Where is the value in modern-day Australian Real Estate?

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This weeks guest article is from Michael Atwell


It is no secret that the internet has changed the face of how we do business. For most industries the buying (or selling) process has been simplified – streamlined in a cost-effective way to deliver greater value. But who is getting the value?

If you look at the travel industry, internet sales have simplified the process for airline companies, accommodation providers and car hire companies amongst others. Cutting out the middle man. The agent, has enabled these industries to deliver cheaper prices to customers while better managing costs and growing the scale of their business. It’s a win-win situation for the buyer and the seller.

Even TV stations are considering an automated approach to how television advertising space is bought and sold. The automated process would allow for more cost-effective management of the buying process – another win-win situation for the advertising space buyer, and seller.

It seems a logical step that the same cost-effective approach apply to the Real Estate industry. Why should all of the benefit of the internet fall into the laps of the agents – surely our vendors and buyers are entitled to a slice of the savings the internet brings?

With the amount of information that is now freely available for the consumers, the sale is now largely made prior to the physical inspection.

As it stands, Real Estate is the only consumer industry that manages to command percentage fees on selling prices. In an era where average agents will gradually be squeezed out by the internet, it’s a wonder the most costly agents have not been first on the chopping block!
A typical real estate transaction takes between 4-10 productive hours to complete and generates a return before advertising costs of say $12,000 (based on 3% commission on a $400,000 property). That’s $1200 per hour! Surely those numbers are unsustainable in any modern consumer-based industry?

Of course, traditional agents will maintain that they spend endless hours marketing themselves and the properties they sell and that cost has to be factored in. Marketing costs are successfully factored in to prices in every other industry without charging percentage commission fees so why should Real Estate get special treatment?

The reality is agents spend most of their time prospecting for new clients and they show considerable favouritism to purchasers who are also resellers simply because of the commission value. Relying entirely on the commission structure also means agents don’t get paid until the sale is made – which can lead to less scrupulous agents pressuring vendors when an offer is made. This pressurized, cherry-picking approach demonstrates that a commission only based fee structure has many real estate agents aiming to deliver value to themselves first and not the property seller.

Surely now is the time for the internet to deliver value to property owners and buyers by facilitating a process whereby properties can be bought and sold in the same way travel accommodation or flight seats or even used cars are bought and sold – a fixed price or fee for service and let our customers determine the level of service they require like other true professions.

Michael Atwell

Role: Business owner, wheeler dealer
Follow me: Twitter , Linkedin

Michael has been a real estate agent for nearly 20 years for both residential and commercial agencies. He currently owns property related businesses real estate development, traditional real estate agency practice, discount online real estate agent, www.forsaleforlease.com.au and a holiday accommodation business. Although new to the online space is now fascinated with how to apply new technologies to his businesses and ad value for his customers.

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  • Mac
    Posted February 25, 2011 at 9:39 am 0Likes

    Idea for a thread
    Will ‘barn’ auctions take-off in Melbourne? & What about online auctions?
    What is good/bad about them?

  • Peter Mericka
    Posted February 25, 2011 at 12:38 pm 0Likes

    I built http://www.SLOD.com (see http://www.slod.com/Real-Estate-Information/About-Us.aspx) as an example of what can be achieved when real estate sales are approached in an holistic manner.

    As a lawyer, I am able to provide full legal advice to my vendor clients, prepare their sale documents, conduct negotiations based on client instructions and guided by legal and ethical considerations, then complete the conveyancing transaction post sale.

    I am able to provide this service at a fixed fee because I have eliminated the unnecessary elements of a real estate sale transaction, while exploiting the benefits of modern technology, which are shared with the client.

    The future of real estate sales is not in having the transaction chopped up into pre-sale conveyancing, real estate agency services, and post-sale conveyancing as has been the model followed since the 1920’s. Rather, the future is in a simple, safer and more transparent one-stop-shop service provided by a person with legal qualifications operating for a fixed fee.

    At present the “Olde Guard”, consisting in Victoria of the REIV, the Law Institute of Victoria and Consumer Affairs Victoria, are trying hard to prevent the modernisation of the industry, but change will come. It’s just a matter of how long it will take to arrive.

  • Vic
    Posted February 25, 2011 at 1:27 pm 0Likes

    One of the most controversial posts this year and no one commenting? We were, in our office, trying to work out why this is so.

    – are there some home truths here that agents, CRMs REi’s feel hit the mark?
    – has the truth of the industry being exposed in this way make the industry squirm?
    – are agents in denial as to the true state of their industry at present?
    – does the accusation of pressurized cherry picking have some merit?
    – has the real estate industry including the portal industry been asleep to the threats emerging?
    – is the era of commision based on sale price coming to an end ?
    – are home owner private sales really the growing industry ?
    – will realestate.com.au flush out every non full service agent from their site ?
    – are the good operators (agents) just waiting for the industry to self rationalize- with the weak falling by the wayside?
    OR- is Michael self promoting, thereby being snubbed ?

  • Vic
    Posted February 25, 2011 at 2:43 pm 0Likes


    You are self promoting too:) No problems with this as it cerainly is an option. However, the real issue is with the agents themselves. They will not being going anywhere soon. There is too much invested in the system that we have in this country- or for that matter around the world.

    I’m really interested in how the agents, representing the 50,000/70,000 sales consultants and staff are going to address the realities. That is the sale numbers have probably halved since the GFC (no one can give me the data for Australia notwithstanding that Alistair Helm was able to, in a flash, give the info for new Zealand), and further sale numbers’ reductions are on the cusp of occuring in 2011.

    The REI’s and Franchisors are being cheekily misleading in presenting and promoting “positive” piecemeal data on median house prices with out comparative sales volume numbers.

  • Matthew N
    Posted February 25, 2011 at 4:41 pm 0Likes

    Vic do you have any figures to support this drop of 50%? I haven’t noticed any difference.

