CRE Success: The Podcast, S01E08
paul tzamalis, the auction company
auction, auctioneer, people, real estate, agent, vendor, commercial real estate, buyers, property, business, podcast, paul, selling, success, piece, speak, bidding, question, melbourne
Welcome to CRE Success: The Podcast, where we help people working in commercial real estate achieve their professional goals. Check us out online at cresuccess.co/podcast. And now here's your host, Darren Krakowiak.
Hello, and welcome to episode eight of the podcast which is made especially for people who work in commercial real estate.
Today I'm speaking to Paul Tzamalis who is the director and owner of The Auction Company. Paul transitioned from being a commercial real estate agent to specializing in auctioneering just a couple of years ago. I invited him to be my guest because he still works in the sector and I knew that he would have a unique and informed perspective to share about what it takes to be successful in our industry. I'm really excited to share this interview with you because I'm sure you're going to quickly hear Paul's genuine passion for his craft. And you'll also be able to glean something from the professional way that he prepares for each and every auction that he conducts.
Before we jump into the interview, a quick note to say thank you to our listeners in New Zealand, because New Zealand is the eighth country in Asia Pacific where we have hit the top 20 in the Apple Podcasts Careers Charts. Coincidentally, we peaked at number eight in the charts there.
If you enjoy our podcast and you think we're delivering value, maybe you can do me a favor and tell two people that you know about the show. I would love to be able to spread the message of our guests to even more people.
Speaking of our guests, the interview with Paul Tzamalis starts in 30 seconds.
And now it's time for the interview on CRE Success: The Podcast.
Paul, welcome to CRE Success: The Podcast.
Thank you very much Darren. Thanks for having me.
Paul, the first thing we do is we step into the virtual elevator and we want to hear your elevator pitch so you can tell us who you are. So Paul, who are you?
I’m a young man born in Doncaster, Melbourne's Eastern Suburbs, grew up a Greek background, professionally, graduated as a science graduate out of Monash University, and then went on to step into the real estate industry, which was a foreign path for me, but started my career at CBRE in 2012, and just over six years later, went out and started The Auction Company, which is a passion business for me and everyone always says, You should always follow what you love and be the best at it. And that's certainly where I sit at the moment. So happily running The Auction Company, 52 real estate agents that currently utilize us and our service and a very happy man.
Before we get into a bit more about your business, I just want to ask you about auctions because they're very common here in Melbourne, but not so common in other jurisdictions for the sale of real estate. So for our listeners who are not so familiar with auctions, can you just explain for us how does it differ from other sales processes?
Auction as a process, you know, well, before it was even a process for real estate, was always a way to have a buyer and have a seller attribute a value to a item/product. And that continues to be the reason why auction is a great way to sell. How it differs to other processes, ie a private tender expression of interest campaign, private sale, private treaty, depending on how you say it; it's transparent, you know, and quite often, we do want a transparent negotiation. Other times we want something private and we want an exclusive opportunity to buy something, but the reason people use it is it's a great way to bring a sale transaction to a head by a set date. It enables people every opportunity to put their best foot forward to buy it. And, you know, in every which way, gives the opportunity in a transparent way to bring vendor and buyer together at a time to negotiate a price that is happy for both parties to transact.
What was the main catalyst that led you to move from being a real estate agent and then establishing yourself as an auctioneer?
Certainly wasn't a easy process Darren. I was listing and selling real estate as an agent for at least two and a half years before I even stepped out as an auctioneer. In high school, I tried my hand at singing and you know, performance with a group of friends. And you know, we did that for a bit of fun. I didn't carry that through to my real estate career until two and a half years in, and it wasn't until I was pushed in a really positive way by my colleague and mentor Scott Orchard, that was working at CBRE at the time and he was an avid auctioneer was an auctioneer for the business and Australasian competitor and winner at the time, who said to me, you know, just go out and give it a go. And you know, I did I was scared, did I do it perfectly, definitely not. And there was a lot to take out of that first experience. But once I stepped out there, I very quickly realized the benefit of, you know, being an auctioneer and being an agent, all in one, given that you control a part of that process. And you could certainly elevate your branding your, your personal brand in the marketplace as an agent by being an auctioneer as well.
