Interview with the 2023 Property Auctioneer of the Year: James Pratt
James Pratt is a world-class real estate auctioneer — but not for foreclosures or tax deeds. No, Pratt auctions luxury homes. He holds over a hundred sale-price records, including the record for the highest sale price for an auction in California, Australia, and Sydney. He’s auctioned more than 11,000 properties over his 12-year career, and he’s won the REB Australian Auctioneer of the Year Award in 2019, 2020, 2021, and 2023.
PropertyOnion.com sat down with Pratt to talk about his real estate career, his advice for investors, and his insights on the U.S. property market for 2024.
Due to higher interest rates, inflation, and pandemic-related changes in people’s lifestyles and workplaces, Pratt thinks the rapid home value increases we saw over the last few years are a thing of the past.
How Pratt Got Started in Real Estate
Pratt started by getting his diploma in real estate and land economics at university. After graduating, he worked at a small Australian auction office, which encouraged him to compete in the country-wide Novice Auctioneers Competition (NAC). “I kept moving up from division to division and ended up becoming runner-up for all of Australia,” Pratt said. “That was the point where I thought, ‘Hey, I can be an auctioneer.’”
In 2010, Pratt became a full-time auctioneer at McGrath Estate Agents. In 2016, he became Head of Auctions Australia and International for the real estate franchise group Raine & Horne. Now, Pratt auctions luxury properties around the world through his own company called JPA Group, which he opened in 2017.
Pratt’s Predictions for the U.S. Real Estate Market in 2024
When asked about where the U.S. real estate market is headed in 2024, Pratt said that he anticipates a slowdown. Due to higher interest rates, inflation, and pandemic-related changes in people’s lifestyles and workplaces, Pratt thinks the rapid home value increases we saw over the last few years are a thing of the past:
“We’re going to see more like maybe 1% to 3% growth in some areas, while other areas might grow 5% to 8%, such as Florida. But on average, I think it’s going to be a slow burn and not too much of an increase overall.”
Pratt also added that some areas are encouraging real estate investment more than others. For example, Los Angeles introduced a so-called “mansion tax” that went into effect on April 1st. It adds an additional 4% tax on properties that sell for $5 million or more, and 5.5% for homes that sell for $10 million or more on top of all the other taxes and fees associated with selling a property.
Pratt explained that if you have a property listed in the high four millions and your realtor does a great job negotiating someone to five million or more, you actually have to tell your realtor that it makes more sense to take a lower offer, because if it goes over five-million, you would pay more in taxes.
As Pratt pointed out, the “mansion tax” is a bit of a misnomer since, in California, a five-million-dollar house could be anywhere: “Whether it be in Studio City, Santa Monica, or Bel Air, the mansion tax affects people who want to get that family house.”
Pratt believes generative AI will be a real game changer for agents.
Where Pratt Sees the Greatest Impact of Generative AI on Real Estate
We also asked Pratt for his thoughts on how generative AI tools, like ChatGPT, will impact real estate professionals. He said that he’s already seen low-hanging fruit applications, such as agents using it to write social media posts and property descriptions.
“However, where I think the real potential is going to be is if generative AI can start to identify market trends, such as rental increases in certain areas, potential leads for listings, and where the most in-demand areas will be based on trends,” Pratt said.
Once that happens, Pratt believes generative AI will be a real game changer for agents because it’ll help them create more strategic approaches to listings and canvassing areas for clients, ultimately allowing them to work smarter, not harder.
If you’ve got a clear goal, it’ll be really easy to find what you’re looking for.
Pratt’s Advice for New Real Estate Investors
According to Pratt, to become a successful real estate investor, you first need to have a clear goal. Whether that’s to live in a property, turn a bank loan into a tangible asset to get another loan, or simply park some money in a stable investment, you need to be sure why you want to invest in real estate in the first place. “If you’ve got a clear goal, it’ll be really easy to find what you’re looking for,” Pratt said.
From there, you need to ask the questions: What are the property taxes in that state? What’s the upkeep? What’s the rent return? What’s the market doing? Are people starting to leave or is it a market with industries coming in? For example, “Oracle moving to Austin, Texas, says that there’s activity, jobs, and infrastructure coming in, and this may be a good place to invest.” Pratt said, “Education is key.”
We also asked Pratt for his advice on how to network in real estate: “Look for property events, go to open houses, and start getting a feel for brokers and how they work. It’s free! You can always just go and say, ‘Look, I’m not investing in the next six months, but I want to get an idea of the market.’ You’ll start to build relationships that way.” You can also go to free events sponsored by real estate offices and property auctions.
In addition, Pratt recommended joining online property groups that provide some type of upskill or data, such as groups that list auctions, sales, or closing results. (Interested in the latest Florida foreclosure and tax deed auction results? Register for a free PropertyOnion.com account).
A recent high school graduate from Asia had come to Australia with $200 million that he received from his parents as a graduation gift. To get back at his older brother who had gotten $400 million for earning better grades, the boy wanted to buy up as much Australian land as possible.
Pratt’s Favorite Property Type, Craziest Real Estate Story, and Mentoring Success
At the end of our chat, Pratt told us about his favorite property type. “I love beachfront homes,” he said. “The value that you get with different waves, sunrises, and sunsets every day is pretty incredible. But also, you get to see the creative ways people utilize a beachfront property — whether it be the gardens or a cliffside track to get down to the beach. People have got to be creative to make it work.”
When asked about his craziest real estate story, Pratt talked about a time when he worked at Raine & Horne Group. A recent high school graduate from Asia had come to Australia with $200 million that he received from his parents as a graduation gift. To get back at his older brother who had gotten $400 million for earning better grades, the boy wanted to buy up as much Australian land as possible. “He came out, and there were helicopters flying over remote parts of Australia finding these remote cattle stations,” Pratt said. “It was a wild ride for about a week.”
Lastly, Pratt talked about a time he met a young student in Sydney getting his real estate diploma. Pratt mentored him and offered him advice once or twice a month, and now five years later, he heads up one of the largest commercial property agencies in France. “It’s nice to see,” Pratt said. “We speak all the time, and he just sent me a picture of his Ferrari.” Needless to say, the man’s real estate education really paid off!