  • Peter Mericka
    Posted February 25, 2011 at 5:47 pm 0Likes

    Vic, what needs to be understood here is that the current real estate industry is unsustainable, and it persists only because it is a cash-cow for other interests.

    It could well be compared with the crisis in the Middle East, where inefficient and self-interested regimes have been propped up by those who benefit from them.

    In the case of the real estate industry we have the print media and the real estate portals promoting, supporting and benefiting from the real estate industry monopoly. We even have so called “vendor adovocates” who tell consumers that they have the skills to choose the best agent (whatever that may mean) in return for a cut of commission. And then there are the spruikers, such as Greg Vincent, Aaron Shiner and others who profit by encouraging real estate agents to take courses in maintaining the status quo (for a particularly grubby example of this see “The Real Estate Marketing Summit” at http://www.reamsummit.com.au).

    Continuing with the Middle East analogy, imagine if real estate consumers demanded and won the right to list their properties on http://www.realestate.com.au and http://www.domain.com.au without being forced to use a real estate agent. Consumers could advertise and sell their properties, eliminating the real estate agent entirely.

    Why does this not happen? Because the industry is too powerful. It has business links, political influence, media presence and has also infiltrated the Law Institute of Victoria and rendered it little more than a lap-dog of the REIV. Even Consumer Affairs Victoria is in its orbit.

    Will the real estate industry endure in its present form? It can’t, and the cracks are appearing. This posting by Michael Atwell is one.

  • Peter Mericka
    Posted February 25, 2011 at 5:49 pm 0Likes

    Sorry, the URL for “The Real Estate Marketing Summit” mentioned above is http://www.reamsummit.com.au/

  • Vic
    Posted February 25, 2011 at 6:14 pm 0Likes

    Matthew N,

    I said “probably”.

    The point is that I don’t know the numbers. No national body has released them and no indiviual State has done so to enable an aggregation. Here’s the question – what have been the residential sale numbers, annually, since and including 2006? Can anyone fill in the blanks.


    What area of Australia does your agency operate in, Matthew ?

  • Peter Mericka
    Posted February 25, 2011 at 7:17 pm 0Likes

    Hey guys, have you ever stopped to think about how much the average consumer cares about your stats? Do you really think they care about sale numbers, median prices, percentage drops etc. etc.?

    You’re so out of touch.

    Consumers want value for money, that all. And you can’t deliver.

  • Glenn Batten
    Posted February 25, 2011 at 9:25 pm 0Likes

    ho hum.. the article and most of the comments are just a self promoted troll. and there is no surprise who turned up for a spray.. Mr Real Estate Agent himself.

    Thats why there is little interest in this.

  • Peter Mericka
    Posted February 25, 2011 at 9:44 pm 0Likes

    It’s shame you decided to trash what had the potential to be a very interesting discussion Glen. But so be it.

  • snoop
    Posted February 26, 2011 at 8:22 am 0Likes

    This is valid
    When i look at ever increasing signboard penetration in Brisbane of GOGECKO an agency that promotes a flat fee of $5950 from memory the game is changing.

  • Tatiana Mijalica
    Posted February 26, 2011 at 9:34 am 0Likes

    For a vendor that has decided to sell themselves, there is value in the FSFL/SLOD model as they receive the assistance they need to move through the process.

    For a vendor that has decided to use an agent, there is value in the current marketing property marketing system where they receive the assistance they need to move through the process.

    Simply put, I think that both business models can co exist together and it is up to the vendor. I don’t think that real estate agencies will make a huge impact on the FSFL/SLOD model, nor will SLOD/FSFL make a huge impact on real estate agencies.

    Whether a vendor chooses to use an agent or to sell themselves, they would have given their decision thought and decided what they feel is best for them, their particular circumstances AND the type of home they are selling.
    One size never has and never will fit all.

  • Vic
    Posted February 26, 2011 at 11:29 am 0Likes

    The game is changing, by necessity, because the size of the pie has diminished. When the size of any pie shrinks the feeders off it are affected. Now, the point about trying to determine statistics on sale numbers is to try to determine how far the pie has shrunk. Median prices are not an indicator of pie sizes.

    When the industry is bouyant and everyone on it feeds well- where is the need for change? – None.

    No one seems to be able to answer the question on the sales trends since 2006 and with all due respects Tatiana, a single year snapshot tells me nothing. Now getting back to the thrust of the article.

    The internet has allowed initiatives for new business models to emerge and for some traditional models to innovate. The two obvious trends to me comes in the increased power of the seller and of the buyer.

    (I hate using the words consumer when referring to sellers- they are not consuming their own product – their house. To use the word consumer in a service based product is to place an overemphasis on the value being provided by the service provider. Call them clients, yes consumers NO)
    The sellers awareness has been heightened to the options available through the net and the information that comes therefrom. This now means they can make more considered decisions on how they will go about selling their home. And more importantly to them they can make value judgements of the services provide by agents versus what ever else is available.

    The buyer, is now more discerning, through information readily available on the net and generally is driven by their affordability situation.

    So, to have selling options is good and the selling options are expanding as the internet users reach saturation point.

    All these options can all be found on the internet and are ever expanding, with the following being the main groups

    Traditional Commisioned Agents- non franchised
    Traditional Commissioned agents- franchised
    Traditional agents on flat fee
    Agent supported private sales
    Private sellers/direct to buyers
    Lawyers real estate

    In my view it is the top two groups who will be under the most pressure if the size of the pie continues to diminish. So, clear and honest publication of these stats by the REI’s is critical to the survival of the the groups they purport to support.

  • Peter Mericka
    Posted February 26, 2011 at 12:43 pm 0Likes

    Now that there is some genuine debate taking place, here’s a different perspective on the artificial FSBO vs Agent view of real estate sales.