So what are the skills that are required to be an effective auctioneer? And how do those differ from the skills required to be an effective agent?
Auctioneering has a performance element to it, an entertainment element to it. And now we look at real estate as a relatively dry business where it's transactional. It's financially orientated, you know, the entertainment and the performance piece, you know, is a really big part of it, and you know, to the point that you're making the comparison to being an agent and an auctioneer, Darren, that's why I actually started doing more auctions, I started realizing that that's what I loved. I really enjoyed the transactional piece of real estate, but you know, combining it with the entertainment, combining it with the presenter piece, and then I started realizing that to be better at this, you know, something had to give along the way. And, I started weaning off wanting to be an agent and wanting to be more of an auctioneer. And the more I started to do that, I started realizing, how deep the pool of skill set was to be a good auctioneer. And the same can be applied to something which we all know and we all enjoy, which is we see actors, we see performers on stage, that skill set, that ability to be good at what they do is not borne out of, hey, they do another job at the same time. They do that so well because they focus on it. They work on that skill set, they work on their ability to project their voice, they work on their ability in their body language to animate in front of a crowd. They work on the ability to engage with the crowd as well, and all these things, albeit what I've mentioned a very small part of what we do, you need to continue to finesse that. And even now, just over six years of auctioneering, I'm continuing to get feedback and I continue to critique myself and say, it's just not good enough, there's always a little bit more that you can be doing to be better.
So speaking about the performance element and Melbourne, being the auction capital of Australia, there's a lot of I guess, big personalities who are auctioneers. How do you actually distinguish yourself from others in the market?
First step is actually do it the way I need to do it, for who Paul is. I think it's really easy, in anything that we do in life, when you look at mentors, when you look at trainers, when you look at others that are doing it, to take what they do and try to do what they do. But you sort of get lost you lose your personality, you lose who you are in what you do as a craft. And, I've been grateful to have some good mentors and trainers, my colleagues at CBRE that pushed for excellence in their own rights, Phil as a trainer, Luke Banitsiotis another competitive auctioneer in the in the auction competition, which is another element to it all together, you know, that have challenged me in different ways. But one thing I've held on to is, who Paul is and how does Paul want to do it? And that's really a big piece of not competing with others, but having a light shone on you or, you know, people commenting and saying, hey you do that, well, well, you're doing it well, because you're doing it in your own skin, not because you're trying to be in somebody else's skin.
You've mentioned the auction competition a couple of times. And can you tell me a little bit about that? Just how often it is and how competitive it is between yourself and the other auctioneers?
Yeah, I'm relatively new to it. I formed a view, like many even when I was an agent, practicing as listing and selling, as an auctioneer, that you know, what's the value in it? You know, it's not a street auction. So why do it? But you know, I gave it a go four years ago, took a year off and then I've done with the last two years and got to the Australasian competition last year, and bowed out very early in that competition mind you. But the learning curve is, you know, you're presenting to a different crowd. And what I mean by different crowd is, you know, they're still mums and dads, they're still family is still friends, they're still colleagues in the industry. However, they're critiquing what you're doing, you know, in the street sometimes you get away with what you're doing because of the outcome because you do sell it under the hammer. But no one really spends time, particularly in a good market and what we've seen to be a very buoyant market and racing is people taking the time to actually critique what you do because we focus on the outcome of the process. We focus on the fact that everyone's selling under the hammer. We're all selling above reserve, but how much of that is actually due to the skill set of what you're doing versus the drive and the buoyancy of the marketplace? The fact that there is a lot of demand. But getting back to your question, I do apologize for going off course there, the competition, you know, it's a bit of a magnifying glass for the skill. You know, are you presenting yourself well are you are you presenting and look and feel you know, you dress to the part. Are you telling a story? Are you animated. Are you creative? Are you taking what is and everyday property and, you know, putting a bit of a story about it and a unique story. And what that's actually done is, the challenge of having to present that element through my