As a follow up to Dave Platters excellent, well articulated post on why anyone “is dreaming” that they can beat real estate.com.au, it made me revisit an idea I had a few years back. I think for the most part Dave is correct, however there is something that needs to be done about property content origination.

To me it has always been about control, if you go back to the early days on business2.com.au I wrote passionately about how agents will pay a price for putting all of their eggs in one basket and relying on one company for their web, marketing and portal needs, and it has pretty much played out in that manner. REA are top dog in many regions of Australia and can rightfully state their number one position. Agencies online property marketing budgets today are pretty much controlled by realestate.com.au and domain.com.au, annual fee increases continue at a clip and the limitations of each agents plans are pretty silly to say the least!

Realestate.com.au is all powerful because they have the listings and consumers will of course go to where the listings are. Consumers also know how to play with realestate.com.au and for the most part it is their favourite tool for browsing for real estate, domain certainly have the numbers on mobile devices but the browser is still king and this will not change in the short to mid term.

REA can pretty much do what they like with pricing, they are the market leader in an industry that is one of the most popular search pastimes in Australia, if you are an agent and you do not list on REA you will pretty much lose listings to other agents that are and REA had a brilliant strategy for agents early on, almost blackmailing agents into going for bigger packages. I lay much of the blame for this with real estate institutes who accepted ‘donations’ from REA in the early days to endorse their portal and put them in front of an eager audience – you!

The REA XML has also become somewhat of a de-facto standard for listings and pretty much all portals accept an REA XML feed to list with them.

If agents and competing portals want to to take that control away and place it back to agents they must do all of these things listed below pretty much in their entirety. Will they do this? Almost definitely not, but it is worth revisiting.

Open Source Listings System

Domain.com.au and all other portals, franchise groups, private agencies and private listing portals (yes they MUST be included) should band together and finance an open source system for managing property data. This must be fully inclusive, and that means REA can also use this system.

It must be built on open source infrastructure, be W3C compliant and define every single element useful to todays real estate agent. The system must have no stakeholders and be open to anyone. The system must be simple to sign up, simple to use and built on an open framework that can have multiple contributors. This would be controlled by a board of developers that have a wall of separation between them and any interested parties.

Agency
Agencies simply register with the system and are given a few tabs to work with (My Agency, My Portals, My Developers, My Apps). They manage all of their staff and can import their current listings into the system and the system takes care of the rest. They select what portals they want to be involved with, can give access to their web developers and can login and manage this information from their desktop, tablet or phone device.

Portals
Portals simply join the system and offer their portals with their standard terms and conditions clearly set out in the system. This will allow any agency to simply check a tick box to allow their data to be shared by that portal. If the portal is free then it simply starts the data transfer and updates instantaneously once changes are made to the data. If it is paid for then a simple code would need to be added to the system.

Developers
Web Developers are given tools to develop websites using this data and be given everything needed to do this effectively, including plugins, sample codes. Agencies can assign web developers to manage their web development by simply ticking a box next to that developer and that developer will have interface access to all they need to develop websites and applications for that agency.

Apps
Any product or service can offer their applications to agencies, be it, mobile phone apps, tablet apps, CRM software services etc. These apps can be free, paid or subscription based. Think of it like the Apple App store.

Cost + Revenue

Yes, to build this and maintain this service would be expensive, but nowhere near what agencies currently pay for the same services. The Real Open Source Community (ROSC) would be funded by annual verification. Initially it would need to be funded by portals and franchise groups with no strings attached (tall order) for two years from launch, but once launched each agency, portal, web developer, app would be encouraged to become verified, this verification would be a community trust system.

The annual report and all expenditure would be open and annual verification fees determined by the previous years revenues. This would ensure that the system was always in the black. The system would also have a constitution drawn up that can only be amended if 75% of all verified users voted up for that amendment – in other words each verified member has an equal vote.

ROSC Constitution

Part of the constitution would be that the data is owned by the listing agent and the text, photos, videos etc would be the copyright of the original author. Any breaches to this constitution would have impacts for any of the members. The terms and conditions that each portal, web developer and app developer disclose would be standardized, so agencies know the pricing, annual increases, sold data information etc from the beginning and as it is standardized there is nowhere to hide little clauses

Private Listing Portals

These would be treated just like anyone else. Yes, I hear you say this is a bad thing, complete nonsense! Over the next decade more and more people will list privately, it will take decades for this to become a powerful movement, and by this time agencies would have adapted their business models to suit It is important because they are an important part of the potential market for all agencies.