    ALL vendors who sell through real estate agents are FSBO vendors. That’s right, real estate agents do NOT sell real estate at all. The sale is not finalised unless and until settlement takes place, and any number of things can happen between the day of the deal and the day of the sale.

    The real estate does no more than introduce the parties, for which he or she is paid a commission. If the vendor then elects not to proceed with the sale, and agrees to allow the purchaser to walk away, the real estate agent is still entitled to the commission. Thus, real estate agents do not rely on sales, they rely on commission-generating introductions.

    Furthermore, the real estate agent does not represent the vendor at any stage of the transaction. The agent is merely a conduit between the vendor and the purchaser. It is the vendor who makes the decision to accept an offer, it is the vendor who signs the contract, it is the vendor who signs the Transfer of Land document, and it is the vendor who receives the proceeds of the sale on settlement day.

    The lawyer and the conveyancer have the role of assisting the vendor to progress the transaction toward the point of sale, and to assist and advise the vendor along the way. If the purchaser breaches the contract, it will be the lawyer or the conveyancer who advises the vendor as to whether or not the purchaser should be pursued and the contract enforced. While this is going on, the real estate agent is already off seeking fresh listings.

    When real estate agents talk about FSBO as opposed to using an estate agent, they are really talking about a vendor who chooses not to have a real estate agent arranging advertising or conducting inspections – neither of which demand any special skills.

    This false claim that real estate agents actually “sell” real estate, or “represent” vendors is why there is such confusion over the concept of Lawyers Real Estate and the online facility at http://www.SLOD.com .

    Consider this – the only person who can perform EVERY task associated with the sale of real estate, providing an holistic service that starts with initial legal advice and concludes with delivery of the sale proceeds to the vendor, is the lawyer. As for FSBO, unless the vendor appoints a representative by way of a Power of Attorney or a Principal & Agent agreement, ALL real estate sales are FSBO sales.

  • Tatiana Mijalica
    Posted February 26, 2011 at 2:18 pm 0Likes

    Again with the sweeping statements. I disagree that the agent is just a conduit between the vendor and the purchaser or that it is a false claim that real estate agents actually

  • Robert Simeon
    Posted February 26, 2011 at 2:33 pm 0Likes

    If you turn up to work everyday thinking that the world is not changing – then of course you are in for a rude shock. When I look back at how fast the industry is changing it actually invigorates and makes it all the more exciting. Like everything in life there are different models which is good as it identifies an ongoing freedom of choice.

    The most important thing in real estate is that we will always be judged by our results and our business models. I seen plenty come and go …. which applies to new and old businesses a like.

    Keeping your business at the forefront is what makes it so much fun. One should not forget there are leaders and followers – what happens next is when you decide which category your business falls into.

  • Robert Simeon
    Posted February 26, 2011 at 2:45 pm 0Likes

    Maybe this is the answer?

  • Peter Mericka
    Posted February 26, 2011 at 3:17 pm 0Likes

    OK, the current business model stinks, and most real estate businesses fall into that category. Where to now Robert is the question.

  • Vic
    Posted February 26, 2011 at 6:25 pm 0Likes

    Peter, why do you feel the need to have one or the other, black or white, and use negative sledging to support your arguments? Robert is right in fundamentally saying that all models can coexist. It is up to the owner of the model to make it compelling enough to attract clients.
    Re-inventing one self is good but it doesn’t need to be changing a model.
    Similarly the model of forsaleforlease has it’s strengths, provided that the service backs it up and is another optio. Michael shouldn’t waste energy on sledging traditonal agents. ( 20 years as a traditional agent did you OK Michael)

  • Glenn Batten
    Posted February 26, 2011 at 11:03 pm 0Likes

    Because he has never been able to accept that other people are right as he wrongly assumes that means he would have to accept he is wrong. He simply has no empathy, no ability to view from any other perspective other than his own.. oh yeah.. and he is a troll with a huge ego 🙂

  • snoop
    Posted February 27, 2011 at 7:22 am 0Likes

    One of the main reasons why 80% lurk on boards like this is fear of being put down by the know all alpha posters.

  • Ross
    Posted February 27, 2011 at 9:09 am 0Likes

    No one has really highlighted the following…

    Traditional R/E = Success Commission.
    List x20 homes and sell x4.
    x5 the amount of work for each sale.

    Fee for Sevice = Pay as you go
    Charge everyone for everything.
    Although, it’s cheaper for realistic sellers.
    Most sellers prefer FREE until sold.

    In addition… what about buyer agents?

    The model will evolve but no one is
    100% right. Discount agents, marketeers,
    traditional seller agents, buyer agents, etc.

    Some good, some bad.
    Some cheap, some very expensive.

    Either way… every state and market is different.

  • Peter Mericka
    Posted February 27, 2011 at 10:30 am 0Likes

    Put as much spin on it as you please, but an industry than allows under-educated and poorly qualified spruikers and salespeople to charge the equivalent of $1200 per hour for unnecessary “services” has something very wrong with it. That’s what this posting is about.

    As lawyers are the only ones who can take the entire transaction from start to finish, those who wish to conduct such transactions should become lawyers or get out of the industry.

    Call it “black or white”, call it egotistical, call it what you will. It’s the obvious solution to a rotten real estate industry.

  • Tatiana Mijalica
    Posted February 27, 2011 at 11:29 am 0Likes

    This is just your opinion and not a fact.

    If you were to speak to the seller of Ilyuka, I believe that they would consider the $1200 per hour as you suggest the best investment they made all year. So good in fact, that they backed in about with additional funds for an extensive marketing campaign that was well advised for this property. The result was a sale price of $26 million and an ecstatic new owner.

    What would your advice have been? Take a few photos with your digital camera, put them on a few internet sites and do your own OFI

  • Peter Mericka
    Posted February 27, 2011 at 11:32 am 0Likes

    Spinning like a top Tatiana.