competition auctioneering, has then challenged me to prepare better on the street, because even myself, you know, I take it for granted even to this day that when you do have enough auctions on, you don't prepare enough, you know, you review a contract and vendor statement and for me, that's just a non-negotiable you have to do that with every single auction, and I definitely do that. But on top of that, are you warming up your voice every morning? Are you not having a glass of alcohol, it might bema glass of wine on a Friday evening, because that directly, that dehydrates you for the next day where you need to hydrate, and even from the competition perspective, you know, writing it writing your spiel out and creating a story creating a narrative for that property that's unique to that property that's unique to that vendor that then can translate into the crowd that creates an emotion and creates a story that buyers and investors in the crowd can relate to, and then bid on that journey. And, you know, to give you an example of how powerful that preparation piece can be. And I've learned that from my competition, because I never really did it that much. It was someone that came up to me and said, Hey, you told me something today that I didn't actually know after reviewing documentation, and having inspected this property in the last four weeks. And that was really important, and it's like as auctioneers, what are we telling the crowd that they didn't already know?
You mentioned there, you know, reviewing the contracts, and so forth. And I'm curious to know, when does an auctioneer typically get involved in the sales process?
There be a number of responses to that. You know, my response to that is I used to, very early on, just turn up for an auction and review the documentation. But I started to realize that how can you conduct such an important role in a transaction or not have met the owner or not have been introduced to the owner? Still to this day, some agents elect not to introduce me to their clients before auction date, even though, you know, our service provides that and I want to do that, I think it's a non-negotiable. Traditionally, an auctioneer has been someone who turns up on the day, and I still get asked the question as recently as last week: what's your fee just to turn up on the day? And there's a bit of a conflict, you know, in that conversation about, it's one thing to be a good presenter, but it's also one, you've also got to continue to be a salesman on the day, and how do you sell a property that you haven't really gone on the journey with the agent and vendor for in the past two, three or four week? Most and some will argue, well, you don't need to do that. I argue that, you know, a simple phone call, which is what I do with some of my longstanding clients once a week to understand what buyers are saying to understand what the vendor was saying, a vendor meeting the week of the auction to actually sit down with the vendor and sit down with the agent to understand exactly what the strengths, the weaknesses of the property are. You know what’s motivating the vendor to sell what's motivating the buyers to do and who their buyers are, and why they're buying it, can culminate in a much better performance and a much better delivery, which directly relates to the way in which you navigate the auction and the way you speak to certain buyers because you've got a much better understanding of who they are and what they're there to do.
So the concept of the auctioneer being a hired gun is not a myth for some auctioneers, but your philosophy is that it's better to get involved as early in the process as possible.
Well, you know, if we, if we funnily relate a hired gun concept into the discussion; a hired gun in other scenarios, and the way we relate it to the old gangster movies, or hired gun will still do their research or hired gun will still be involved. They'll still, you know, ask questions, they'll still get information from the person to tide them in order to prepare accordingly, to do the job right. And there is a piece of what we do in real estate and auctioneering where you still have people turning up on the day that haven't asked the relevant questions to understand exactly who is bidding, why they're bidding, to understand who the vendor is, why are they selling on the day, to best navigate that piece of the equation, you are sitting in the middle: of vendor/agent and buyer. And if you can't understand what the motivations are on both sides, and also understand, you know, the fundamental elements of a contract and a vendor statement, and I hate to say this, but not everyone's reviewing a contract and vendor statement, including agents, then how do you expect to conduct a transaction, you know, in real estate, and I don't know whether it's we don't think it's important? Have we lost the element of importance? Is it because it's, you know, you don't have to be licensed to do it, and there's no rule requirement or rule push to impose that that training on an auctioneer to review every detail of a contract and vendor statement. I don't know, Darren, I can only speak of the experience that I've gone through and the mistakes that I've made that have led me to, you know, have that importance on that process and that service.