Original Sin

The reason for this system would not be too knock off any of the leaders, it would simply be to open the originator of the content and give control back to the agency, the people who create the content. REA and Domain would have access to the system just like anyone else and it is highly likely they would still be the dominant players in the market for the foreseeable future.

So, do you think that portals would get involved, do you think franchise groups would get behind this, even though not one of them will own one snippet of the system?

Domain last week released it’s first entry into the realm of iPad apps and it appears to be an awesome app at that!

The app is of course available free and bears no resemblance to the boring, slightly useful but very slow iPhone apps released previously by Domain and REA. This app makes searching for property for sale, rent, sold and share listings intuitive, fast and interesting.

The user interface is map based and you’re immediately greeted with a map of your current surroundings (presuming you allow the use of location services on your iPad) along with the properties around you for sale marked on the map and listed down the right hand side of the screen. Each listing is shown on the map with a location marker and properties not showing an address simply come up in the property summary area. Showing property locations on a map can sometimes be very confusing when you have say 10 units for sale in the one complex. Many systems will simply have 10 place markers and most will become hidden and therefore useless. Fairfax has addressed this by showing on the one place marker how many properties are available at that location and by pressing on the location marker you are given a list of the addresses and prices with a link to each property.

You can change to search for rentals, sold listings or share accommodation at the top of the screen and can refine listings via price range, features, property type, land size or inspection details at the bottom left of the screen. By pressing twice on the property summary a detail page opens up covering the map with all property details much the same as the property detail page on the web and you can save multiple properties as favourites to reference again later. From the property detail page you make an email enquiry and view photo’s and floor plans.

This app will help to make agents uploading listings without addresses a thing of the past. With tools for sorting by inspections and the ability to genuinely follow listings around the streets you like, agents will now; more than ever before need to ensure full listing details are uploaded to guarantee the highest possible exposure to buyers/renters. Possibly for the first time, a buyer/renter could plan their day house hunting directly from mobile technology.

I love the layout of the user interface and if I was having an app designed to showcase our listings today I’d be replicating a lot of what is in this app (there’s a hint for Peter & Ryan). The app seems to be genuinely optimized for displaying results on the iPad; it’s fast, clear and eye catching.

What are you going  to come out with REA? It better be good because Domain has a great head start here!

You can download the app on iTunes or visit it here.

We should first look at how Realcommercial.com.au became to be the force in commercial real estate across Australia. Back in 2006 as reported on Business2 Realestate.com.au acquires Propertylook REA purchased Propertylook. A few months later Fairfax purchased CRE Fairfax purchased CommercialRealestate.com.au (from long time B2 contributor Glenn Rodgers).

Both CRE and Propertylook were successful commercial portals, however the way REA structured the purchase of Propertylook made it a whole lot more attractive than CRE. The shareholders of PropertyLook were the 4 major international commercial agencies including Colliers, Jones Lang LaSalle, Knight Frank and CBRE. As part of the sale of their portal to Realestate.com.au, these four agencies committed to a 5 year minimum advertising spend with REA. Although these contracts were not 100% exclusive, the minimum advertising spend for REA didn’t leave much less to be spent on other portals.

This was an excellent strategic move by REA, as not only did they lock in millions in revenue (far more than the cost to purchase Propertylook) but they also blocked stock and revenue to their major competitor CRE. To make matters worse for Fairfax, REA has rolled Propertylook into Realcommercial and relaunched it off the back of the Realestate.com.au technology. This is in contrast to Fairfax who are still using the original CRE platform and have basically ignored any enhancements in technology to CRE.

As a result of ignoring the need to invest further in the development of CRE, Fairfax paid the price “again” early this year when the Realcommercial agreements with the big 4 groups ended. Three of the groups including Colliers, Jones Lang LaSalle and CBRE appear to have re-signed with Realcommercial (for another 2 years I’ve heard), once again locking CRE out of advertising revenue and much needed CRE stock.

So Fairfax have missed the boat in the online  (they have a large print presence) commercial real estate space on 2 occasions now, helping launch Realcommercial into the position where they are at the moment.  But recent events in this space indicate that Fairfax may have a foot back in the door, and smaller portals a larger piece of the pie.

