Anthony Denman: I’m here with Craig Pontey who co-founded the Ray White Double Bay group. What year was that in?
Craig Pontey: The year that we joined up was 1987. So, what’s that? 32 years ago. It’s quite a long time ago.
Anthony Denman: Wow.
Craig Pontey: When we first started Ray White Double Bay, there were six of us. so, there was Mike Finger, myself, Trevor Leitch as partners and three other people. So, it was a very small, compact business. We had great aspirations one day to be the number one gig in town. In those days, you may or may not remember, Ron Pillinger, Brad Pillinger’s dad-
Anthony Denman: I do.
Craig Pontey: Yeah, Richardson and Wrench. They were the big guys in town. They’d have … in the Wentworth Courier in those days was news print, they’d have like 25 or 30 pages of properties and Finger and I used to look, we’d have like half a page and we’d think, how the hell are we going to be able to get to that stage where we can one day be that market leader? Maybe there’s a secret. Maybe we can do it over night. It just took us 27, 28 years to get there, that’s all.
Anthony Denman: So, the secret’s perseverance.
Craig Pontey: Yeah, look, I think one of the things that we’ve been good at fortunately over the years is playing the long game. Not just going about things a step at a time and trying to be organized and trying to build a team and trying to make sure the culture’s right within the business. We’ve had some pretty big ups and downs as all businesses go through and I know you’re very well linked to the property industry. There’ve been a couple of times there where we’re under the pump big time. At one stage there we had Macquarie Bank a bit over four million dollars and nearly came unstuck having to start selling houses and cars and getting rid of things and all sorts of stuff. We managed to trade back out.
Anthony Denman: When was that?
Craig Pontey: Just during the GFC.
Anthony Denman: Right. So, that wasn’t … in 32 years, I mean, that wasn’t that long ago. Ten years now I guess.
Craig Pontey: What happened is, and I think everyone does this in their career, you want to own a business and you want to build a business and we sort of became a bit, that mentality that we were empire building. In those days, we had Surry Hills, Green Square, Circular Quay, Woollahrah, Paddington, Double Bay, a big rent roll and Ray White Commercial Eastern Suburbs.
Anthony Denman: How many staff?
Craig Pontey: So, we had about 180 staff.
Anthony Denman: 180?
Craig Pontey: Yeah, at one stage there, and all those businesses. What we very quickly realized after a couple of years is that we were really good at running Double Bay and punching it out there, but we weren’t good at running a network of offices because there’s a whole different skill base and we had all the back end, all the accounting, legal and finance, the backend here, all the IT here in Double Bay. It was like sort of a mini franchise business and we had managers in each of those offices. Mike and I owned the businesses and we had a couple of guys that we were going to take on as partners.
Anthony Denman: So, did you have like a CEO as such?
Craig Pontey: Yeah, well, Trevor was the CEO in those days.
Anthony Denman: Ah, okay.
Craig Pontey: Yeah. So, he was drawing the strings in. But, two of those businesses, one, Peter Natoli, who still owns Ray White Surry Hills and Erskineville today, bought Mike and I out and Grant Whiteman who you know is still our partner in Ray White Commercial Eastern Suburbs which is a fantastically successful business.
Anthony Denman: So, from essentially zero to 180 staff?
Craig Pontey: Yeah. Look, can I tell you, I think what we quickly realized over time was that we were much better at just running Double Bay, it was much easier. Double Bay is about 55 people, much easier to control, much easier to create a culture in a smaller environment in the one place. It was just a much easier business. At the moment, Ray White Double Bay’s got 25 sales people. Last year, the last year that Mike and I sold out, we did 950 million dollars worth of sales. So, just under 15 mill in GCI. So, it was probably a good time to get out if the truth be known. But, we’ve left the business in very good hands. Elliot’s a very smart guy and he’s pushing on. His role now is to continue to maintain that market share that we built over that 31 year period and he’s doing a really good job at it. I’m quite pleased. As you well know, I’m still working here as a salesman.
Anthony Denman: I was going to ask you, what does your day to day look like now?
Craig Pontey: Mate, I’m loving it. For me, it was more about Elliot approached Mike and I a couple of years ago and wanted to buy us out and that was fine, no trouble. For me, it was just about money really at the end of the day. If Elliot paid me enough money, which it was very kind of him, he did, then I was happy to go. But, he realized and realized with Mike as well that we still add value to the business being here.
Anthony Denman: So, Mike’s still-
Craig Pontey: Yeah, Mike’s still here. Yeah, we’re both here back on the tools. My role at the moment, I’m selling real estate, putting some deals together, doing the project marketing stuff and having a bit of fun. I’ve had a pretty good run. Sold a property in Queen Street, Woollahrah last week for 10 mill. Mate, I’m not complaining, and an apartment for seven and a half. So, mate, it’s all right out there. I’m just going back to my old stomping ground, all the old clients and now I’ve got a little bit more time to have a bit more fun with them and get out and do what I enjoy doing which is putting deals together and I don’t have to worry about the day to day, running of an office anymore.
Anthony Denman: Did you grow up in the Eastern Suburbs?
Craig Pontey: No, I’m an Eastern Suburbs import. I started working in the East in 1980. My career started in 1978 at a company called AH Taylor at Petersham], but I grew up in the Southern Suburbs.
Anthony Denman: In the shire?
Craig Pontey: No, not the shire. No, there’s no barcode on the back of my neck. Your listeners will appreciate that. But, yeah, no, I grew up in Oakley and went to school at Hurstville Boys. So, yeah. My father was an agent and a pretty good one at Rockdale for many years at a company called Elder and Rose.
Anthony Denman: So, you’re second generation real estate.
Craig Pontey: Yeah, correct. Yeah, when my son, as you know works at Collier’s in the city, so, he’s third. I’m itching to see if there’s a fourth. My daughter’s just had a grandchild recently, one year old, so, it’d be interesting to see if she goes into the game down the track, who know?
Anthony Denman: That’s some sort of record almost.
Craig Pontey: Yeah mate. Well, look at the White family. It’s a great example.
Anthony Denman: Of course, yeah. Absolutely.
Craig Pontey: They’re up to their fourth and soon to be fifth, I’m sure. Yeah. So, mate, as I said, yeah, no, I grew up out south and it was just a sheer coincidence meeting with somebody in the city that I ended up in an interview with Mike Finger who was then-
Anthony Denman: Right.
Craig Pontey: Yeah, Mike was then the property manager at AH Taylor at Petersham.
Anthony Denman: So, he didn’t grow up in the east either.
Craig Pontey: No, not at all. Mike grew up here in the east, but I didn’t. So, I went for an interview at Petersham with Mike and then got a job there. I started on the 28th of November 1978.
Anthony Denman: So Petersham, inner west right?
Craig Pontey: Yeah, correct. So, it was good fun there. I was 18 years old when I first started and I was a property manager or letting clark in those days as you started.
Anthony Denman: uh huh.
Craig Pontey: Yeah. It was good fun actually. And then, Mike then moved from there to Randwick AH Taylor and I actually followed him there as a property manager. In those days, people like Craig Sewell] was there and Trevor obviously, Mike. They’re a couple of really good guys. I was there for a couple of years and then in 1980, Taylor’s opened the business down here in Double Bay, they bought a building and Mike and I came down to … he was the sales manager and I was the property manager and we did that for about ten years and then on the 11th of April 1988, Mike and I joined up with Trevor to do the Ray White gig.
Anthony Denman: So, Ray White, were you one of their first-
Craig Pontey: When we first came onboard with the Whites, we were their 5th or 6th office in New South Wales, Sydney. They weren’t very well know in New South Wales in those days. Everybody knew they were big in Queensland because that was their home base. A guy called Bruce Inger was the general manager in those days, good bloke, he’s still around Bruce, good guy. We sort of then started … it was interesting, the first few years with Whites was really interesting because we were so hungry and keen to build a business. We were going hard and we were probably going on separate railroad tracks for a while. We were pushing them and we were doing different things and they were doing different things and it took us a while to understand about each other, how we’d get back on the railroad tracks together and push on and it’s been a really good partnership. We’ve had our moments with the Whites over the years as everyone does with their franchise, but I think we’ve always had a common goal and a common purpose and it’s sort of our ass is on the line. We want to see the business do well.
Craig Pontey: So, that business is now nearly 300 strong in New South Wales. Over 1000 strong … it’s a big business now. Across Australia, it’s the market leader, it’s got a market share of just over 8%, I think it’s about 8.3% which is … the nearest competitor’s back at three and a half percent. So, it’s a big business and the Whites have done a good job and we’ve been fortunate to be part of that growth over a period of time.