So what about the difference between a residential property and a commercial property? How does that differ in terms of the role of the auctioneer, and also how the auction plays out?
I don't think the process to prepare for auctions should be any different for residential or commercial. The level of service that you provide should still be the same. That being said, if you're selling a shopping center that has a supermarket anchor and 15 specialty stores, there's a degree of detail and more information that's required as an auctioneer and to get a better understanding for what they're selling. And that comes hand in hand with working with the appointed estate agent and their vendor, to help better understand what the property is and how to sell it. Verse a, a home that may have a single tenant and may have just be one property on a title. You know, there is a differing degree of how much you need to know, in order to sell that property. But you also get an in commercial, you might get a free standing, shop and dwelling, which might be a commercial shop in a strip with a dwelling above it. And that might be vacant. And that also has a lesser degree to understand, but you still need to do the research, you still need to understand where you are, what it is that you're selling, what's the last one that sold? You know, how does that compare to the last two or three sales? You know, and who's buying it, is it an owner occupier? Are they motivated by the same emotions in residential? Because they want to put their business in there? And is it the same emotional heartstrings. Legally, you still need to read out the auction rules on the day, you still need to prepare the auction, you still may have auction rules on display 30 minutes prior. So legally, the legal framework surrounding those properties doesn't really change, outside of the intricacies that may be associated with the property itself.
I'm sure one question that you get a lot, and one that will be running through the heads of our listeners is: what tips or advice do you have for bidders at an auction?
Well, you know, I myself, you know, having been a buyer and having been a seller would say there's a time to bid. There's not a time to bid. But bid, you know, it's, I've seen the last 12 months with the political election that happened at the start of 2019, how people stop taking…took their foot off the pedal and stop bidding at auction. And we're saying, well, we're forecasting, this is going to happen to the market. And then we saw the market return to great strength at the end of 2019. And everyone was competing again. You know, when people aren't competing, put your best foot forward and when people are competing, will still go and compete. You can only put your best foot forward at that point in time in order to try to acquire a piece of real estate, and if you've done your homework, then just try to do your best. You know, in trying to sort of create this scenario of best strategy, not to bid, I think it's a bit of a fallacy. Some would some would give you testimony of the fact that they've bought real estate by not bidding and negotiating afterwards. And that's fine. But I think there's a lot more that have missed out by not bidding at auction or not having put their best foot forward, because the reality is the process endorses and supports the highest bidder at auction. So why wouldn't you give yourself the opportunity to be the highest bidder, go and speak to the vendor, get a reserve price and negotiate exclusively, because that's the way the system is set up,
Got it, you got to be in it to win it.
Let's turn to the topic of success. What's one attribute that you think it's important to succeed in commercial real estate?
Persistence? Having, you know, having never been in real estate before having been an academic, you know, someone that went to university and was born off the household in teaching of you need to go and get a degree to support yourself and be successful in life in real estate was a rude awakening for me. There wasn't a book, you could pick up. The people around you: some are willing to give you a helping hand. But many of them have got their own businesses their own careers to run. And perhaps they haven't really been taught how to teach you either. Now, you know, you need to really persist, you really need to go out there and ask the question, the question, unless you're really, unless you've been put into a organization that has a very good structure, even then what you'll find is if you're not actually tapping on someone's shoulder and asking the question, and being persistent at doing that, the answers aren't going to be given to you. And in being persistent, you're going to make mistakes and you have to make mistakes. You have to learn you have to be you know, you have to be scolded by vendor, you have to be scolded by your peers, you have to be scolded by buyers. And I've made various mistakes in my career, some which have left you know, a bad taste in some vendors and buyers mouths and you know, relationships that might be that are probably difficult for me to mend and I openly say that. But those mistakes have made me learn what to do and what not to do, because there's really no checklist of how to run real estate. The other thing I'd add to that, Darren, is, you just got to be good. You got to respect people, you know, where we're selling real estate, you're dealing with people on both sides. So, to some extent, you need to remember that they're human beings, that they're people, they've got families, they've got emotions, you know, they're not robots, you need to treat them with a level of respect. Again, when you get busy, when you get tired, when you have your own stuff going on, you somewhat let that let that element go. And you speak to people in a certain way, you don't treat them with a level of respect. And again, you get you get reminded very, very quickly of what that behavior does, and how that treats people, and you get the feedback on it. And I hope that people get the feedback on it, because that's what you learn. If you don't learn from it. Well, you know, you go down a certain path, which you can only, you know, say is going to lead you down a path and then maybe, maybe no point of return, but there's always a place to learn something new.