New Competitors – Over the past couple of years we’ve seen new entrants into this space:

• Realestate1commercial.com.au
• Commercialview.com.au
• Realestatecommercial.com.au
• Primesite.com.au
• SeekCommercial

Although these new entrants do not have the listings and traffic of Realcommercial, they are making traction with their SEO and presence within the market. Most of them are free to list or charge minimal fees, making them a viable extra place to market listings.

From a recent Realestatecommercial.com.au press release:

Real Estate Commercial are moving in the right direction with their commercial portal website, which has now reached 50,000 monthly unique browsers and over 1.4 million monthly page impressions.

Commercialrealestate.com.au has a facelift – a few weeks ago CRE rolled out a well overdue facelift. Although the site still uses the original ASP CRE platform, there are some great enhancements which have been made. Most notably is the new CRE search tool which replaces the previous slow and clunky search. The site looks and runs a lot smoother and the functionality is a lot more streamlined.

My bet is, that this CRE makeover is only a temporary solution as I wouldn’t be surprised if Fairfax are currently rebuilding CRE and piggy-backing off the technology used to power Domain.com.au.

Minimum Advertising Spend Broken - As reported above, its my understanding that only 3 out of 4 major players have resigned with Realcommercial. If you look at CRE you’ll notice their stock has jumped over the past fortnight, as Knight Frank are now marketing all their properties on CRE. Although Knight Frank are still listing with Realcommercial, it would appear they have not renewed their minimum spend agreement and are branching out to other online places.

The REA Stigma – Realcommercial appear to be suffering from the same anti-REA stigma which Realestate.com.au has, resulting in commercial agents looking for alternative options. From what I’ve heard, commercial real estate agents are equally dissatisfied with Realcommercial as what their residential counterparts are with Realestate.com.au.

This is definitely a space to watch over the next 12 months as its becoming a whole lot more competitive. What are your thoughts?

RPData have been working on a valuation system similar to US portal Zillow in the USA where they provide a valuation to consumers.  Naturally this has upset real estate agents and valuers alike around the country. There are a couple of differences though but the primary one is that Zillow clearly identifies that the prices they provide are just estimates by calling them “Zestimates”.  Statistical guesses if you will.

It seems that RPData has removed the references to the word valuation since their launch but they still imply it with the claim ”Want to know what a home is really worth?”

This AVM (Automated Valuation Model) application is a feature on the RPData facebook fan page and allows anybody to track 3 properties for 6 months.

Really Worth??  …are they sure??.. because they contradict themselves when you start  using it with this additional information later in the process.

 This estimate is computer generated and is not a professional appraisal. It uses complex modeling which includes property attributes, recent sales information and other data elements to reach an estimate of the property value and possible value range. The model also provides an estimate of how confident the value tracker is likely to be based on the availability of key data elements such as the attributes of the home and depth of recent sales data.

This estimate depends on information relating to the subject property and other properties which may be incomplete or wrong, negatively impacting the accuracy of this estimate. This estimate is based on one or more statistical models and assumptions, which may not capture all relevant factors or features of the subject property. This estimate also does not take into account the potential impact of external factors (such as a change in the economy, future planned infrastructure or environmental contamination on the subject property), which may affect the value of the subject property. Accordingly, this estimate should not be relied upon by you or any other person, including when making any decision in connection with this or any other property.

We at RP Data value your feedback and our Data Integrity Team are on hand to correct any property data. Please send us an email with the property address and its full attributes to Customercare@rpdata.com and we will assist you.

You just have to look at the recent Optus decision to see just how outrageous claims in marketing hype cannot be protected by the fine print. RPData’s competitors, Pricefinder and APM quickly distanced themselves from such tactics.

The AFR article also covers most of the old ground from the previous two articles for those that missed them plus raises a few issues that we have covered on Business2 already such as the success the ACCC has had with realestate.com.au after complaints by the  agent assisted websites.

More interesting though is the reference to the Redfin model that Ben raises in the article.

Just like I did in the last article on the ACCC investigation  Ben draws similarity with how realestate.com.au and Redfin (http://en.wikipedia.org/wiki/Redfin) both have contact with the seller to sell advertising on their portal.  But Ben takes it a little further and more in line with a persistent rumour doing the rounds though the industry at the moment that states that realestate.com.au is looking more directly at the Redfin model, specifically the whole idea of commission sharing. This is of course countered by the numerous statements by Greg Ellis recently that REA will never claim some of the sales commission, an obvious response to the rumours.