Anthony Denman: Did you have much involvement in the building of the Ray White brand so to speak? I mean, apart from-
Craig Pontey: Yeah, sure, well, they always tell us-
Anthony Denman: Building relationships of course.
Craig Pontey: They always tell us that you’ve got to have a strong brand at Double Bay to be able to sort of sell the rest of the network. The analogy that I think I’d use is that you drop the stone in the pond and the ripples go out and I think the middle of the pond, the center of the universe is obviously Double Bay, like I wouldn’t…. I’d have to say that wouldn’t I? But, yeah, look, I think if you ask Whites the question, I think we’ve been pretty good over the years as a partnership. They’ve dragged enough people down here to our office over the years to help them put on franchisees.
Anthony Denman: It’s like a training-
Craig Pontey: Yeah. All the good operators. We’ve had Helen Yap, Vivian from Western Australia.
Anthony Denman: Literally jump in the car with you?
Craig Pontey: Mate, they just come down and sit down and talk about why Ray White? Where’s the value? What’s the benefit of being Ray White as compared to somebody else? Why should I not just be an independent?
Anthony Denman: What is the value?
Craig Pontey: Mate, I think being part of a bigger group is important. You forget all the synergies around buying power and all of that, it’s more about being involved in a … it’s like being involved in a footy team. It’s like that team environment and it is even though it’s now got to be 1000 offices, there’s still a lot of guys that I talk to that have been there since the beginning and some new ones and I can talk about a couple of guys that were here that have … like Tim Doyle used to be our sales manager, he owns Ray White MacArthur, out Campbell Town way. He’s got six or seven offices out there. Runs an amazing business. There’s a lot of guys like that that you see that grow up in that Ray White network that use their own intestinal fortitude to have a crack, but use the Ray White systems. I think if I want to be honest, I think Ray White’s probably the best of the bad bunch.
Craig Pontey: Like as far as they’ve got great systems in place, great profile and the other thing is for our sales people now, I think all the sales people, when they go out to do an appraisal, if you’re Fred Bloggs Real Estate, people go, who’s Fred Bloggs Real Estate? So, you’ve got to Fred Bloggs, then you’ve got to sell yourself, then you’ve got to sell options. If you’re a Ray White business, you don’t have to sell yourself, everybody knows you’re in real estate because Ray White’s a recognized brand.
Anthony Denman: I always wondered, I think real estate sales people generally are really great marketers, innately so. They’ve got a really good sense of marketing and they’re really marketing savvy and I quite often wondered over the course of my career … someone like yourself, didn’t create their own brand identity and trade off that.
Craig Pontey: As I said, I think there’s definitely and this is how I think, there’s definitely some benefit in not being Robinson Crusoe on your own. When you’re in a brand, and you’re competitive, you’ve got something to measure against. Sure, you pay franchise fees, but you’ve got to get the benefit out of that and that’s up to you to be able to talk to your franchisor about what benefit you get. Like, I often have other Ray White guys coming here and they’re whinging about head office and I say to them, okay, fine, now, what seems to be the problem? I never hear from them. I said, hang on a second, you’re sending them money every month for franchise fees? Yeah, yeah, yeah. I said, they’re another supplier to you, like any supplier, so, why don’t you sit down with them and tell them what you need to help grow your business. He says, that’s a good idea. I said, you’ve never done that?
Anthony Denman: What an interesting approach. I bet you most real estate agents wouldn’t have done that.
Craig Pontey: Well, they don’t do it, because-
Anthony Denman: They just accept the circumstance.
Craig Pontey: Or, they just think those buggers, I just sent them a cheque every month and they do nothing for me.
Anthony Denman: Builds resentmentCraig Pontey: Correct, that’s exactly right. Whereas, I tell them, pick up the phone, ring them up, get your BDM out, sit down, say, look, I need help with this, I need help with that, what are the milestones? What’s the plan? How do you help me get my business from level one to level two to level three, grow my business? Because everybody wants to grow their business. If you don’t want to grow your business, then you need to get out. I think over the 31 years that Mike and I have had Ray White Double Bay, that was always … we always needed to continue to be growing the business. If we weren’t growing, we were going backwards. Growth’s not always about people, growth’s about market share, about profitability, sustainability within your business and future planning. Not just future planning within your business, but also about wealth creation for yourself. Mike taught me very early on the benefit of-
Anthony Denman: Of great partnership.
Craig Pontey: Yeah. We’ve been together now 41 years.
Anthony Denman: That’s almost unheard of.
Craig Pontey: Yeah. It’s pretty cool actually.
Anthony Denman: Yeah, congratulations. That’s an achievement in itself.
Craig Pontey: Mate, we’re very different people, but-
Anthony Denman: That helps I think.
Craig Pontey: We’ve got different skill-
Anthony Denman: That’s really important.
Craig Pontey: Yeah. We get on famously. We’ve been together a long time.
Anthony Denman: Because you’re both sales people. My business partner, Brett, I don’t even know if you remember Brett-
Craig Pontey: Yeah, of course I do.
Anthony Denman: 26 years now we’ve been together. But, we’re completely different.
Craig Pontey: Yeah. He’s nice and you’re not. Sorry. I’ll take that back. You can cut that out.
Anthony Denman: No, that’s actually quite true.
Craig Pontey: No, it’s all good.
Anthony Denman: No, he is. He’s a lovely guy.
Craig Pontey: He’s a good bloke.
Anthony Denman: He does all of the stuff that I don’t do and I do all the stuff that he doesn’t do and I think that’s one of the reasons why it’s so successful.
Craig Pontey: Well, I’ve been married 36 years and poor woman putting up with me, it’s the same as my marriage. A partnership’s just like being married, it’s all about communication and setting goals. I still sit down at the beginning of every year with my wife and we write down 10 or 15 things that are important to us. Sometimes it’s about weight or holidays or golf handicaps because my wife plays golf.
Anthony Denman: That’s nice you play together.
Craig Pontey: Yeah. Quite often. What’s happening with the kids and a whole lot of stuff. And then, half way through the year, we sort of revisit to make sure we’re on track. Cross things off that are done and sort of gives you … yeah, it gives you a sense of-
Anthony Denman: That’s great.
Craig Pontey: So, Freddy Gross taught me that years ago when I used to go to Doctor Fred’s courses. Because, it’s all about communication and when you’re in a partnership, being clear on what your goals are and being clear on when you’re together, what are you trying to do? What are your ambitions? Obviously, you’ve got a child and it’s important that you create the best life so that they can have the best life and go to school. It’s been quite interesting over the years. I basically run my business life similarly with Mike. We’ve always sat down and had goals. We continue to watch the score board. I don’t do it … as you know, last year Mike and I sold out to Elliot, but I used to watch the score board vigorously. So, every Monday, if you were looking for me at 4:30, I was in my CFO’s office running through all the numbers for the business, what’s to settle? What auctions have we got coming up? We know we had a 74% clearance rate last year or the year before.
Craig Pontey: What’s happening with the property management business? What are the costs coming up? What are our tax responsibilities? How do we plot the growth of the revenue? We’d have spread sheets and targets and then you can keep a close eye on your business and you say, well, why did you do that? The answer is, because there was one stage there years ago where we didn’t do it and we lost money because we were slack. I’m talking 15, 20 years ago. We were just slack in running the business and we lost money unnecessarily. The classic for us then was, we spent one year $450000 of our own money on marketing about 15 or 16 years ago and we woke up and went, how did we do that? The sales people weren’t collecting properly the money for the auctions.
Craig Pontey: When you get a big business, and you’ve got multiple people, you’ve got to put checks and balances in place. Last year, we spent three and a half million in in vendor paid and had, touch wood, not one delinquency in payment from vendors, not one. So, what we did then, 16 years ago, we actually went out and thought, we’ve got to get this fixed, we employed a girl and her whole job role was to get our marketing in place. That was it. We paid her 75 grand a year. We thought that was better than losing 450. Her gig was to get all sorted. So, she was with us for about three years. She sorted out all our marketing, put in place some checks and balances, some of which we still have today 15, 16 years later.
Anthony Denman: So, you’re not watching the score board and then using that -or are you using that as motivation to go out and get more revenue?
