What ever happens I will be in there swinging and will be nimble enough to react and prosper. Exciting times ahead.

Real estate agents are going to need to focus on implementing ways that they can deliver a greater level of service, improve response times, adopt different marketing strategies, become more innovative and provide lots of evidence that they are worth every cent of their commission.

Those agents that do will be able to thrive, regardless of who enters their marketplace.

Not that I’d like to see this happen, but MHIFS if your business model continues to exist within their site due to their legal obligation under their Terms & Conditions, one way forward that I can see is to allocate service area boundaries ( say 40 km radius ) for each subscription and charge agents an exorbitant fee for uploading properties outside of their service area.

I can imagine that a 40km radius service area would have next to no impact on REA’s current subscribers. If it did, then they may be able to allocate larger areas for rural areas & the 40 kms radius for Metropolitan areas.

I’m pretty sure it’s not something that REA would really want to do, but if your business model & similar ones continue to grow in momentum, they may not have a choice.

The best way to combat this business model is to provide value for money. Based upon the average commission of $9687 I don’t think most people would consider this is good value for money. Even if it is good value, I think the perception is that it is not.

I would be interested in hearing how much time is spent selling the average house. Based on a $10,000k commission I would expect around 80 hours work.

Whilst private sellers may currently only be 1% of the industry, a 95% reduction in the average selling fee would be extremely attractive to a seller and could threaten to undermine the Australian Real Estate Industry as we know it.

‘Even with the dificulties of promoting my model we are already selling 20-25 properties per week.’

20-25 properties a week is 1300 sales per year. Assuming that you continue at this level, your annual turnover for 2010 would be approx. $650,000.00 allowing for no growth.

Now if your customers decided to use a typical agent instead (avge fee $9687.00) then approx. $12,593,100.00 would be paid out to agents. That’s $11,943,100.00 worth of potential sales commission taken out of the coffers of typical agent commissions.

Now I know MHIFS that you said previously that you focus on targeting the private seller market & the commissions I have calculated above may not be going into agent’s hands in the first place, but I’m very concerned about the growth of your business model & the other sites that will naturally come in and offer similar services throughout the Australian Marketplace.

Warning: Sticking the head in the sand & saying that it’s only a small percentage of the market is the last thing our industry can afford to do.

The sooner that agents, franchise groups & institutes sit up and take notice about how to combat this type of business model the better.

Max domain chages $250 every 28 days to private sellers in SA WA QLD & NT, they charge $500 in NSW and VIC. I also have a traditinal real estate agency that that has seperate subscriptions and domain only charges this business less than $370 pm because we have only reciently taken this subscription and traded for the past 10 years without it. Domain knows i would not pay any more. This business has 2-3 times the revenue of My home is For Sale which is charged over $5000 per month although the domain subscription has limmited benifit. If i was a shareholder of domain I would be happy here all this as they have obviously worked out how to squeese the most out of each customer.
Even with the dificulties of promoting my model we are already selling 20-25 properties per week. Why? Becuse My Home is For Sale sell properties for the highest possible price for the lowest passible cost giving the best net result. Which should be the aim of every good agent.