When I called Redfin a Portal in the ACCC article, ex REA CEO Simon Baker responded in te comments with :

Your comparison to Redfin is misleading. Redfin is a real estate brokerage (agency) that primarily uses the internet to source leads.

They are not a portal.

They have a discount model and are attempting to change how agents in the US approach selling and marketing real estate.

Redfin do not fit into any box easily in the USA let alone here in Australia.  Whilst I agree with Simon that Redfin technically are not a portal there is far more to it than that as they are a hybrid solution and their offerings differ on location.

They run a website featuring listings from other agents similar to a potal but they also show property and charge commission…  BUT only in just 16 metro areas only… Outside of those areas, and that does leave a lot of the US, they have partner agencies that they generate leads for on their website. The partner agent only pays 15% to Redfin for that lead if they make a sale.

In areas outside of those 16 metro areas I would argue that they are more like a portal than not.   See for yourself at http://www.redfin.com/neighborhood/10157/CA/San-Diego/Loma-Portal  (the word portal in the URL was not lost on me either!)

Personally I cant see how that could easily fit into the Australian market at all. I believe that the strategists at REA would have considered every possibility including this, because I know I would have if it was my company,  I don’t think it has any legs.

A typical real estate transaction in the USA has a sellers agent and a buyers agent for 3% each, totalling a commission of 6%.  Redfin represents the buyer who effectively gets some of the commission back in savings similar to how Refund Home Loans works here in Australia.

Let’s face it, I believe that the moment they took their first listing authority it would take only a few days for 10,000 agents to remove every listing on the portal.

The article also raises something that an anonymous poster, Deepthroat alluded to in previous articles and that was the meeting of Victorian agents at REIV headquarters about the revolt against REA…

REIV cheif Enzo seemed very quick to add that he has not been a part of the meetings and the REIV only provided the meeting rooms as they often do.  Why was he not involved…  because Enzo is the CEO of RealEstateView.com.au if he was involved in discussions you can bet that REA would be calling in the regulators.

As I have said many times in the past since I started to contribute here in 2007 , real estate agents need to control our data and not let companies like Realestate.com.au, RPData and Onthehouse use it from their own benefits as clearly their monetisation models are at our expense.

With the debates starting to focus on RPData I am more convinced than ever that an REI portal website is not THE solution.  I dont think it will do any harm, and I am sure that it can only place more and more pressure on the top two portals but the key to Project Rebellion is control of the data itself, not just sold data, but all data.   If Realestate.com.au, Domain and the data companies did not have unfettered access and the right to sell and trade it amongst themselves then these problems would simply not exist.

It seems that the campaign in Victoria to withhold sales data might have had an unintended victim as agents are not advising of Auction results according to an article in the Sunday Age.  This issue itself  is not new though as if you compare the various Auction Clearence rates quoted by some companies they never seem to agree. Until the regulators legislate that public auction results be made public this will be an ongoing issue.

We should start to get an indication of what the real estate groups and REI’s ase  planning as a response soon.

In a followup article to the Front Page Project Rebellion article, Ben Hurley from the Australian Financial Review has published a new story on an ongoing investigation by the ACCC into the activities of RealEstate.com.au and to a lesser extent Domain.com.au.

Questions directed at some of Australia’s leading real estate groups have seemed to focus on excessive price rises (see 1,2, 3 and 4) of realestate.com.au and the effectiveness of competition in the real estate online classified space.

Simon Baker, the ex CEO and substantial shareholder in REA has made some interesting comments on this blog recently regarding realestate.com.au prices :

If the franchise groups were serious about competing with realestate.com.au or at least providing a competitive offering, wouldnt they first start internally and attempt to organise group buying of REA subscriptions for their franchisees?

Imagine if all Ray White or LJ Hooker offices got together and negotiated as one for their REA subscriptions (and additional products). I think they would get a better price.

and

the most likely innovation will be suburb based pricing where there is significant differentiation between suburbs in the price paid.

and the most suprising comment from Simon was his take on add on products

The more interesting question is why do people have to buy the premium products? Do they really add value?

Does anybody else find that a little strange?