Craig Pontey: Mate, can I tell you-
Anthony Denman: or just to make sure that you keep your expenses and your-
Craig Pontey: No. I think both. Can I tell you … Mike will tell you this. For me, there’s two things you can do. You can either cut costs or you can ramp up revenues. That’s it. Not just our business, in any business. They’re the two things you can do. Right? So, things aren’t going bad and the revenues aren’t matching up, then you’ve got to cut some costs. Sometimes it’s hard, particularly, we’ve been pretty soft over the years because you don’t want to get rid of people, because you just like them and … although, it’s funny, I had a situation once where one of the guys who’s my sales manager came into my office and sat down, closed the door and said, mate, that Anthony Denman, he’s a terrible salesman, I want to get rid of him. I said, what do you mean? He said, his culture’s not right, I said, what did Anthony write last year? This is some years ago. He said, Anthony wrote 240 grand.
Craig Pontey: I said, okay, last year, and I said, okay. So, I said, how much of that did we get? We got half, 120 grand. I said, okay. So, I said, what you need to do when Anthony comes into your office and sits down next time, pull out a piece of paper and when he’s whinging at you, write down everything he says. He went, why would you do that? I said, well, what happens is when you write it down, Anthony will stop and he’ll say, why are you writing it down Craig? I go, well, I want to hear what you’ve got to say and I don’t want to miss anything, so I want to answer everything. So, that’s the first thing you do and that’ll diffuse Anthony. The second thing you do is, when he’s sittingon the top of his [inaudible 00:18:22] here, you see $10000 and he said, what’s the $10000? I said, well, Anthony writes 240, we get 120, that’s divided by 12, that’s 10 grand a month. So, Anthony gives us 10 grand a month, right? He went, yeah.
Craig Pontey: So, I said, so, after you’ve sorted out all Anthony’s problems, but if he’s still culturally being a pest, what you need to do, the moment you can find me someone to replace that 10 grand a month, you can get rid of Anthony. He went, oh, now I get it. I said … sales people generally from my experience with them, are a fantastic people. Most sales people and I’m a sales person, most sales people are disorganized, have too much freedom, they can come and go as they please, they need to have some checks and balances in place. The really good ones that I’ve seen over the years, are ones that work 24/7 and have no other life, it’s quite incredible. There have been some good ones come through here over the years, but it’s interesting in that I think as a sales person, if you’re not organized in what you do, then you won’t make money. If you haven’t got a database and if you haven’t got systems and checks and balances in place, and a process, and auction’s the best process, because it forces you to do a whole lot of things. It forces you to market, forces you to meet people.
Anthony Denman: I noticed your auction room … we’re in Craig’s office in Double Bay at the moment, it’s been recently renovated, has it,?
Craig Pontey: Yeah, it’s a little while ago.
Anthony Denman: Well, it’s been down for a while.
Craig Pontey: Yeah. No, we’ve got our own … so, our reception area down stairs is our auction room and we’re doing auctions every Thursday.
Anthony Denman: Purpose built right?
Craig Pontey: Yeah, correct, for that reason. So, every Thursday, we’re running auctions. It’s that old story, build it and they will come. Tonight, funnily enough, we’ve got nine up. Last week we had six. So, sometimes we have one or two, sometimes we have 15, just depends on-
Anthony Denman: Do any on site auctions?
Craig Pontey: Yeah, we still do a few. I’ve never been a big fan of on site auctions, I just find it a little bit harder to control and it’s raining today, it would be lovely doing on site auctions on Saturday in the rain, but look, everyone’s different mate. Can I tell you, when Mike and I owned the business, I couldn’t care less whether they were auctioning it on site here or in Timbuktu, the buyers will come. Some people love it on site and some people don’t.
Anthony Denman: The most expensive home you’ve sold is …
Craig Pontey: Yeah. So, settled last year, CK Ow from Stanford land, Stanford corporation hotels, 38B the Crescent Vaucluse. Got a great price, 65 and a quarter million.
Anthony Denman: So, you didn’t auction that?
Craig Pontey: No. But, Mike sold Leure for 30.8 million year before last and that was going to auction sold before. So, yeah, so mate it does happen. I auctioned last year, towards the end of last year, a block of flats in Albert Street, Edgecliffe number 22, called Ironsby and that sold for 33 and a quarter. That’s the record price under the hammer for a residential property in Australia.
Anthony Denman: So, you take a property like the one you just mentioned, the 65-
Craig Pontey: And a quarter.
Anthony Denman: Yeah. I mean, how do you list a property? It must be so competitive. How do you list a property?
Craig Pontey: Look, I was a little bit fortunate there. I’d sold it to Mr Ow 23 years ago for seven million and I kept in contact with him. He lived in Singapore most of the time was here on and off and I kept in contact with him, I’d sold a couple of other properties for him.
Anthony Denman: So, uopdating via email or?
Craig Pontey: Well, it’s an interesting story and I know he won’t mind me sharing. When I sold it to him, I said to him, one day when you go to sell it, wherever you are in the world, I’ll come to see you. He laughed, right? So, out of the blue, I get a call from him. I was actually in Europe on holidays and I got a call and had my phone and saw the number come up and I’d kept his number. So, I answered the phone and he said, do you remember … he says to me, do you remember Craig I want to sell my house? He said, do you remember telling me wherever I am … I said, do you remember that? He said, yeah, I remember. I said, so, where are you? He said Singapore. I said, well, at the moment, I’m in Italy, it was like a Wednesday and I was back the following week. I said, the following week on Tuesday, can I see you in Singapore? He was a bit flabbergasted. He went, what, you’ll come to Singapore? I said, yeah, sure, no trouble at all. So, I jumped on a plane and went to Singapore just for two days and presented to him there and about six or eight weeks later, got the gig. There were a number of other agents that had submitted.
Anthony Denman: I’m interested in that?
Craig Pontey: Yeah, there were a number of other agents who submitted. So, that one, I was a bit fortunate that I’d actually-
Anthony Denman: head start
Craig Pontey: Well, I continued the relationship.
Anthony Denman: 23 years.
Craig Pontey: We had a good trust, bond. We sat down and ran a process and it took me eight weeks to sell it.
Anthony Denman: Where do I start? Don’t auction a property like that?
Craig Pontey: Look, can I tell you, if I could convince somebody to auction something like that, I’d love to do it. If it was mine, I would, depending on what the market’s like. As I said, that took eight weeks to sell which is a record in itself. Those big properties normally take a long time.
Anthony Denman: What does the process look like? What does that eight weeks look like?
Craig Pontey: Well mate, well, basically, we ran an EOI where we were advertising in the Wentworth Courier, online. We were really … there’s a media agency that calculates how much free media you get out there. I can’t think of the name of it. What happens is, free advertorial and they calculate the-
Anthony Denman: yes I’m familiar with the process.
Craig Pontey: So, Alex Tilbury who’s a genius at Ray White, she’s the head of Ray White marketing, Alex came down and we had TV, radio, we were in every single newspaper in the country. We spent less than 30 grand physical marketing and we got over two million dollars worth of free publicity for that property.
Anthony Denman: Through the PR of course.
Craig Pontey: Yeah, of course. Yeah, because it was such a high profile property. Interestingly enough, the buyer came from the Wentworth Courier. Cross my heart, hope to die.
Anthony Denman: Just around the corner.
Craig Pontey: I get a call one day and it’s a well known story, I get a call one day from the buyer saying she’s just flipping through the Courier at a friend’s place having coffee.
Anthony Denman: No way.
Craig Pontey: True story, yeah. Debbie Schwartz, the loveliest woman you’d ever meet in your life and I’ve seen the house of my dreams that I’ve always wanted to buy. Can we meet you there whenever? We had two or three inspections and three or four weeks later, we sold it.
Anthony Denman: What’s the negotiation look like on a deal like that?
Craig Pontey: Oh look, can I tell you, they’re always difficult. But, it’s like doing any negotiation. You’ve got to focus on the outcome for the vendor. What happens with a lot of sales people is they focus on the commission. You’ve got to focus on the deal and you’ve got to make sure your energy’s right. Look, it was a tough negotiation with both sides, vendor and purchaser, but we managed to find common ground and everyone was pretty happy. Look, at the time that it sold, it was the third highest sale price in Australia ever. So, the vendor and I … I said to the vendor, show me another one. He kept saying, there aren’t many like it. It needed work. The purchaser’s now up there demolished half the house and … it’s unbelievable what they’re doing. It’s fantastic. It’ll be an amazing home for his family.
Anthony Denman: I guess you want to stay in touch with them for another 23 years then.