  • Vic
    Posted February 27, 2011 at 11:57 am 0Likes

    Thanks for the link Tatiana.

    The data quickly shows me that since 2006 the sale numbers HAVE REDUCED by around 30%. This means clearly that we are in an industry recession and the factors to get us out of it do not seem evident for 2011.

    It is difficult to determine whether this is a shortage of demand or a shortage of supply. I posed on a previous post that it appears a combination of buyer/seller behaviour is taking place here. Buyers waiting for the prices to come down further before entering the market, and sellers waiting for prices to rise before placing on the market.

    Several factors that confirm the state of flux in our market place are:

    – During this period portal traffic is steady or increasing
    – the key indicator of leads per 1000 visits is on the decline.
    – FSBO is on the increase
    – more flat fee agents coming into the maarket
    – traditional agents are having difficulty gaining VPA
    – commission rate declining

    The “sale” pie HAS shrunk, which is allowing new inovation and new models into the property selling/advertising market and this will accelerate during the next twelve months.

    The beauty of our market based economy is that the consumer and suppliers jointly make the market so: In 2011, I predict

    – more flat fee agents will emerge
    – Real Estate Agents staff numbers will reduce by 30%
    – FSOB will continue to grow and increase to around 20% of all sellers
    – Traditional Free to list Portals will survive albeit through taking on FSBO clients,
    – Lawyers real estate franchises will not take off (due to lack of lawyer interest)
    – a new search system will emerge to threaten REA and Domain dominance ( maybe a return of Google – or some other along their original intent)

    Sorry you are leaving the discussion Tatiana- you are always great value.

  • forsaleforlease
    Posted February 27, 2011 at 1:08 pm 0Likes

    I am not sledging other agents. I am just trying to protect my right to continue offering a different service, by defending my businesses right to hold an REA subscription. I

  • forsaleforlease
    Posted February 27, 2011 at 1:32 pm 0Likes

    It is unlikely I will have much time next week to contribute further to this discussion as I will be getting flogged by my own lawyer at $550 per hour to help me defend my right to continue to hold an REA subscription and overturn my pending REA subscription cancelation.
    A Solicitors product is to write letters they are paid buy the hour to produce letters. If they resolve the dispute quickly and for less cost are they rewarded? No quite the opposite they are paid more for taking longer. So subsequently are incentivised to not get the result quickly. Maybe there is a business opportunity for you here Peter before tackling the Real Estate Industry.
    I shouldn

  • Tatiana Mijalica
    Posted February 27, 2011 at 1:45 pm 0Likes

    Great point Michael!

    In VIC, Marshall White have rolled out that option with http://www.twoday.com.au as there was a clear need for it in their marketplace with properties under $1 m. They have a

  • Peter Mericka
    Posted February 27, 2011 at 2:30 pm 0Likes

    Tatiana, you cannot provide legal advice, draft Section 32 Vendor Statements, negotiate contracts and draft special conditions, then complete all aspects of the conveyancing transaction in addition to marketing the property, and do all of this for $4,400. If you could, you would.

    Instead, you pretend to “sell” real estate when all you do is place ads, push contracts (prepared by lawyers or conveyancers) in front of hapless consumers, and snatch a commission when you’ve secured a set of signatures.

    References to new “models”, “concepts”, “strategies” etc. is just real estate agent talk for dressing the wolf in different clothes.

  • Bill
    Posted February 27, 2011 at 2:35 pm 0Likes


    All strength to you with you fight. I do have a question regarding http://www.forsaleforlease.com.au. I notice you charge $399 + $99 per month which I’m sure is excellent value. However I noticed at the bottom of your page logos for other portals and assume they are the portals your customers properties will be listed on.

    One of those is AllHomes which primarily targets the ACT & regions but is now venturing further a field.

    Am I correct in assuming that if I was to list an ACT property with http://www.forsaleforlease.com.au for $399 + $99 per month it would also be listed on AllHomes.

    The reason I ask is that my investigations show that if I elected to list a property for private sale on AllHomes it would cost me $800+ so your price seems excellent value but difficult to fathom.

    I hope you can find time to confirm or clarify my understanding please.

  • Tatiana Mijalica
    Posted February 27, 2011 at 3:35 pm 0Likes

    I do not sell real estate nor am I a real estate agent.

    I am simply drawing conclusions from your services list: http://www.lawyersrealestate.com.au/realestate/costs/default.asp#1

    Most of the

  • Ryan O'Grady
    Posted February 27, 2011 at 6:27 pm 0Likes

    Peter, your listings are still on REA http://www.realestate.com.au/buy/by-reocro/list-1. Perhaps you can provide some advice to Michael

  • Ross
    Posted February 27, 2011 at 7:01 pm 0Likes

    $1,200 per hour ???

    $1200 per hour x 8 hr day = $9,600.
    $9,600 x 6 days = $57,600
    $57,600 x 50 weeks = $2.88m

    Wow… I didn’t realize how much
    money each real estate salesperson
    was making in Victoria. Every real
    estate salesperson from around Australia
    is heading to Victoria on Monday morning,
    once I upload this post.

    Victoria = Utopia
    It sounds like the lawyer does everything
    in Victoria and all I need to do is line-up
    the buyers. It’s the perfect world.

  • forsaleforlease
    Posted February 27, 2011 at 7:51 pm 0Likes


    Portals typically charge agents a set monthly fee for limitless access. If they give open access to private sellers like All homes and Domain they will typically be expensive for private sellers direct as to not upset their main clients. Traditional agencies.
    It does not need to cost what it does to sell a home, but traditional agency practice is well entrenched and many industries depend on it staying the same. It will require broad public awareness to break this down.

  • Vic
    Posted February 27, 2011 at 8:10 pm 0Likes


    We treat forsaleforlease as an agent and free list it. I assume that Allhomes does the same.
    In which case, for the time being, allhomes are doing free to list outside of Canberra as they try to grow their presence to an Aust wide portal.