Well, Paul, you're a relatively modest guy, but I know that in a short amount of time you've built up quite an impressive track record and list of clients and made an impact in a very competitive market, the Melbourne auction market so I'd like to ask you about what it is that you purposefully and regularly do that contributes to your own personal success.
I just tried to listen more, Darren, I got I got taught by a very good mentor of mine at CBRE, Mr. Mark Wizel, that we've got no and he was taught himself this that we are given two ears and one mouth for a reason. And I've got two very big ears as I've been told since I was a young kid at school. So, you just got to listen. And when it comes to real estate, in general, we try to form a view on what things are going to do, we try to form a view of you know, what the markets doing. You know, we're going to keep it very simple in what we do as agents and auctioneers. We're just going to run a good process. You know, I can't control what the markets gonna do, but I can control how I prepare and how I present myself at auction in the best interest of my clients. How I present myself how I speak to them, you know, how we negotiate and those sorts of elements you can you can control. I can't control what the next six months has to hold, I can't control what's written in the papers. So we need to just really get back to basics. And when people call me up and say, Why should I choose you? Well, I try not to sort of convince them otherwise, other than to just invite them to an auction and come and make your own mind up, okay? It doesn't come from a position of desperation. If you'd like to work with me, then come and have a look at the auction. Let's actually meet each other. Let's get to know each other. It's a people business. The fact of the matter is, you're not going to work with everyone in this business. We'd like to think we will, but you're not.
I've used the analogy of the two ears and one mouth and it's taken me a while to really get my head around it and fully embrace it, but I love the way that you mentioned that your ears are big. I think in the past, my ears were small, and they are physically small, but maybe they've gotten bigger over time. So really, really good another layer of that, of that of that analogy, which I really enjoy you sharing there. Before you go, I want to hear about your podcast. Can you tell us about why you started it and what it is that you're looking to achieve with it?
I've never really had it on the hit list is something that I wanted to do. But I was blessed to have a very good advisor in Tom Andronas, The Content Engine, that's been doing all my media and marketing since the business was born. And, you know, the week the COVID hit, the discussions I was having with a lot of people in the network, and that included agents, vendors, family, even just professionals in real estate, you know, that I've associated with and continue to talk to, and we continue to bounce experiences off. I just said to myself, you know, how many calls and how many discussions can you have in a day before you start to sort of fry your brain and, you know, it was over a phone call with Tom that I said to him, how do we amplify the one or two discussions that we have per day to the masses? How much am I having a conversation with someone today that maybe someone else isn't and can that conversation help someone else and that's where the podcast was born. And that's why the you know, the name ‘a property perspective’, you know, the hammertime is obviously a young reflection of what we do every day. And it's just a bit of a corny, cool name. But a property perspective is exactly that, you know, who am I speaking to in real estate today that may have something valuable to share with me? And how can I share that with, you know, everybody else, because sometimes I think we get caught up in protecting our net…in our networks, we get pretty and we get very protective here in real estate. You know, we were very protective of vendors. You know, there are vendors, there are buyers, you know, there are networks, you know, it's a very selfish view. But how do we take that and turn it upside down and say, Well, no, I'm, I'm blessed that I've met this person on the journey that I've had in real estate, they've got a certain level of experience in their specialty, in their view, because of what they're doing in real estate. And if they're willing and obliging to talk about that view, well, how do I amplify that to the masses? How do I amplify that to my friends, my family, my colleagues, my, you know, my customers, my clients, and that might not directly be relevant to what I do every day which is auctioneering but it could directly relate to what they're doing in their personal businesses, in their families in their investments and the opportunities that they're seeing. So, for me, it's, it seems like it's something that's going to be sustainable for many years to come. And I'll do it the way that I want to do it, which is relaxed, no formalities, you know, we've got a relevant structure to it. But you know, we've got we've set it up in such a way now where I think we'll continue to do it, and we'll do it out way.