Craig Pontey: Yeah. I’m planning on being around that long.
Anthony Denman: You are?
Craig Pontey: Mate, I enjoy this business too much. It’s too much fun.
Anthony Denman: What would you do? Seriously.
Craig Pontey: Yeah. Oh yeah. Well, look, the beaut part about our business is that if you do the right thing and you play the right game, you can stay around for as long as you want, come and go as you please. That was probably one of the reasons why for me, last year when we sold … Mike and I sold out to Elliot, I just wanted a little bit more freedom and not have the responsibility of people and the business. When you run a business our size, you’ve got a responsibility not just to yourself and your family and your partner, and their family, but you’ve got 55 other people in here that depend upon you. Same as your business, no different. You want to make sure that you do the right thing and that you build sustainability into your business.
Anthony Denman: If 60 odd million’s the highest price you ever sold a property, what’s the lowest price you’ve ever sold a property for?
Craig Pontey: The lowest price. That’s actually a good question.
Anthony Denman: You’ll probably have to long and hard about that one. You might have to go back to Petersham for that one.
Craig Pontey: Yeah. No, I sold a … my first ever sale was a unit in Streetfield Road, unit number six at Four Streetfield Road, Bellevue Hill, for $123000.
Anthony Denman: There you go.
Craig Pontey: Yeah. So, it’s probably the lowest.
Anthony Denman: How long did that take to sell?
Craig Pontey: Do you know what? It was so long ago I can’t remember. The vendors are still around, they’re lovely people, but that was a long time ago.
Anthony Denman: If you don’t mind, I wantto talk to you about the Wentworth Courier and it’s still to this day a successful way to promote and sell market property in the Eastern Suburbs. Has been for many, many, many, many years.
Craig Pontey: Long time.
Anthony Denman: In fact, I do remember the days when it was, if you dropped it on a small child, you could inflict some serious damage.
Craig Pontey: She got to 240 or 260 pages of real estate. Forget the rest of the book.
Anthony Denman: Real estate. Just amazing. Color print technology. Because, prior to that, it was linage in the Sydney Morning Herald, right?
Craig Pontey: Correct.
Anthony Denman: The only way you could describe a property or present a property was through the written word-
Craig Pontey: Correct.
Anthony Denman: … and therefore, so many people had to inspect every single one to be able to short list and narrow their search.
Craig Pontey: I’m not sure what’s better, that 35 years ago or what we’ve got today.
Anthony Denman: Yeah.
Craig Pontey: But anyway.
Anthony Denman: We’ll get to that. You were primarily responsible for, as I understand it, creating a newspaper that would rival that publication.
Craig Pontey: Yeah. So, when was it? Back in about ’89, ’90, ’91, ’92. So, what happened, there was a bit of a backlash back in those days as to the cost of the Courier. The agents were getting a bit restless about it and we’d had an approach from a couple of people, the top guys, there were about seven of us-
Anthony Denman: In Double Bay?
Craig Pontey: In Double Bay, yep, in Double Bay. The Wentworth Courier was the rivers of gold. It was an amazing publication, still is to this day, don’t get me wrong. What we did is we had a couple of presentations from a couple of people and decided that we’d have a crack at running a newspaper with some other partners. For my sins back then, I ended up being the chairman. I don’t know how that happened. I think all the other boys ran away.
Anthony Denman: It’s a big deal, right? taking on the Hannan family essentially, right?
Craig Pontey: Well, yeah. The reason we did it wasn’t to really take on Michael Hannan, who’s a great guy and his family, it was more a business opportunity to be able to create something that we thought we could make some money out of and take control of our own destinies around price increases and what was happening. That was the main-
Anthony Denman: So, you’re essentially getting frustrated by the amount of money that they were asking your vendors to spend?
Craig Pontey: Yeah, correct.
Anthony Denman: And the value you were getting for that.
Craig Pontey: Well, and we wanted to have a little bit more control and we thought it was a great idea to be able to start a business and the guys that we got into bed with had printing expertise.
Anthony Denman: The Eastern Express, right?
Craig Pontey: Yeah, Eastern Express.
Anthony Denman: Who came up with that name?
Craig Pontey: Do you know what? I can’t remember. I honestly can’t remember who came up with the name. It was a very good name for a great publication. It was the first publication in Australia that was cover to cover color.
Anthony Denman: Right. Because the Wentworth Courier still had mono-
Craig Pontey: Correct. The Wentworth Courier was still news print.
Anthony Denman: Right, okay.
Craig Pontey: It wasn’t long that they needed to follow suit. So, we had about 70% of the market there for a while.
Anthony Denman: Wow.
Craig Pontey: Look, we struggled. I think it took us a while to realize that we didn’t know how to run a newspaper. We got involved in some litigation against the Courier, which we lost at the time, but I think what happened towards the end there is, we managed to pinch a bit over 15 million dollars worth of revenue out of the market in two and a half years.
Anthony Denman: That’s just amazing.
Craig Pontey: Yeah, it was a lot. It was something that if we’d have actually known what we were doing, would probably still be here today. In the end, we ended up selling the masthead back to the Hannan family and cutting a deal with them for the future which was good for everybody and we got on being real estate agents and he got on … after that, what happened not long later is Anthony Catalano started the Sydney … sorry, started the Melbourne Weekly down in Melbourne and copied our model to a degree, he came to see us. He’s a great bloke. As you know, that was sold back to domain for tens of millions of dollars. So, we just missed the boat by a little bit. We weren’t as clever as the Melbourne boys.
Anthony Denman: But, you were certainly successful nonetheless.
Craig Pontey: Yeah. Look, I learnt a lot. It taught me to stick to my knitting. My grandfather was a publisher. He had gun magazines with David Yaffa. One of the titles is still around to this day, but mate, real estate’s much easier than publishing. I’ll never forget the editor of our paper, he said, this publishing game, he said, it’s like running the marathon. You get the first paper out and then they pick you up at the end in a taxi and they drive you back again to run the marathon again for the next week.
Anthony Denman: Totally, yeah.
Craig Pontey: But, at one stage, the Eastern Express got to 200 pages.
Anthony Denman: You essentially were kind of walking in as the marketing agents and collectively through appraisals recommending that as the best option.
Craig Pontey: Well, we thought it was because of the color and the opportunity.
Anthony Denman: Plus the Wentworth Courier too were making a lot of mistakes and-
Craig Pontey: Yeah. Can I tell you again, it wasn’t about mistakes, it was more about an opportunity to create a business that we could all have a part of. Absolutely. Look, can I tell you, there was also … there was animosity from some people around it. Not for me. I never had any animosity towards the Hannen or the Fairfax family, it was about a business opportunity and unfortunately, we buggered it up, otherwise they’d still be going. As you know, Hannan and Fairfax sold out to Murdoch about four or five years later for four or five hundred million. I’m sure a big part of that was Courier. Our relationship to this day with Courier is very good and with Newscorp generally.
Anthony Denman: So, you’re still placing ads in the-
Craig Pontey: Yeah, oh yeah mate.
Anthony Denman: On a regular basis.
Craig Pontey: Oh, absolutely. Absolutely, and won’t stop. Can I tell you, about three years ago, we sat down with Courier and said, look, here’s what we want to do, we want to ramp up our print spin. Everyone’s saying, oh, print’s dead. Print’s dead, it’ll never work. So, what did we do? We went to them and said, look, we want to ramp it up, run double page spreads, this, that and the other. We ramped up our spend massively in the courier. Much to our vendor’s delight, because we sold a shit load of real estate, much to Courier’s delight, and it made a massive difference to our profile because everybody else was going back the other way when we were saying print’s still alive and well. You still get people … when the Courier comes out Wednesday, Thursday, you still get people ringing up and say, oh, you’ve got that property in the Crescent, they always say, how many bedrooms is it? First line in the ad says six bedrooms. How big is the land? The third line says 874 square meters. Then I say, what are you looking at? Oh, I’ve got the Courier, it’s just been delivered. Still happens. Still happens.
Anthony Denman: So, how do you feel about the transition to digital?
Craig Pontey: Can I tell you, it took me a little time to get my head around it. Particularly in the early days, I think it’s certainly made our business … easy is probably not the right word, but it’s certainly made everything quicker and faster. Look, I think it’s a good thing. I don’t think it’s a bad thing. I don’t think print’s dead in any way, shape or form. In actual fact, I think it’s having a bit of a revitalization in some respects, particularly the Courier’s a different animal to most other publications.