  • Bill
    Posted February 27, 2011 at 8:31 pm 0Likes

    Okay let me put my question in a more simplified form as I think my original post was too long and convoluted.

    If I list my “ACT property” with forsaleforlease and pay $399 will it be featured on AllHomes.

    Just a yes or no will be fine.

  • forsaleforlease
    Posted February 27, 2011 at 8:38 pm 0Likes



  • Bill
    Posted February 27, 2011 at 8:45 pm 0Likes

    Thank you for clarifying that for me.

  • Peter Mericka
    Posted February 28, 2011 at 8:59 am 0Likes

    Tatiana, you’ve made a huge mistake in pretending to be an unbiased commentator, when in fact your business relies on real estate agent patronage.

    Your comments are false, self-serving and dishonest.

    As a former journalist you should know better – shame on you.

  • Tatiana Mijalica
    Posted February 28, 2011 at 9:36 am 0Likes

    Again, I disagree with you. And it is you that should be ashamed, not I.

    It has nothing to do with patronage, your service is overinflated and not value for money.

    FSBO is value for money.

    A simple search on the internet shows the real cost of your services should a consumer wish to do things for themselves.

    The legal side of what you cover surely can

  • Glenn Batten
    Posted February 28, 2011 at 11:55 am 0Likes

    Peter’s research skills don’t seem that great 🙂 Did you have a career you did not know of Tatiana ?

  • Vic
    Posted February 28, 2011 at 12:07 pm 0Likes

    Or perhaps Tatiana has an interest in “Legal Kits On Line” 🙂

  • Ross
    Posted February 28, 2011 at 1:38 pm 0Likes

    Peter you said… “Put as much spin on it as you please, but an industry than allows under-educated and poorly qualified spruikers and salespeople to charge the equivalent of $1200 per hour for unnecessary

  • Warren
    Posted February 28, 2011 at 2:42 pm 0Likes


    For an educated man, your argument and comments are well and truly uneducated, misguided or simply self serving.

    Anybody with a fundamental understanding of economics, accounting and business will be able to explain to you the basic economic principal of competition. Supply and demand and the impact on price! Your theory on commissioned agents being pressured as the market shrinks should be seen as a good thing from your persepctive.

    You may also be surprised Peter that this occurs in every industry, not just real estate. The end result is fewer “service” providers and the strong operators with a value proposition, determined by the client / consumer (not you), survive. Perhaps this is why you have entered the real estate arena!!!

    I believe your comments in such forums is purely for the sake of being published, argumentative and lacks the most basic understanding of the business world and more importantly the real estate industry.

    Such is the purpose of such online media and free speech; so knock yourself out, comment until your heart is content and I look forward to your entertaining response.


  • Peter Mericka
    Posted February 28, 2011 at 2:59 pm 0Likes


  • Peter Mericka
    Posted February 28, 2011 at 9:41 pm 0Likes

    Excuse me Peter, but it looks as though some comments have been deleted. What gives?

  • Peter Mericka
    Posted March 1, 2011 at 8:50 am 0Likes

    Hmm, it looks like censorship has caused this discussion to be killed off. Peter Ricci, perhaps those who have gone to the trouble of contributing to this discussion should be told why you’ve taken a hatchet to it.

  • Ryan O'Grady
    Posted March 1, 2011 at 9:33 am 0Likes

    Peter Mericka, would you like to explain what you’re going on about?

    Business2 does not censor or remove comments, our core policy is for everyone to have their say. Sometimes comments are automatically sent to spam if they include spammy content or links. This is checked frequently and non spam comments are placed back on the site.

    There is nothing in spam.

  • Vic
    Posted March 1, 2011 at 9:52 am 0Likes

    Earlier in this discussion I floated the suggestion that the real estate industry is in “recession” and has achieved this dubious honour of being in gradual decline since 2006. I also want to make the point that Traditional real estate agents have , as a group not changed their basic business model to account for this recessive climate and for the life of me cannot understand why.
    Perhaps Andrew’s “Alegory of the Cave” article on this forum gives the clue.

    Real estate agents are not necessarily loathe to make change, they are simply constrained by the puppet masters from doing so. The franchise owners who feed self serving information, the REI’s run by non market oriented people with beuracratic bent and the REA’s of the world who monopolize the eyeballs on the internet.

    I love our “market” sytem of doing business and love seeing the struggles and jockeying that occurs when things get tough, and tough they are and tougher they are going to get.

    So, in the time that I have been involved in this industry I have spent many hours over many months interviewing key personel, movers and shakers, luddites and leaders.
    What I have found is a rich diversity of real estate selling models that have either emerged from a germ of an idea, evolved from a traditonal base or have addressed productivity/efficiency in their traditional.

    What I have been most impressed with is that on each of the cases, that innovation is obvious, all have been driven by the change in consumer attitude and subsequent behaviour. Sad to say the best innovations have come from non franchised agents.

    They have been able to move quickly to what the public want- low cost selling, and if anything is going to stem the flow of public to “self sell” their homes, it will be the speed at which the franchised bodies also move in this, low cost/flat fee direction.

  • Glenn Batten
    Posted March 1, 2011 at 1:26 pm 0Likes

    Peter Mericka….. Business2 does not censor..unlike your own blog and facebook page where you are constantly deleting any opinion that does not follow your own. You are the definition of censorship.

    What’s that word again when you claim someone else is doing something bad that you yourself are doing?

    Your a lawyer who was forced to gain his real estate license all the while bagging real estate agents and claiming you would never get your license.

    Your arguments are misguided and illogical and you rarely add anything to the discussion and you prey on people with negativity and sensationalism as a marketing strategy.

