my first clients that was a sales. A sales,~ uh,~ agent and
[00:38:55] Mark Errichiello: ~I, ~I was a sales agent at the time and it was one of the clients that triggered me into being a buys agent by [00:39:00] representing him. he'd be past, well past,
[00:39:02] Mark Errichiello: now, but he was already 95 years of age, back around early 2000 period. ~Ex ~
[00:39:07] Mark Errichiello: ex, uh, horse trainer. ~uh, ~lost [00:39:10] his leg in a traumatic accident at a young age. You know, I had been a criminal at some parts of his life as well. Just an interesting story. But, ~you know, he, ~every time I came to visit him, he'd always make sure [00:39:20] that I bought him a cask wine and sit down with him
[00:39:22] Mark Errichiello: and talk.
[00:39:22] Mark Errichiello: But,~ uh, you know, ~one day I forgot
[00:39:24] Mark Errichiello: to say my name when I knocked on the door,~ uh, to, ~to visit him and have a chat, and he pulled a shotgun out the [00:39:30] window,
[00:39:30] Mark Errichiello: ~Um, ~and I had to dive to
[00:39:30] Mark Errichiello: hide this car, so I was in my, I was in my twenties, but, uh, it was always, always, a good idea to ring ahead, especially when, ~you know, ~we deal with people of all walks of life
[00:39:38] Mark Errichiello: and. different [00:39:40] mental states.
[00:39:40] Mark Errichiello: So yeah. Yeah, ~that was, ~that was what?
[00:39:42] Veronica Morgan: this is the guy that convinced you to become a buyer's agent. That's hilarious.
[00:39:45] Mark Errichiello: After that. After that we formed
[00:39:47] Mark Errichiello: quite a
[00:39:48] Mark Errichiello: strong bond. ~and ~and ~you know, ~my wife
[00:39:49] Mark Errichiello: [00:39:50] Michelle had a traumatic accident, so we related
[00:39:52] Mark Errichiello: there, but that was actually just months before
[00:39:55] Mark Errichiello: Michelle ~had a, ~had a ~um, ~a workplace. accident. So. He reached out after that and we became [00:40:00] quite close,
[00:40:01] Mark Errichiello: ~um, ~to the point where
[00:40:02] Mark Errichiello: he dropped some of the people that were acting as his power of attorney and asked me to step in and help him buy a home to [00:40:10] downsize into. So he became my first advocacy client, and I liaise with
[00:40:13] Mark Errichiello: his powers of attorney, but we became good mates.
[00:40:16] Mark Errichiello: ~Um, ~
[00:40:16] Mark Errichiello: so yeah,~ his,~ his name was Bill McMullen. ~Strong, ~Strong, character. Strong [00:40:20] character.
[00:40:20] Veronica Morgan: Well, I can honestly say I've never had a gun pulled on me in my line of work, and I hope that I can go to my dying days without ever be able to say I'd had a gun pulled on me. So
[00:40:29] Mark Errichiello: This was, [00:40:30] this was Whiskey Whiskey Hill in Flemington.
[00:40:32] Mark Errichiello: So near Flemington Race course. It's a, it is got a ~strong ~
[00:40:34] Mark Errichiello: strong underworld history, so yeah.
[00:40:37] Veronica Morgan: some characters. Mark,
Concluding Thoughts and Insights
---
[00:40:39] Veronica Morgan: thanks for [00:40:40] coming along. We just, it was good to get a little bit of insight, the background of the block. A little bit more of a lighthearted episode for us. But,~ uh,~ there's some really good, strategic gems in there, really, about how we should be looking at [00:40:50] auction ~and, ~and assessing properties before we go to auctions as well.
[00:40:52] Veronica Morgan: So it's been
[00:40:52] Veronica Morgan: great chatting with you.
[00:40:53] Mark Errichiello: Oh, lovely. It's
[00:40:54] Mark Errichiello: been great. Great chatting. Thanks Veronica and Chris. Yeah. Love being here.
[00:40:57] Chris Bates: Enjoy the chat
[00:40:58] Mark Errichiello: Yes. Yeah, definitely. It's great.
[00:40:59] Speaker 7: [00:41:00] 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. [00:41:10] Or you can email us directly at questions at the elephant in the room.com
[00:41:15] Speaker 7: au.
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