The Block: Behind the scenes

The popular television show ‘The Block’, after 10 seasons is a significant pillar in Australia’s renovation culture of buying, ‘doing up’ and selling property. Most of us interested in property follow the transformations as well as the contestant’s highs and lows; and this weekend will bring the climax of Season 11 when five newly renovated properties go under the hammer. We went behind the scenes with experienced campaigners Andrew McCann, Glen Coutinho and Stuart Benson to find out what actually happens in the lead up to, and on the auction day on The Block.

Setting the scene: The location of this season of The Block is the former budget Hotel Saville in South Yarra in Victoria, an octagonal eight-floor building. It has had a colourful history (including a vampire story or two) and is now also famous also for having been entered into the international list of octagonal buildings and structures; a reasonably short list. Views all the way around the building are one of the major appeals of all five newly renovated luxury apartments, thanks to some seriously hard work from this season’s contestants.

Andrew McCann from Jellis Craig has sold the properties of the previous two winning teams on The Block, Darren and Deanne in Season 10, and Shannon and Simon in Season 9. He is going for his third win, again in partnership with Sydney Auctioneer Damien Cooley. This season, they have listed Dean and Shay’s penthouse apartment on Level 5. In his third series of The Block, Glen Coutinho from RT Edgar Boroondara will be wielding the hammer for Suzy and Voni on Level 3.

Here are seven things you may not know about The Block, from an agent’s perspective.

1. You must win the listing as you would any other

If you want the publicity that goes with listing a property on The Block, it’s not a case of just putting your hand up and hoping. The contestants pick their own agents, with the TV network (Channel 9) having the final say. Coutinho says sisters Suzy and Voni found him via social media. “Their builder is a client of mine and has dealt with me before, so he recommended me to them. All three times it’s been word of mouth. If you’re not recommended, you can’t get in,” says Coutinho.

Glen Coutinho
Glen Coutinho

McCann was initially brought into The Block family by Sydney colleague and Auctioneer Damien Cooley, and they have continued their strong partnership on the show. But it has to work for all parties. “When we first started with Shannon and Simon, as much as they interviewed me, I interviewed them back to make sure we were going to fit together,” says McCann.

“When you’re going into a television series as an agent, you want to make sure that the product is going to be one that is going to be popular. [With Shannon and Simon], I met with those guys a couple of times at the construction site, thought that they had good style. They were open to collaboration, too, they were interested in my real estate feedback and how I viewed the market in the area of Prahran, which is where we were.

“Then from designing that selling solution, we got chosen as the winning couple by Darren and Deanne for the following series. And from there we received calls early in the piece from contestants of the current series.”

2. While you see massive crowds on TV at the Open Day, the real number of buyers is much smaller.

On the public ‘Open Day’, there are around 15,000 people that view the apartments, but this day is more for the show than for the real buyers. Says McCann, “We’re there to support the program to make sure that we’re there welcoming people and assisting them on the day. We really don’t see a whole lot of buyer interest in those days.”

Andrew McCann
Andrew McCann

McCann continues, “I think if you’re a serious buyer looking buy a product worth upwards of a million dollars, you probably don’t want to queue for four hours to get your opportunity to look through with several hundred other people. Most people want to connect with the agent. Some of them want to do it off-camera. That’s why a lot of the buyers advocates represent certain parties on auction day.”

The other complexity is that interested buyers are usually looking at the whole building, so you need to be able to qualify which apartment is the preferred one. Says McCann, “The key is to try and understand and qualify buyers to figure out – are they investors looking for value buys, or is there any emotion that can be attached to the property? That helps to determine how you mark, pick, and choose your order of sale. That has been quite important in the last couple of years.”

3. You need staff, and a lot of them to run a successful campaign

How many people would staff a regular Saturday open? One, two maybe? On The Block, you’ll need a few more. Says Coutinho, “We had about 16 staff there on Sunday at the public open, one in every room, one on the door, and four downstairs in the tent, so we were pretty busy. But we’ve done it before, so we know how it works.

“It’s a great networking opportunity for us to meet 15,000 people and the media coverage is pretty good for your brand.