    I dont agree with lots of positions posted by others here but they constructively add to the discussion and provide a balanced views from different perspectives. . You on the other hand stand alone and are IMHO a waste of space. You dont want to contribute to the discussion you want to dictate it. If there is a way I could self censor you and remove you from the comment stream when I view it then I would. Thankfully my scroll mouse means at best your posts are a flick or two and they are out of the road.

  • Peter Ricci
    Posted March 1, 2011 at 2:38 pm 0Likes

    Hi Peter

    I have not and will never censor anyone. 2 comments so far have been censored out of 9000 or so since this blog began. Those two I actually contacted the commentator and told them why and in both cases it was for over the line personal smearing.

    In both cases the person was thankful I did as it would have opened them up to legal action.

    As for our blocking system, anything m ore than two hyperlinks will mark it as pending my approval or if the spam protection catches it. I login at least 5 times per day to clear any comments out.

    So comment away 🙂

  • max
    Posted March 1, 2011 at 8:22 pm 0Likes

    Peter M’s comments speak loud a clear…

    “an industry than allows under-educated and poorly qualified spruikers and salespeople to charge the equivalent of $1200 per hour for unnecessary

  • Vic
    Posted March 1, 2011 at 9:11 pm 0Likes

    There is one big problem with perpetuating the myth that agents get $1200 per hour. Has anyone ever heard of an agent selling at the rate of one property per hour, even in the most bouyant of markets ?

    And the other myth is the 3% rate- which agent charges this commission and gets away with it ? Don’t let the real facts get in the way of a good story.

    ps I am not an agent- never have been and never will be. Just hate to see a myth repeated often enough and becoming the reality.

  • Bill
    Posted March 1, 2011 at 10:00 pm 0Likes

    I’ve followed similar threads on this forum that discuss the merits of a vendor using an agents services to assist in selling a property against the option of an owner selling the property themselves or even using the services similar to those that PM provides and I really struggle comprehending the anger that is generated.

    As a property owner over 30 years of property ownership has sold several properties, some I sold myself and some I used the services of an agent. All transactions were completed to my satisfaction.

    I always understood that if I used an agent I would be contracting their services to introduce a buyer to my property and walk myself and the buyer through the process of completing the transaction. I’ve contracted agents to sell via auctions as well as listed negotiable prices. I don’t recall ever feeling as though I was being ripped off by agents and always felt their services offered value for the money I paid.

    I’ve sold two properties as a private seller, from memory the reason I did that was I felt I had a good grasp of property values at the time and the properties were in very good condition, I also sensed they would sell quickly. Although it was some time ago I don’t recall either sales process being stressful.

    I’ve never used a flat fee service but wouldn’t have any concerns about doing so if I judged it to be a value strategy at the time.

    So what I am suggesting is that from a vendors viewpoint there is probably room for all sales methods and surely the industry can accept that without anger or vitriol creeping into discussion.

    Having said that, I do think that private sales and flat fee sales will become more accepted methods of selling a home by vendors and smaller agencies will struggle to survive the changes the Internet is bringing.

  • Glenn Batten
    Posted March 2, 2011 at 12:38 am 0Likes


    I think you might be misunderstanding the position of a few people.

    Agent assisted, discount no frills and FSBO sales are all valid options for a seller. Most good agents have no problems with them at all and for many they are a great source of listings. A seller who has tried selling their property themselves and failed is often the client that best respects what you do when you do sell their home.

    If a seller has the time and skill to sell their home then why shouldnt they do it?

    For some people FSBO and agent assisted sales will be a great option and I have even genuinely recommended some owners to those methods when I felt it applicable. But for most traditional real estate agents are still their first choice. Maybe this wont last forever but it certainly will not change overnight either. Real estate practice is getting more complex as legislation is getting more complex so I have no doubt it will evolve but how long and what to is anyones guess but I am betting it wont be lawyers selling real estate that will be the norm….

    I like many others believe that right now these alternative options have their niche and they need to carve it out as best they can. I even have a mate who is running a non traditional model.

    There are really two issues that always cause contention on here. Most people recognise that choice is good.. but some individuals are that myopic that they believe that their business model is the only business model that should exist and everybody else has it totally wrong. Concentrating on their own strengths whilst failing to recognise their weaknesses, and the threats and strengths in your competitors is a quick road to failure.

    Now I understand passion and belief in your own business… but the crap that spews out to make themselves and their own business ventures look better is far from professional.

    The second area of common contention is that non traditional agents want access to realestate.com.au. The crux of the issue here is that realestate.com.au has always been a portal for traditional real estate agents. They have never entertained FSBO sales and with the support of the agents the site is the most popular real estate based website. As the difference fsbo and traditional real estate agents has blurred with the rise of some of these Agent assisted websites some of them snuck onto the portal. Realestate.com.au has removed them and with changes to business models some have been allowed back on. Realestate.com.au position has never shifted in that you must be acting in the role of a real estate agent.

    For me the biggest problem is the inconsistency by realestate.com.au in applying their own rules. Either the rules are enforced or they are changed and then enforced.

    Think about this… In many parts of NSW Domain is more popular than realestate.com.au but you dont see anybody complaining that private sales are allowed on that portal.

    Man has always wanted what they cant have. An operator of one of these alternative options once said to me that he whilst he wanted to be on the realestate.com.au he really didnt care that much just as long as the application of the rules were consistent and that his direct competition, being other alternative option also were in the same boat.

    But some people want into our members only playground because right now it has more kids wanting to play on the slides than the other “public” playgrounds. That is how its always been and despite some fanciful claims agents (and even ex agent and now coaches) are not putting pressure to keep them out.

    It is a free country so by all means FSBO and agent assisted sites should petition realestate.com.au to let them in…. but dont whinge about conspiracies should they choose status quo

    If all the many (and their are many) fsbo and agent assisted websites out there banded together and created a portal just for themselves they would create quite a force…… Lets say one day it got more popular than realestate.com.au do we really think they would open themselves up to real estate agents listing on the site when that happened.