Anthony Denman: Yeah. I mean, that’s the first time I’ve heard that in a long time.
Craig Pontey: Yeah, mate, I don’t think-
Anthony Denman: … and it’s really interesting and really refreshing. I mean, it was so much easier back in the day. I mean, Craig, you’re not just a highly successful what we’d call I guess general agency sales person, a negotiator lister, we might talk about that later, but also very much highly successful in the project marketing world as well.
Craig Pontey: Yeah, I’ve been pretty fortunate. I’ve had some good clients and it’s not something a lot of the other guys in the east have ever focused on. It’s been … and print for that, as you well know, is a big part.
Anthony Denman: It was just so much easier though. I mean, you could essentially put one ad in the Sydney Morning Herald and be done with it, right? And then, you’d turn up with your black book on a weekend and you’d write everyone’s name down and sell it. I guess the thing with digital and what we find is that it’s so … it’s accountable, like you can really measure it’s success, but to measure it’s success, and to really truly understand the pathway to purchase, it really just takes so much-
Craig Pontey: The other thing is, I don’t think anybody really still … you’ll see all this stuff come through on the dashboard that they went to the website and checked in, but how do they get to the website in the first place? Did they see an ad in the Courier or the Herald or did they see something come up on Instagram or Facebook or what? So, everyone just assumes that digital is much more powerful.
Anthony Denman: Then there’s the whole idea of pathway to purchase. So, it’s driven from a B to C perspective. It’s like selling chewing gum. Maybe we can convince someone to buy a pack of chewing gum, but we’re not going to convince somebody to magically through a Facebook feed or are we? To buy a 65 million dollar home.
Craig Pontey: Yeah. Look, I think-
Anthony Denman: I mean, it’s interesting that-
Craig Pontey: If you come back to the … it’s a project marketing and general agency, what’s happened over the last number of years, well, I can only talk about what happens in my own business, is that we’ve been very diligent since the internet came in on keeping … so, if you inquire on a property in Vaulcuse Road and it’s seven to eight million dollars, on the net and we’ve only got your email address because you don’t want to put your phone number in, then next time we get something in the seven to eight million dollar range in Vaucluse, you’ll get notified. So, we’ve been doing that for many, many years. So, our backend buyer database now-
Anthony Denman: You were, I remember, well and truly ahead of the curve when it comes to-
Craig Pontey: We started early. It was massive.
Anthony Denman: yeah – I remember you talking about it backin the Wentworth Courier days
Craig Pontey: Mate, I can tell you that we’ve … last year, we sold a couple of hundred million dollars worth of real estate just off the back of that. There are 25-
Anthony Denman: Your database must be significant.
Craig Pontey: Yeah, it’s huge. What’s happened is we’ve been very fortunate in that because we’ve had a couple of full time people and we can slice and dice it properly, and so that it’s good clean data, rather than just spamming everyone, although, look, we had issues with it. But, yeah, the internet has been a major game changer in our business. The interesting part about it is though, as a business and a sales person, it’s hard to show profile on the net.
Anthony Denman: Yeah. I found that point really interesting, because I remember the days, I think John McGrath, right? Was really successful at doing that, at building his business, his business profile through the Wentworth Courier, put very simply, just by using the color blue which seemed to work really nicely with blue harbours and blue oceans and blue swimming pools. I think some vendors actually thought that the use of blue actually made the properties look better. I don’t know, but either way, he had a really strong presence in the Wentworth. It was one of the reasons he sort of built that business so strongly in those early days was building a profile through the Wentworth Courier.
Craig Pontey: Mate, that was the platform that we were all using. So, if you’re a vendor and you’re looking to sell or buy, you’d go there and you’d turn over the … you’d go, jeez, look how many pages those blokes have got. Jeez, that’s a big business. If you’re then looking to sell down the track, you’d go, I remember they had 20 pages, it must be a big team of people. At least you’re on the shopping list. You’d get an invite in. Things have changed a bit. There’s a lot more … in the old days, we used to have a regime and still do in here of cold calling and communicating and you’ll still see the guys in here at night time doing it, it’s been a big part of our success I think over the years, cold calling and door knocking. What’s happened in the last probably-
Anthony Denman: So, literally knocking on doors?
Craig Pontey: Yeah. still happens.
Anthony Denman: Wearing out the shoe leather.
Craig Pontey: Yeah, still happens. One of the ladies signed up an auction in Randwick last week, door knocking.
Anthony Denman: No way.
Craig Pontey: Yeah. Still happens. But, I think what’s certainly happened over time is everybody’s realized that we’ve been doing it and everyone does it now. I’ll go to a dinner party and often someone will say, oh, I had a call last week from one of your blokes. Who was it? I can’t remember. So, I’ll come back to the office and kick someone because they haven’t sent him a card or whatever. And then they’ll say, oh, no, but I get calls all the time from agents and they go, oh, who rings you? I can’t remember who, but I get two or three calls a month from different agents. No one bothers to send a card.
Anthony Denman: So, they can’t remember the name, but can they remeber the office.
Craig Pontey: Sometimes they do. Not always though. Not always. Depends. It depends on-
Anthony Denman: They don’t follow up with something tangible to-
Craig Pontey: We’ll just send a card and then call back three weeks later or something. There are a few people who get it-
Anthony Denman: Interesting you say that, interesting you say that – testament to my own personal experience.
Craig Pontey: If you’ve not got a database of people and you don’t know anybody, how do you build anything? How do you start? You can only start by meeting people and continuing to build those relationships over time.
Anthony Denman: No, that’s really interesting that whole building the profile thing. So, how can you through digital … have you had any thoughts on how through digital media you can build a profile like you could with the pages and pages of print media?
Craig Pontey: So, Mike and I sold out 7th of September last year and we’re now sales people. So, what I’ve done is all of the things that I was teaching my sales people to do, I’m now doing on my own. When I say my own], the business in here still does quite a bit of it. So, we’ve got a full time social media person in here that does a lot of the social media. I’ve employed someone on a contract basis every month. I meet twice a month with her to go through what’s happening with my social media, Instagram, Facebook, all of the … LinkedIn, everything that’s out there, because I’m a bit of an old trogladite, I’ve got to continue to be remembered and proded to post which is important. Look, it’s one of those intangible things that I still struggle with trying to see how it materially helps your business, but I know you’ve got to do it. You know what I mean? I know if you don’t engage in it, then you’ll get left behind. Things are changing. Instagram seems to be the one that’s the new-
Anthony Denman: The next big thing, right? That’ll go onto something else-
Craig Pontey: Well, what’s happening with Instagram as you probably know, later this year, they’ll start charging for stuff. They’re not at the moment, but-
Anthony Denman: Well, they’ve just stopped liking, right?
Craig Pontey: Correct. That’s why they’ve done it.
Anthony Denman: That’s already causing some issues.
Craig Pontey: Yeah. But, yeah. So, look, can I tell you, I know that I have to engage in digital marketing. I’ve got my own website, I know I need to keep that up to date, I know I need to continue … I’m still sending out, believe it or not, I send out a newsletter once a quarter to all the waterfronts with brochures. If I get a high profile property for sale, I’ve got a high profile database that I still post things to, because some of these … they go on the net and have a look, but when you get a nice glossy brochure, sometimes you don’t throw it away and maybe you’ll tell your mate or who knows. I have had an instance where someone came to the office with one of the brochures in hand wanting to sell something. So, look, can I tell you, I think it’s about that old topic that we used to call layering in the old days. You used to have to do the letterbox drops and the door knocking and the phone calling. It was all about layering. I just think that hasn’t changed, it’s now layering with all of that plus the internet and the Instagram and the frigging … I think everything’s important. The hard part’s just to manage that process and make sure that you’re spending the money in the right places.
Anthony Denman: Classified real estate sales people, if somebody says, what do you do? I’m a real estate agent, you’re a real estate sales person, but you’ve got to list the property first before you can sell it.
Craig Pontey: That’s all our business is about really.
Anthony Denman: About listing. So, would you classify yourself as a lister, a sales person or a negotiator or all of the above?
Craig Pontey: Mate, can I tell you, I think the thing that I’ve been pretty good at over the years is maintaining relationships. So, I’m probably a good relationship manager in that part and giving it to people straight and not telling them the BS and I think I’ve been … when there’s a deal on, I think I’m a good facilitator between vendor and purchaser. I don’t miss many, I can tell you now. The interesting part about it is after being in the game a long time, that experience of having done those things continues to replay. The guys come into my office and they sit down and they go, oh, look Craig, I’ve got this buyer at this level and the vendor’s at this level and I say, oh, have you done this, this and this? And they go, oh, how did you know that? I said, well, it’s happened to me 25 times before. The patterns with buyers and sellers are continually the same. So, I tell them, go and do X, Y and Z and see how that and then come back to me and they come back and go, you’re not going to believe it, but X, Y and Z works.