While it’s good for branding to be on TV and a different type of project from the norm that staff like to get involved in, the advice would be don’t even think about taking on a Block listing unless you have the staff to handle it. Says Coutinho, “Sometimes you need 14 staff, and sometimes there is just two of you. But there are a lot of hours involved and a fair commitment to doing the job, it’s not just a normal campaign. You can’t just turn up and hope it works.”

“But, you have to be a bit more selective about who you follow up because out of 15,000 there is only a handful that want to buy. So you have to dig a bit more to find out who the right ones are,” he concludes.

Some of the team from realestatebookings.com.au on open day
The team from realestatebookings.com on open day

4. You have to work closely with your competition

There are two main reasons you need to be able to communicate well with the other agents – to co-ordinate opens for the serious buyers and also to send the right messages with respect to price.

Says Coutinho, “You have to work with the other agents and not against them. We compete with each other every day of the week… but in this case you have five properties opening at the same time in the same place; so it’s different. You need to make sure that the messaging is consistent.”

McCann agrees that good communication is needed to gain efficiencies in the process. “The first year we got involved, we would try and coordinate inspection times so we could all be there at once. Rather than meeting the same buyer over four different days and affecting our business weeks, we work together. It’s important, again, to try and share information. Some agents might hold a little bit back, or they try and benefit their contestants, which is fair in the game – certainly regarding where interest is being developed, and trying to manage the price. Because the reserves are never disclosed to us, and we don’t know what we are necessarily chasing as a target, there is a need for the agents to work together a little bit. It also helps [if we] give the feedback to the production team around the campaign progress.”

5. It’s a ‘reserve’, Jim, but not as we know it

Reserves on the block are a particularly confusing subject. Reserves are set by the production team, and there may be a ‘game’ element involved, for example, the contestants can elect to fix an aesthetic or functional problem in a particular room or take a set amount (for example $10,000) off the reserve (even though they also do not know what the reserve will be). Obviously this adds complexity for everyone to the standard auction process. Also, unlike a ‘normal’ sale, the reserve may be set lower than market value, because the profit for the original vendors comes by way of the other means in and around the show.

Stuart Benson, Corporate Spokesperson for Domain. 7th July 2015
Stu Benson

Stuart Benson, of Domain Group and Benson auctions, has been involved in previous seasons of The Block and explains how tricky the reserve aspect can be. “In any auction, the reserve is paramount to ensuring that you are steering buyers in the right direction, so those who turn up on auction day are legitimately in a position to acquire the property. But, the reserve is often something that’s held by the production company up until the day before. That’s got to do with filming, scheduling and presenting the whole production. Up until that point the reserves are announced and the agents come out of that shroud of mystery, they just have to do their due diligence, like they do with any other property. They need to make sure that they are talking to people that are interested, and have contracts issued to them, just as they usually would.”

Then you have to put that to the back of your mind a bit and rely on the basics. “Agent’s have to rely on the traditional skill set; making sure that the buyers do have their finance ready, do have access to funds, are committed and ready to buy on auction day. So it has to be treated like any other auction. So, while the bright lights are on and the camera’s are rolling, they have standard auction terms to do it by. If you remove the lights, camera, action, it is an everyday sale, and these guys do this every single day of the year,” says Benson.

Says McCann, “Concerning giving buyers advice around value, we literally can’t. We can give them advice on what we think [the properties] might be worth. Last year we were promoting the properties upwards of one and a half million, but all the reserves were well below that, which is a bit the opposite of what a general selling campaign might look like.

“I think for a lot of [the contestants], the hard thing is that there’s no rhyme or reason in regard to how some of those products are received by the market. One year, a couple walked away with close to nothing. Then others, like last year, did very well. There’s obviously some significant upside, but there’s also that risk factor of the properties not being popular or the reserves might be too high.”

6. The marketing campaign mostly like any other

The selling campaign is mostly like any other, where the agents design the marketing based on things they would normally do for that type of listing. “We are in the market for a fortnight before that public open day,” says McCann, “So we manage the selling campaign over a four to five week period. We manage it as we would for any other traditional property that was going to auction. It’s advertised online. It’s advertised in print. We look to just design the best selling solutions for our clients.”