  • forsaleforlease
    Posted March 2, 2011 at 8:01 am 0Likes

    To suggest some of these agent assisted web sites

  • Bill
    Posted March 2, 2011 at 8:38 am 0Likes

    Thanks Glenn, I now understand exactly where you are coming from.

    “The second area of common contention is that non traditional agents want access to realestate.com.au. The crux of the issue here is that realestate.com.au has always been a portal for traditional real estate agents”

    In the ACT over the last several years Allhomes have built themselves to be the dominant portal in the ACT. That dominance is so powerful they charge agents “SEVERAL HUNDRED DOLLARS PER LISTING” to list a for sale property on their portal. And a pretty high fee to list a rental property. On average there are between 10,000 to 12,000 properties transferred each year in the ACT and about the same in rentals. Some basic calculations show that Allhomes revenues are huge relative to the area they operate in.

    Allhomes also allow private listings and from what I can see charge around $900 per listing.

    Those fees may seem high but Allhomes are so dominant they advertise that:

    “100% of people looking for a home search Allhomes, it’s the only marketig you need”

    and here’s a sample promotional ad that the agents didn’t exactly embrace:


    (sorry it’s on facebook and login may be needed)

    Some local agents have become nervous about the Allhomes dominance, they now see allhomes as having total control over their businesses and at the same time observing allhomes encouraging sellers to use private means to sell their property.

    This dominance has seen a high proportion of agents from the ACT and surrounds band together and invest in their own portal as a cooperative. They are about to launch a media blitz in the ACT to introduce the brand.

    I’m making you aware of this as an indication that agents who see themselves as “the golden goose” for portals can also turn on those portals they judge are abusing them as clients.

    I have no doubt that REA’s main revenue source generator is the listings agents place on their portal and they would be very brave indeed to try and alter that model.

    The message I see ACT agents sending to allhomes and any other portal who is watching is

    “you can be one or the other but you can’t be both and expect our support.”

  • Vic
    Posted March 2, 2011 at 10:58 am 0Likes


    I know that the ACT is of particular interest to you and that no doubt you are right about the power of agents (in the ACT) to make change happen.

    I will believe that, the ACT agents who are about to launch their new product, are acting in the best interests of their clients ( sellers), when they have a platform to free list or small subscription for unlimited listings. If the idea is to make huge money from a portal based on an ACTcentric model, it will be “war on” and the market leader usually wins.
    Notwithstanding this comment, Allhomes seems to be struggling to become relevant in all States. In Tasmania it must have cost them all of their $1m loan/grant to market on Television in the way they did.

    However, the broader argument is surely about the seller/buyer and where and how they can access information on the total property market.

    The portal that can come up with the means of providing every property for sale in Australia, on a platter for searchers, is the one that will emerge as the winner. Domain understands this. REA may be positioning themselves in this direction with http://www.property.com.au

  • PaulD
    Posted March 2, 2011 at 1:41 pm 0Likes

    Vic, I don’t understand, what do you mean about property.com.au it has been exactly the same for at least 5 years or more, just a copy of realestate.com.au ?

  • PaulD
    Posted March 2, 2011 at 1:47 pm 0Likes

    sorry Vic, there are a couple of agencies, that when you click on them it that take you directly to their websites. That’s definitely different to the last time I looked at property.com.au. Nestoria does a similar thing but not exactly the same.

  • Bill
    Posted March 2, 2011 at 3:07 pm 0Likes

    If the idea is to make huge money from a portal based on an ACTcentric model, it will be

  • Bill
    Posted March 2, 2011 at 3:09 pm 0Likes

    The portal that can come up with the means of providing every property for sale in Australia, on a platter for searchers, is the one that will emerge as the winner

    Vic, Why does google ring in my ears whenever I hear that kind of talk 🙂

  • Vic
    Posted March 2, 2011 at 3:11 pm 0Likes

    Paul D,

    I knew it had been around for a while and in different hands before REA took it on.

    Can you find anywhere on the property.com.au site where it does not allow private sellers? I couldn’t find any reference to it.
    Also did you notice the different search bar function. Similar to the “new trends” of finding properties by key words, but still has bugs in it.

    And as not all clicks on agents take you to their website there may be an extra charge for taking to agent web sites?

    If REA were to branch out, to private sellers, couldn’t this be the vehicle they use? (Just questions from a bumb-arse.)

  • Vic
    Posted March 2, 2011 at 3:27 pm 0Likes


    You are on a good thing with the cooperative and as I said the power of agents will win out if their motives are purely about giving the public better options. I know that you have done a lot of work with this thing and would hope that the model that emerges just doesn’t follow the “traditional” portal model.
    Because, the public needs simpler search tools, and as you know in the end public power trumps all.

    Good luck and love to talk to you some time about a search idea we have.

  • PaulD
    Posted March 2, 2011 at 6:46 pm 0Likes

    Vic, I had a look on property.com.au, at one of the suburbs that we are active in, and out of the 429 properties available for sale, the three fsbo properties that were there last week, only 2 remain, the buyMyplace property ( the one that is 30% overpriced) is no longer there, however the other two are, but no logos showing. There were exactly the same number on realestate.com.au however in different order. The feature properties have no precedence over the other properties. It looks like the search default is chronological order, but there is also a choice of price, both ascending and descending as well as by suburb alphabetically. When you click on some of the offices, they send you to their own website, and it looks to me, that happens when the agent website was developed by realestate.com. That is just a guess, because there were instances of two franchised offices of the same franchise, that had different results, so I’m not sure what that means. Property.com seems like a live backup to me. If something happened to realestate.com.au, they could direct traffic immediately to the alternate site, assuming they use different servers.