With all state Real Estate Institutes and the REIA meeting in Perth during the week strategies were again discussed to create a national industry run portal.  David Airey commented on this blog prior to the meeting :

“Sadly the REIA ailed to gain national support from most state institutes to launch or run a national industry owned portal. That’s a sad indictment of the politics that used to exist and allowed the commercial sites to grow around our industry at our expense.”

and

“I’m on the record on many occasions criticising REI’s for this intransigence and for not listening to members.”

But the current momentum in the industry may have changed some minds as all indications are that this roadblock may finally be pulled down and our REI’s finally taking a role that many members thought they would never see and that is the operation of a national industry controlled portal.  But taking on the might of REA would not be easy and one of the strategies being discussed is using the REI’s to feed to the commercial portals with delay of say 3 or 7 days. This would allow REI portals at a state and national level to promote something like “Find it first on  xyz.com.au”.

As this plays out behind closed doors the campaign to withhold sold data from  realestate.com.au is gaining some serious momentum and reports from small and large national real estate groups and portal pushers continue to roll in.

One side effect of withholding sold data from the likes of REA is that data companies like RPData who has paid substantially for this information feed from REA. RPData and other similar companies provide essential data services back to agents but also provide market analysis and review consumed by the nations media. With a strong national portal in place it’s expected that RPData will move to establish arrangements direct with the institutes bypassing REA entirely.

Another thing Ben Hurley has reported on today is the presents and gifts that Realestate.com.au is showering on their biggest spending clients.  With the real estate market slowdown agents have looked to reduce discretionary spending. REA have used things like dinner at high end restaurants, State of Origin games, Business Class flights and even brand new iPads to secure the relationship.  I personally have heard of a sales team being flown interstate to watch the AFL when discussions of reducing their yearly spend was raised.

Realestate.com.au has over 10,000 real estate agents throughout Australia and whilst many agents  spend around $1,000 a month there are offices who spend 10, 20 and even 30  times that amount which is primarily funded by Vendor Paid Advertising (VPA).  Realestate.com.au’s campaign to increase the share of wallet has been right around the country but it has been particularly successful in Melbourne where they have less competition from Domain and high dollar auction campaigns are popular .  As an example the Premier Property option offered by realestate.com.au can cost an owner well over $2,000 per month.

Many in the industry showed increasing concern towards REA’s motives when a video surfaced showing their intention to market direct to buyers and sellers. Check out the video yourself, particularly from 9 min 30sec of this video.

In response Greg Ellis issued a written response which seemed  to contradict itself from paragraph to paragraph. Why his response was not circulated widely by email is unknown but it might have something to do with the fact its easier to watch the video by clicking on the link if it was sent by email. I doubt to many would have typed in that long url.

In the letter he claimed that it was incorrectly reported that he wanted to cut agents out of the loop but then went on to state:

The development of site functionality that allows prospective buyers and sellers to access or claim property information that can be accessed by agents so they can cost effectively identify a new pool of leads.

I am sure I am not the only one that reads this sans spin to be that they are going to escalate their use of agents sold data, listing data and valuer general data to provide additional products to buyers and sellers direct and then sell those leads to agents…. as “cost effectively ” as realestate.com.au can do of course!

In an interesting side note REA reps have now started to sit down with salespeople and sellers in their homes to pitch $2000 a month Premier Property and other options in the marketplace. This appears to be very similar to the Redfin Portal in the US who have a team of salespeople on the ground in capital cities. The primary difference is that Redfin salespeople also present property and take a cut in the commission, something REA have repeatedly claimed they will not do.

REA’s dealings with the ACCC lately has not been good and has seen the scrapping of the Private Listing Policy which finally allows private sellers easy access to list on realestate.com.au.

The drought of sold data would certainly have some sort of effect on future revenue streams and to a certain extent current products but a successful ACCC action and a industry controlled competitor together would provide bad news for Australia’s largest and most successful real estate portal.

It’s going to be a very interesting few months as this all plays out but if it was bad news for REA it’s terrible timing for newcomer Onthehouse. A strong industry portal is not going to be good news for them.  Their original investor document and  subsequent prospectus highlighted the monetisation of client agents data.