Now, you've mentioned hammer a couple of times. And the final thing I want to ask you is how come we don't always see hammers at auctions? Sometimes it just falls on the hand. When are we going to see hammers at auctions?
It's a really good question. I've used a hammer in the portfolio auctions. I don't know. I believe I can just say more with my hands and I come with a gavel…a hammer in my hand. It's one less piece of baggage that I'm carrying on auction day. I guess it's one less thing I have to think about. I don't know, I again, it's going back to what I said before, which is it's a personal touch. You know, some use it because they feel confident they love using it. And others don't because they feel they can do it in their own way without one. So there's no there's no hard and fast rule with it, Darren, I guess if someone said to me, Paul, we want you to be out there with a hammer. Well, I've got three of them in the closet and I'm happy to take one to use it.
There you go. Hammers available on request.
Paul Tzamalis, the podcast is called Hammertime: A Property Perspective. His company is The Auction Company in Melbourne. Paul, thanks so much for being here on CRE Success: The Podcast.
Darren, thank you very much. And I hope that there might be something in this for your listeners and they get something out of it. So, thank you very much for having me on the show.
For more information about our guest, visit cresuccess.co/podcast. And now a final thought from Darren Krakowiak.
I hope you enjoy today's interview with Paul. As I mentioned at the top of this episode, Paul's passion really comes through when you speak to him. Did you notice that he said persistence is the key to being successful in commercial real estate? He also talked about the importance of preparing for each and every auction that he conducts. Definitely Paul embodies The 5 P's of Commercial Real Estate Success, which are contained in my eBook: passion, persistence, positive thinking, preparation and professionalism.
Another interesting thing that Paul noted in the interview is that colleagues in the industry are not always forthcoming with offering help, even when people ask for it. He mentioned that this may be because they have their own careers and their own businesses to run, or perhaps they just don't know how it is that they can help others. I must say this is one reason why I set up CRE Success. I think there is a need to help up and coming professionals with mentoring, but also to coach existing leaders on how they can better help other people.
My personal view is that people who work together, or even in the same industry should help each other; if you've got a growth mindset and you believe in the abundance of opportunity that exists, then you'll be very open minded to helping others. Some people help others because they believe in the law of reciprocity, meaning that what goes around comes around, or because they have a generosity of spirit. I believe the best people in the industry help others because they're very confident in their own abilities. They know that people rising up will not detract from their success. If anything, it will only enhance it.
On the other hand, many people don't want to help; they may be ultra-competitive, or perhaps they don't think they can help. Or they may think that given they worked it out for themselves, why should it be any different for others?
And just to be clear, while the reasons not to help others may come from a more closed mindset, the following is also true: No one owes you anything. Sometimes you need to take steps and find ways to help yourself.
If you're looking for help and you'd like to learn more about how to apply The 5 P's of Commercial Real Estate Success every day, visit our website cresuccess.co and follow the prompts to download the eBook. As we discussed in the interview, there are not many resources out there on how to be successful in commercial real estate. And that's why I wrote this short eBook: to start the conversation. Best of all, it's available for free at car CREsuccess.co
That's all we've got time for this week. Thanks so much for listening and I will speak to you soon.
Thanks for listening to CRE Success: The Podcast. If you enjoyed this episode, make sure you subscribe to us on your favourite podcast platform and be sure to leave us a five-star review. For more information about the show, just check the show notes on your podcast app or visit us online at cresuccess.co