  • Glenn Batten
    Posted March 2, 2011 at 10:10 pm 0Likes


    You said “To suggest some of these agent assisted web sites

  • Glenn Batten
    Posted March 2, 2011 at 10:25 pm 0Likes

    What’s going to be interesting in all of this is why agent assisted websites are being targetted. I have read the policy and I think its fair but like anything it can be interpreted in many ways or degrees.

    If REA is just insisting that these websites continue to follow the rules then I dont see much wrong with it. Stay on the right side of the line and you will be ok. Now I am sure nobody is going to come on here and say “ok, I cheated and put properties on my lowest “marketing only” plan on to realestate.com.au and I got caught”

    But what about another alternative. IMHO the real competitor the agent assisted websites are the FSBO websites. They both attract the same seller… that is the traditional private seller.

    What if REA is preparing a FSBO portal?. The FSBO website would allow FSBO websites and agent assisted websites to list their property. Once all the private sales are in the one place it would generate quite a lot of traffic…. REA could charge a flat per property fee.

    Why a flat fee? Because these websites list property all round Australia and because of the numbers involved it would provide more revenue for them than having an all you can eat style model applicable to an individual agency who operates in just a suburb or two.

    Now I reckon overall this would be a great idea for everyone and provide them a central website for the public to find private sales. Think about it as a buyer.. If you had two websites to view to find your dream home and each had different properties on them would you check both of them out?

    If they are changing the line in the sand to push some of these business from one portal to another that might cause them some issues though.

  • Bill
    Posted March 3, 2011 at 10:17 am 0Likes

    “Now I reckon overall this would be a great idea for everyone and provide them a central website for the public to find private sales.”


    I have absolutely no doubt at all that this is how it will pan out, it’s the only way it can whilst ever dominant portals are charging real estate agents to list properties.

    The only caveat I would put on it is if Google come back onto the scene with a free to list for all model.

  • Vic
    Posted March 3, 2011 at 11:24 am 0Likes

    It won’t be google coming up with this model, Bill.

  • Juan Gonzalez
    Posted March 3, 2011 at 11:40 am 0Likes

    Can you find anywhere on the property.com.au site where it does not allow private sellers? I couldn

  • Vic
    Posted March 3, 2011 at 1:47 pm 0Likes

    Something I’ve seen tried through google and some of the vertical search engines but found wanting because it has an element short of being perfect.

    I’d just want to get some feed back on how long do you think it would take for the public to accept a new FREE system that provides access to EVERY single property that is for sale or rent in Australia.

    Would the public be so inured by their existing options that they wouldn’t change?

  • Bill
    Posted March 3, 2011 at 5:17 pm 0Likes


    I’m sure you know that if you could nationally market and brand it to within an inch of it’s life it would be accepted very quickly.

    There is no stronger brand than REA and Domain nationally but in the ACT they are irrelevant. Why? Because REA spend nothing on local media and Domain rely on the Canberra Times Saturday lift out and who reads the Canberra Times.

    AllHomes keep their brand out there, provide the service and kick ass.

    How do you propose achieving national brand awareness for such a portal?

  • PaulD
    Posted March 3, 2011 at 6:27 pm 0Likes

    The question is ” Why would you want every property in Australia on one website ?” Who does it benefit ? The buyers don’t want every property in Australia on one website because they are not looking to buy in every location.
    After all, the buyers are the ones that you are after. Say for example every property WAS on one website. You still have to refine your search based on State, and location within that state. Buyers do that now. If there was only one website, that is immediately a monopoly, and you would be paying monopoly money to be on it. I believe that is highly undesirable, because you then leave all the control in too few hands. From what I can gather, what’s happening in the ACT is undesirable for the people in the ACT – nobody else cares, but you would if you lived in Canberra. That’s why there seems to be some activity there trying to reduce the monopoly.

    It all makes sense from the outside looking in, but the big variable in that situation is the agents themselves. It would be a very rare experience for a group of agents to work together for the common good, but nothing is impossible. The problem is the egos, the vested interests, and the highly competitive nature of the real estate business, that hates to see change that may benefit the opposition (a bit like politics really) I’ve seen many situations like that, and what seems like common sense, often doesn’t happen because of the feeling that someone else is getting the better end of the deal. Don’t be surprised in Canberra, if nothing changes – even though from the sound of it – change is desperately needed. ( I don’t come from Canberra)

  • Vic
    Posted March 3, 2011 at 9:56 pm 0Likes

    Who’s talking about a group of agents working together and who’s talking about “website”?

    Google was not a website and it almost got there. The next generation will be similar but different.

  • Bazza - Back to basics or get out
    Posted July 22, 2011 at 6:02 am 0Likes

    NEWSFLASH – GoGeko Australia in Administration – Same thing happened in GoGeko in NZ when they had a downturn a few years ago- These discounting agencies rely on high volume sales – with sales volumes reducing by 45% makes it very hard to break even. Wages and salaries are one of the highest costs in an agency. Web sites like REA are now price gouging using data supplied by agents.

    Its back to basics boys – Its not all about who can do it the cheapest – its about providing good service, value for money and TRUST – which appears to have disappeared over the past 15 years because of the boom.

    Anyone who thinks they can sell a property by providing very little service during a recession, reduced sales and increasing listings will go back to being a solicitor or bank manager.

    Bazza – (Owned a successful RE Agency during the Recession we had to have 1980’s/1990’s)

  • Sal Espro
    Posted July 22, 2011 at 9:45 am 0Likes

    Peter, Can I suggest this is a new thread that should be headed something like, “Go Gecko Gone!” Bazza, it does point to the fact that we need to look at all options for saving costs & decreasing time spent though, don’t you think?

  • Ryan O'Grady
    Posted July 22, 2011 at 11:26 am 0Likes

    Thanks Bazza………….perhaps you should have stepped in as the new CEO!

    Here is a thread we can continue the discussion through http://www.business2.com.au/2011/07/go-gecko-going-going-gone/

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