Anthony Denman: That’s crazy.
Craig Pontey: I’m going, well-
Anthony Denman: So, it’s not principal negotiation … sorry, it’s not positional bargaining, it’s principal negotiation.
Craig Pontey: There’s an old saying that I tell these guys often. It is, he who has the most to lose has the least power to negotiate. He who has the most to lose has the least power to negotiate. What happens is, as sales people, we focus on the fee. Rather than focusing on the deal, don’t worry about the fee, focus on the deal and how do I get Mr Smith to buy Mr Jones’ house? What’s motivating Mr Smith’s offer? Is it the wife, the kids, the fact that the kids are going to school, he loves the house? Whatever it is, try and focus on selling the future to those people and-
Anthony Denman: So, you’re not focusing on price?
Craig Pontey: No.
Anthony Denman: You’re focusing on-
Craig Pontey: With the purchaser.
Anthony Denman: Yeah.
Craig Pontey: And with the vendor, like at the moment, who knows what the market’s going to be. So, at the moment, we’re sort of taking away the future. At the moment, I can tell you you’re going to get a good price for your house, but who knows what’s going on in the world, in China and Hong Kong and Trump and all the shit, the Brexit, all this rubbish that’s going on. Who knows what’s going to happen. I’ll give you a good example. Years ago when 9/11 happened and the buildings unfortunately went down, I’ll never forget it, Mike had a signed contract on a house in Dover Heights the day before all this happened at a really good price and the vendor said, let me think about it overnight. Unfortunately, 9/11 happened, the buildings went down, that morning, the buyer rang up and said, look, I was going to sell some shares on the stock market, they’re now worth half of what they were yesterday, okay, the deal’s off.
Craig Pontey: He did exchange the night before. So, you just don’t know … god forbid that ever happens again, but you just don’t know what’s going to happen out there. At the moment, we’re still in a big credit squeeze. No one wants to call it that, but go and try and borrow some money. It’s hard work. Everyone says, the banks are loosening up. It’s not what I’m seeing. It’ll be reported in the press soon, there’s a prestige sale about tofall over because the buyer can’t get money. I haven’t seen that happen for 20 or 30 years.
Anthony Denman: So, talking about tough negotiation, what do you remember is the toughest negotiation easily recorded in your mind or what does a tough negotiation even look like in your world?
Craig Pontey: Mate, I’ve had plenty over the years. I think they’re all tough for different reasons. Some of the ones that are real tough I probably can’t tell you about, because it’s a bit too confidential and a bit too close to home with some of these high net worths. But, look, can I tell you, again, I come back to what I said before, when you’re negotiating, you’ve got to focus on the process and what’s important to both parties. If the deal’s meant to happen, it’ll happen.
Anthony Denman: Have you ever read a book called Getting To Yes?
Craig Pontey: No.
Anthony Denman: It’s a great book. Yeah. I think it’s really interesting because as somebody who works in the creative field, not so much in that negotiation area, it’s basically everything you said, right, that … the premise of the book is that you’re not taking a position on price. If you take a position on price then no one will ever move. You’re coming up with creative and interesting and inventive ways to motivate the buyer and the seller to get to that end goal that doesn’t necessarily focus on price.
Craig Pontey: How often have you heard a sales person say to you, the guy wants 1.2 million and he’s not going to budge? I go to them, okay, so, he won’t take one million, one hundred and ninety nine thousand? He goes, oh yeah. I said, but hang on a second, you told me 1.2 won’t budge.
Anthony Denman: There’s a lot of other motivators though, right?
Craig Pontey: Yeah. Half the time, you don’t know what’s motivating the vendor. You don’t know what’s-
Anthony Denman: Even the way you structure a deal, right? So, you’re stillgetting 1.2M But you might get half now and half later.
Craig Pontey: Particularly at the moment, in the normal resi space, who knows what people’s motivations are for selling? Whether they’re in financial stress, they’re moving to somewhere else, they’re upgrading, downgrading, they’re not well. There’s a whole … death, divorce, marriage, all that stuff.
Anthony Denman: When you talk to vendors, do you get a thorough understanding of that, do you think?
Craig Pontey: Mate, it’s hard sometimes. Sometimes you’ve got to go digging to … a couple of the tell tale signs is when you go to someone’s house and in the closet there’s no men’s clothes, they’re all gone, but there’s the women’s-
Anthony Denman: Ah, so they might not tell you that.
Craig Pontey: The other classic is, sometimes when you get a contract and you look at the certificate of title, there’s more than one mortgage registered on title.
Anthony Denman: That would be a dead giveaway.
Craig Pontey: Well, stuff like … but, mate, look, you don’t know. I’ve had plenty of vendors that have been stressed and you wouldn’t have a clue. Conversely, ones that tell you they’re-
Anthony Denman: You think they’re flying and they’re not.
Craig Pontey: Look, everyone always tries to keep up with the Jones’, particularly around here, so sometimes it’s hard to do that. Look, let’s face it, in the last ten years, the market’s more than doubled. If you’d have bought a house ten years ago for two million, it’s worth over four today. It might even be seven years. It’s just gone berserk.
Anthony Denman: Yeah, that’s the cycle, right though?
Craig Pontey: Unbelievable.
Anthony Denman: Traditionally the cycle, what, every eight to ten years? Do you feel like that’s going to change or do you think in eight to ten years that real estate generally all over Australia will be worth roughly double what it is today?
Craig Pontey: I remember selling a semi in Bondi 30 years ago for $300000 thinking that’s just an enormous amount of money for half a house. $300000, you’ve got to be joking. That same semi sold 18 months ago for 2.6 million. All right? But, will that semi be worth ten million in ten years time? I’m thinking the same. I still think 2.6 is a lot. Mate, I’m not really sure. I think what might happen is, someone’s going to come up with an innovative way to fund these things. I don’t think anyone’s … I know plenty of people are thinking about it. So, if that happens, then maybe we’ll see prices kick again. I think the one thing that is happening is, that Australia, particularly the top end now, the Australian market is now in the world scale of being up there. We’ve now had 100 million dollar sale, a 71, 70, mine at 65 and a quarter. There’ve been quite a number over 50, 53, 61, 57.
Craig Pontey: So, there’ve been sales at that level which I don’t think anybody ever thought would happen. So, I think that’s been a great thing for Australian real estate. I think being around the harbour, I wear my Eastern Suburbs eyes obviously because it’s just a great place to live and to work and I think anything around the water now I think will maintain it’s value and I think will increase and I think the top end of the market particularly I think has got more growth, no matter what the market does. The reason I think that for a number of reasons, one is, most of the people buying those houses aren’t borrowing a lot of money and the second reason is, there’s been an enormous amount of money made in Australia in the last four or five years. People floating companies, businesses on the stock market. Not everyone’s made money, but there’s a big percentage of people that have made an enormous amount of money in different companies.
Anthony Denman: Regulation, industry regulation.
Craig Pontey: I don’t have to worry about that anymore. I don’t own Ray White Double Bay.
Anthony Denman: No, but I mean, there was a … back in the good old days, there was a lot of that going on, that extreme vendor and purchaser conditioning going on and-
Craig Pontey: Educating.
Anthony Denman: Educating.
Craig Pontey: There was dummy bidding going on. There’s all sorts of rubbish going on. Look, can I tell you, I think these days, it’s a lot more transparent. There’s fines now. Look, if you want to run a professional squeaky clean business, and keep your nose out of trouble, I can honestly say to you in the 31 years that I owned Ray White Double Bay, touch wood, and we had the department of fair trade down here many times, never had any issues ever. Not once.
Anthony Denman: Is it easier to do a deal now than it was then?
Craig Pontey: Is it easier? I don’t know, I think it was probably easier then than now. I don’t know why I say that. I don’t think things have changed a bit. I think the advent of buyer’s agents in the last four or five years has made a big difference. Yeah. I think that’s helped a lot. There’s some very good buyer’s agents that work out of Double Bay and surrounds now.
Anthony Denman: Would you prefer to work with a buyer’s agent?