“From a Jellis Craig perspective as a director and a principal,” says McCann, “I say that it’s a good marketing opportunity. From a cultural point of view for our business, our team take pride in the fact that our brand is one that’s considered to be on television and that we’re often selected for some of the better product on The Block. Our team get right behind it and enjoy the process because it’s something that’s a little bit different to our day to day business. Having won the last two series and being chosen for this one does give us some sense of a competitive edge to demonstrate that we’ve got some skill and some ability in managing a selling strategy.”

7. No pressure, but no room for error

Game day arrives. Are you nervous? No, says Coutinho, with a chuckle, to him, it is just like any other auction. “Normally I do seven maybe eight auctions on a Saturday, but this weekend I’ve blocked out the afternoon, so I will do two auctions in the morning and then go straight to The Block, wait until it’s my turn and then I have to go off and do a couple of others. So back to a normal Saturday after that. In the past, it’s been done in the evening, so it’s been more of an event, but this has just become a normal Saturday the way they have set it up.”

But you have to be prepared, and equally you need to prepare your buyers for what is about to happen . “It’s a bit different because you are being filmed by a dozen cameras, so you can’t ‘stuff it up’ – there is not much room for error on a TV show, plus they do like a bit of drama!

“And,” he continues, “You have to train your buyers on what to do before the auction. Because [for them] there is no point waiting [to bid], there are no ‘passed in’ negotiations, it has to be done under the hammer. So when someone registers for this auction, you need to explain all of this to them.”

The number of people present at the auction is usually very small, says Coutinho. “If you’re going to be there on Saturday have to register and sign documents and waivers, so you’re probably not going to come just to sticky beak. We expect 20 people to turn up and three or four who bid. Lots of people say they are going to bid but don’t,” says Coutinho.

While Cooley handles the hammer for the Jellis Craig team, McCann says any game day nerves are not really about the auction, but about making sure you get a good result for your contestants. “You don’t necessarily know what the outcomes are going to be in that environment. For them, they’ve put a lot of blood, sweat, and tears into [their work]. You do create relationships. I’ve got a really good relationship with all the couples that we’ve worked with. So, you do get a bit nervous for them.”

What you need to take away – the need to wear multiple hats

Domain.com.au has been a massive supporter and sponsor of this season of the show and Benson says that no matter who wins, it has been a great success. “The ratings prove that Australia’s interest in property is still very much at the top of viewing habits when it comes to television viewing, and their focus on property. The updating/renovating of property is still very much in the vernacular of what people are interested in and doing.”

Benson also points out that there is a good lesson for all agents there, regarding being able to wear multiple hats and look for ways to improve property value, as shows like The Block make people more receptive to the suggestion of making a few improvements to get that premium price. “Agents not only wear the hat as the property marketing expert and digital marketing expert; but they are also ‘stagers’, thinking about de-cluttering and styling. All of these little trends, colours, splashes here and there, they can open the buying pool considerably when it comes to taking a property to market.”

There will be plenty of interest in these apartments on Saturday. Buyers advocate Peter Bozinoski of Vertical Real Estate, who will be bidding for a client on Saturday said, “You don’t have many opportunities where you can buy a property that encompasses a whole floor, 225 square meters. It’s a unique opportunity for an investor or an investor owner occupier to buy something of this calibre. It’s been furnished, everything’s done, and there are fantastic depreciation benefits from a tax strategy point of view as well.

“We are looking at several apartments, each one on every level offers something different in with finishes or floor plans. From a body corporate point of view, you only have to deal with five owners which is also good!

“There is not a lot of this type of stock around, and it would have an attractive rental yield for an investor.”

The “Blocktagon” auctions will be held this Saturday with the winner announced next Wednesday. We wish everyone involved – agents, auctioneers, contestants and buyers the very best of luck.

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Samantha McLean

Samantha McLean is the Co-Founder and Managing Editor of Elite Agent and Host of the Elevate Podcast.