Craig Pontey: Well, we have to now because they’re embedded into the process. Sorry, we don’t have to, but we do on an ongoing basis. They’re good guys. They bring you qualified buyers that are ready to rock and roll so you don’t have to do the qualification anymore.
Anthony Denman: How does negotiation vary with a buyer’s agent?
Craig Pontey: Yeah, you’re negotiating with the buyer’s agency, that’s why you’ve got to have a relationship with them. If you’ve got a good relationship, then the negotiations tend to be a little bit, I wouldn’t say easier, but certainly as far as fast tracking it, things happen a bit quicker. The buyer’s agent’s protecting the purchaser, trying to get the best deal they can. Obviously we are protecting the vendor, trying to get the best deal we can and somewhere in the middle, we meet.
Anthony Denman: Pretty much the same as working with the vendor I guess-
Craig Pontey: The interesting part when you’re working with a buyer’s agent, there’s not as much emotion involved as there could be with … which is a good and a bad thing depending. Sometimes, even though there’s a buyer’s agent in the mix, the purchasers still want to talk to you, which is fine, but I think it’s about … again, it’s about having good relationships because they are now embedded in the process whether the agents like it or not and some of them don’t like it. I think it’s great.
Anthony Denman: What sort of comms does a buyer’s agent get?
Craig Pontey: Mate, you need to ask them. I think it varies depending on what role they play and there’s an upfront fee and a percentage.
Anthony Denman: Is it in the order? It wouldn’t be in the order of the sales agent-
Craig Pontey: Could be. Some of it is. Yeah. Depends. Some of them work on incentive based fees. If they get it cheaper. But, as I said, I think it’s been a good thing around facilitating the process of selling real estate. I don’t think it’s a negative thing in any way, shape or form.
Anthony Denman: Could we maybe just focus on project marketing?
Craig Pontey: Yep.
Anthony Denman: A bit because we’re mostly talking about the-
Craig Pontey: Generality?
Anthony Denman: Yeah. Which is in your world, not so general. How do you see the difference between project marketing and general agency world?
Craig Pontey: It’s a totally different skill base. The project marketers need to be a lot more, what’s the right word? The project marketers need to be obviously as organized as normal sales people, but probably more. Their follow up needs to be stronger. Sometimes the process is a much longer process, particularly at the moment, because the market the last six or twelve months as you know has been difficult with off the plan sales. So, there’s a longer gestation period. We had one exchange the other day and it took us nearly six months to get it over the line. So, there’s a much longer gestation period off the plan. There’s been a whole lot of press lately as you well know about, don’t buy off the plan, the building will fall over and it’s not good. So, we’ve had to contend with all of that.
Anthony Denman: How have you been contending with it?
Craig Pontey: Mate, we’ve been a bit more fortunate than most in the Eastern Suburbs because most of the guys that we’ve been dealing with are recognized and they’ve got track records and they’re well funded and they’re not … and they’re using recognized builders, but it’s been a challenge. Don’t get me wrong. It’s been a challenge on some of the projects we’ve been working with lately. We have to sit down and explain to people who the builder is, the fact that they’ve got a balance sheet, the fact that these are all their other projects, whereas … and it’s probably because the market price wise has been sort of jagging along, like in a straight line, whereas, two or three years ago, the project marketing stuff, you’d buy something off the plan, you’d settle it in 12 or 18 months and it’ll be worth 30% or 40% more.
Craig Pontey: So, a lot of those punters were price buyers hoping for the kick in the market for the selling at the end or people that have made money buy an apartment in Alexandria for 600 and when you settle it’s worth 750. As you know, there was a lot of that happening, but yeah, look, the whole project marketing world’s changed. It’s got a lot tougher out there. Not just regulations, it’s just been the market generally and people’s perception that there’s probably not going to be as much growth going forward. The owner occupier market for us, unfortunately in the east that’s a big part of our market, has been ok.
Anthony Denman: So, if you get a site that is a great site that you just can’t buy something brand new in that location, it’s still going to sell provided it’s a high quality developer-
Craig Pontey: You still have to get a price right though. We’re spending a lot more time as you well know in making sure our marketing material is top quality and really substantial because if you don’t have that, people don’t have any confidence or credibility in the fact that you’re going to get the project done. So, we’re making sure that it’s really high quality which costs money, takes time. Look, I think generally speaking, I think we’ll start to see some growth in that project marketing market probably early to mid next year. The other thing that’s happening is as a result of it being very difficult to get funding for construction at the moment, there’s actually not a lot being built. So, we’re going to find, we’re going to come to sort of the middle of next year and everyone’s going to say there’s no stock, so all of a sudden we’re going to see that kick again.
Anthony Denman: And away we go.
Craig Pontey: Yeah.
Anthony Denman: And hopefully some legislation too on top of that that might protect some purchasers.
Craig Pontey: Yeah. Look, I think it’s probably needed. There’s no doubt about that. But, again, as I said, around here, we’ve been pretty fortunate. We haven’t had too much of that.
Anthony Denman: What’s the most successful project?
Craig Pontey: I was very lucky to work with Peter Campbell and Dave Flanagan from a company called Lindsay Bennelong ClarendonHomes. We did 285 apartments and some retail for them at a project called Advanx down at Rush Cutters bay between McLaughlin and Neild Avenue. In actual fact, I live in one of the penthouses
Anthony Denman: Did you buy it off the plan?
Craig Pontey: Yeah, I did actually. Yeah, I did. I’ve been there ten years. So, that was probably the most successful project for me and I learnt a lot. It was a big project.
Anthony Denman: Why do you think it was so successful?
Craig Pontey: Oh, can I tell you, it was the revitalization of that area. We were building … we started off building quite big apartments in Advanx like the one bedders were 60 square meters, the two bedders were 100 square meters, so they were big. We created the market down there. When I say we, Lindsay Bennelongm, those guys had a lot of foresight and a lot of gumption and it was a big punt on their part. I sold them a site originally. They bought two sites. One of them I sold the site to them. I was involved from the very early days of the planning of the apartments, I went to all the meetings and it was really fascinating. I learnt a lot actually. When the construction was on, I used to go down there, put my Wellington boots on and climb around there with their project manager. So, that taught me quite a bit.
Craig Pontey: That was one of the … my first project if I go back … that was lucky for us, it was a very successful project. We went through a time where we pre-sold a heap and then the market collapsed and then it picked up again and we were sort of adjusting prices on the way through and creating the market. I remember in the early days, ten years ago now, we were selling apartments for ten grand a meter and a valuer said, a very famous valuer said, there’s no way you’ll get ten grand a meter, you’ll get eight grand a meter. They’re selling down there at double that now and more. Obviously ten years later, but my favorite project of all time, well, Advanx is probably number one, but my second favorite project is one that I did for Lane Walker, for Walker Corp many years ago in McLaughlin Avenue. It’s called Barcom Grove. It was just about the first project marketing gig off the plan ever.
Anthony Denman: Okay.
Craig Pontey: I’ll take the fame for it. It was back in 1988 and I reckon there was no one doing project marketing off the plan.
Anthony Denman: 1988?
Craig Pontey: Yeah. ’88.
Anthony Denman: Maybe not off the plan. There would’ve been Paul Veron and John Pope and-
Craig Pontey: Yeah, all those guys doing the refurbs. So, it was 1988 and we had 50 units to sell. We were selling them for 250 to 280 grand each then. We set up a site shed. They put the scaffolding around, we set up a couple of those site sheds end to end and we had things on the wall and-
Anthony Denman: What sort of things did you have on the wall?
Craig Pontey: Oh, we had floor plans like today. Floor plans, but they weren’t as nice and pretty.
Anthony Denman: No CGIs.
Craig Pontey: No. No, there were no CGIs in those days. We had an on site finance guy there. You’re not going to believe it, the on site finance guy-
Anthony Denman: John Simon.
Craig Pontey: Very close. Was a guy called James Simon.
Anthony Denman: Right, okay.
Craig Pontey: So, James Simon is now the CEO of Aussie Home Loans.
Anthony Denman: There you go.
Craig Pontey: No, John’s nephew.
Anthony Denman: Right, okay.
Craig Pontey: James is a good mate of mine and he’s a great bloke. So, he had just started working with John then, and he was our on site finance guy. So, people would come in, we’d show them the unit and then we’d give them to him for finance. If you ever run into him and you say Craig Pontey said, mate, I was with him not long ago, he remembers it vividly like it was yesterday.
Anthony Denman: Was Laing involved?
Craig Pontey: No, a guy called Peter Dransfield drove the project for Lane who’s a lovely man. Yeah, great guy. He’s still around.
Anthony Denman: Yeah, he went to Australand.
Craig Pontey: He did. He’s still around. He’s a good bloke. Yeah, so, that’s who … I used to report to him and another guy. But, yeah, so, we sold 50 units for them off the plan back in ’88, ’89. So, I reckon that was my first … so, I’ve got very fond memories. The other thing that happened there is when we went to submit, a friend of mine worked at Walker Group at the time, so I got an … everybody has submitted, but in those days, I actually got my marketing guy to put together a bound book. I’ve still got it actually. I kept one. It was a bound book and what happened is apparently the story goes, my mate said, the team from Walker’s came in and all the submissions were on the table and I don’t know if it was Laing Walker, but someone said, gee that one looks pretty good. Mine was the bound book, not like shitty paper and they picked it up and went, gee this bloke’s got a pretty good job. Who’s he? What’s his story? I got appointed.
Anthony Denman: Classic. Well done.
Craig Pontey: Yeah, I got appointed. In actual fact, we still manage … we sold quite a few to investors. So, this is like, what are we now? Probably, jeez, 30 years later, we still manage them. Still.
Anthony Denman: Congratulations.
Craig Pontey: Yeah, still.
Anthony Denman: That’s so good – talk about a story of perseverance. You’re talking about the long game, right? That’s pretty cool.
Craig Pontey: You’ve got to do it.
Anthony Denman: Any failures that you’ve learnt from that you can-
Craig Pontey: Oh mate, can I tell you? I think-
Anthony Denman: Or a failure that you’ve learnt something from?
Craig Pontey: Yeah. Look, I think what happens is, when things aren’t going right, they’re just not going right. Sometimes you’ve just got to call it a day. A few times we’ve given projects back because it’s just not working and no matter what you do, the vendors at a certain level that you’re just not going to get to and sometimes it’s better just to part company and move on. It doesn’t happen very often and particularly the last 10 or 15, I can’t remember any that spring to mind. Most of them have been pretty good experiences. Sometimes we’ve had to hang in there for the long haul and things have been a bit difficult, but it’s all about communication. I suppose if you were doing a multi-million dollar development or even if it’s a smaller development, you want to make sure that whoever you give it to is focused 100% of their energies on selling it. If they’re not, then you want to ask the questions why? That’s the bottom line.
Anthony Denman: How do you allocate a budget for marketing a project off the plan?
Craig Pontey: Yeah. Look, it’s a tough one. In the old days, we used to say it’d be 1% of the sales value. Remember?
Anthony Denman: Yeah. One, one and a half. Denis O’Neil I think was the one and a half.
Craig Pontey: Yeah. I think with the advent now of the internet, it’s probably a lot cheaper, it’s not as expensive. It’s still expensive. But, what we do is we sit down and you’ve got to be on realestate.com, Domain.com, you’ve got to be … make sure you’ve got your Instagram set up and your website. I still think that there’s a case to be said that you need to be in print. Although, some of the developers, as you well know, don’t like it. If it was me doing a development, knowing what I know in the backend over all the years, I would still definitely be advertising in print.
Anthony Denman: Suburban print or-
Craig Pontey: Yeah, suburban print.
Anthony Denman: Or domain print or both?
Craig Pontey: Probably both. What’s happening, as you said earlier, it’s now getting a lot easier to monitor what’s happening with these things. So, I’d be monitoring where I’m getting my inquiries from. There are certain marketplaces where you need to advertise in Chinese newspapers. Not such a thing around here, but if you were doing something in Chatswood or Hurstville or in the city, in the middle of China Town, then obviously you’d need to be advertising in those publications. So, it’s a bit horses for courses. You just need to sit down and make sure you get value. The one thing that has happened and I’m sure you’ve seen this in your business, is that when these things come out, the next week the developer wants to know exactly what happens, so that we can plan for the next lot, so they’re not wasting money. Whereas, in the old days, we used to advertise and not bother. It also depends on the market. Like if you’re getting … I was speaking to a mate of mine the other day that’s got a car business, and he said he spent a lot of money advertising one week and no one turned up and then the following weekend, 50 people turned up with no advertising. So, did they read the ad and not come to the following week or did something else happen?
Anthony Denman: So, is there a general percentage you would sort of-
Craig Pontey: Yeah. Look, I think like you said, one to one and a half percent I would’ve thought is the … it depends on whether you’re setting up a display showroom.
Anthony Denman: That’s huge, right?
Craig Pontey: I’ve set up display showrooms for 150 grand and we did one for 1.3 million.
Anthony Denman: Yeah.
Craig Pontey: Just depends on-
Anthony Denman: No, that’s right. For me, that’s probably the biggest variable issue. You’ve got everything in place. You’ve got brand identity, the CGIs, all your content in place. It’s relatively formulaic in terms of what we produce.
Craig Pontey: Yeah, all that stuff-
Anthony Denman: Display suite, brochure, website, video, online marketing, print marketing.
Craig Pontey: I saw one the other day. Aqualand had a project over at Milson’s Point and when you walked in, you actually walked into a room and sat down.
Anthony Denman: Yeah, that’s that virtual-
Craig Pontey: Yeah. It was really cool, but unbelievably expensive.
Anthony Denman: Yeah, totally. So, if you could only have three things now, what would-
Craig Pontey: Oh mate, you need plans, you need CGIs and I think you need boards on who the developer builder architect-
Anthony Denman: Yeah, okay. So, the story around the … I mean, I agree. You can’t express to somebody what the architectural intent is without showing them what it looks like through CGI.
Craig Pontey: But, I think also these days, we’ve been doing lifestyle videos of the area and you just don’t know where the buyers are going to come from. I’ve seen your stuff. You guys do this stuff as well where they interview the architect and he talks about the vision and then they talk to the builder sometimes of the … I think all that stuff’s valuable, it’s just got to be succinct. The problem with most of these guys is they talk for too long like me, like they can’t help themselves.
Anthony Denman: Like talking themselves out of a sale you reckon?
Craig Pontey: Probably. I think that’s the biggest issue with sales people. You open your mouth too many times. You know when a real estate agent’s lying, when his tongue moves. But, I shouldn’t say that. Anyway.
Anthony Denman: So, I mean, reading between the lines, assuming the CGIs and floor plans and the developer’s story, you put an ad in the Wentworth Courier and some stuff online, right?
Craig Pontey: Yeah, sure. But, like your business, everything’s got a lot more professional in the last, I don’t know, five to ten years around project marketing than it’s ever been. Because people demand that excellence. If you’re not doing that sort of quality in marketing, then people don’t think the development’s going to be as good as it is. You know what I mean?
Anthony Denman: It’s so important now, especially with some of the trouble that we’ve had. I mean, Sydney and all over Australia and Melbourne with the cladding-
Craig Pontey: I think developers, they hate me saying this, I think developers need to spend more money now marketing than before to be able to create that profile around the development and to make sure you’re on the shelf, particularly when there’s a lot of stock around, you need to try and carve yourself out in a market that sometimes people … they see you as ten wide Commodores, they don’t see you as nine Commodores and a Ferrari, you know what I mean? So, sometimes it’s hard to cut the development out of the mass, if that makes sense.
Anthony Denman: A lot of that comes back to the initial planning, right? And being onboard from the very beginning and influencing the mix, the amenity and the ground plane.
Craig Pontey: I’ve been fortunate over the years. I bought things in some of the projects where I’ve sold stuff. So, it’s made things a bit easier. I’ve quite enjoyed doing that. Quite a number over the years. It’s been easy for me sometimes, particularly Advanx when I bought in there, people say, oh, what do you think of this? I said, oh well, you’ll see me, I bought the penthouse. Oh okay. I’m still there.
Anthony Denman: Mate, this has been amazing. Thank you.
Craig Pontey: It’s nice just to have a chat. It’s been like a fireside-
Anthony Denman: Yeah.
Craig Pontey: Time flies when you’re having fun.
Anthony Denman: It does, doesn’t it?
Craig Pontey: I could probably talk under water a bit more. But mate, thank you very much.
Anthony Denman: How do people get in touch with you?
Craig Pontey: Oh mate, I’m easy to find. You go to Google, Craig Pontey, P-O-N-T-E-Y, punch my name in and there it is. Or they can ring me on my favorite mobile phone number I’ve had forever, 0419404040.
Anthony Denman: I remember that.
Craig Pontey: But thanks, it’s been good fun. I appreciate it.