The underwriter (and partial owner) took it a step further in their report when they stated :

“Low integration risk, with ongoing data feeds. PortPlus and Console databases are ready to be “plugged in” into OTH’s database. In addition, both businesses do not sell their software – they license it to each customer on a rolling basis. As such, they retain ownership and control over the software and its intellectual property. With the appropriate terms and conditions in place with clients, each business is licensed to access and upload the content that is captured by the software”

Customers of Portplus and Console are already questioning when the terms and conditions are going to change and just where their data is going to end up. I expect their competition will start to raise the issue and use this against them when pitching for business.  Even though the float was over subscribed, in their first month of trading the shares dropped to as low as 60c which must be a huge concern for the original operators of Portplus and Console who are restricted in selling many of their shares for quite some time.

Certainly, the “Noise” is getting louder by the day!   Join in and tell us what you think about the latest developments.

Today on the front page of the Australian Financial Review Ben’s article “Real Estate Agents Revolt” appears.

The article discusses hotly debated topics on this blog and its interesting seeing the discussion raised in more mainstream media.   The article covers some great ground and I expect there is more to this story up his sleeve for followup articles.

Some interesting quotes from the article are  :

The major agencies, such as LJ Hooker, Ray White, Raine & Horne and Century 21, are considering using their combined mightto setup rival information suppliers and advertising portals.

“It’s called Project Rebellion,” said David Airey, president of the Real Estate Institute of Australia

Real estate groups including RE/MAX, Professionals and First National are cutting back on the information they provide to REA.

and Ben was able to get some quotes from Greg Ellis, REA Group CEO

“REA will never take a dollar from the commission of selling and listing property, that is the exclusive domain of the real estate agents,”Mr Ellis said.

He said sold-price information was “absolutely a non critical part of the information we provide”.“People are significantly more interested in what their property is worth, which does not come from the sold information alone,” Mr Ellis said. He would not reveal the information used to calculate property values.

Grab a copy of today’s AFR or download the article by clicking here.

The email includes a comment “The survey questionnaire can be completed by personnel who have contact with realestate.com.au” which seems to infer that you can get anybody in your office to also submit on your survey link.

Here is a copy of the email.. Please note.. I have removed the copy to our survey.  They claim it is anonymous but the survey may still have a unique id.  If you don’t get your copy and you want to let REA know what you think of them get on to your account manager for your survey link.

*************************************

Dear Owner / Principal,

In a continued effort to improve our offerings to customers, we would like to invite you to participate in our 2011 realestate.com.au Customer Satisfaction Survey. Your feedback is important to us and past feedback has resulted in many improvements to the products and services we provide to agents (see below for further details).

WHO SHOULD COMPLETE THIS SURVEY?
The survey questionnaire can be completed by personnel who have contact with realestate.com.au.

HOW LONG DOES IT TAKE?
The survey will take approximately 10-15 minutes to complete, depending on your answers.

WHAT’S IN IT FOR ME?
In appreciation of your time and input, we are offering a reward to those who participate – entry into a prize draw to win one of 2 prizes – either an Apple iPhone 4 or Apple iPad 2.

To start the survey please either click on the relevant link or paste it into your browser window:

<< Link to Survey Removed by Me – see note at the bottom>>

WHEN IS THE SURVEY COMPLETION DEADLINE?
Please ensure the survey is completed no later than Thursday 23 June.

HOW HAVE THE RESULTS OF PAST SURVEYS BEEN USED?
Results obtained from previous Customer Satisfaction research provided us with valuable feedback that enabled us to identify new opportunities to improve our service. Over the past 12 months we have launched a range of new initiatives designed to further enhance your day-to-day involvement and partnership with realestate.com.au. These initiatives include:

Set-up of the Key Accounts and Inside Sales teams to provide more frequent and relevant support to customers
Restructuring of our sales team regions to enable them to increase their local area knowledge
Continued site enhancements with the addition of their properties appearing on the iPhone application and property.com.au
Thank you in advance for your participation.

Regards,
Greg Ellis
CEO / MD
REA Group

ABOUT THIS RESEARCH
All your responses are anonymous and will only be used in an aggregated form for research purposes unless you agree to disclose your individual feedback. Our research agency, Evolve Research, abides by the Market and Social Research Privacy code (for more information please click here)

*****************************

If somebody can confirm the link in their email to me at glennbatten@gmail.com and if it is the same as mine (ie.. not unique links)  I will edit the article to include it.

To counter this requirement many of these websites started to be run or at least associated with licensed real estate agents.  The truth was that many of these solutions were really just a glorified property listing portal that had just one effective tool and that for a private seller they could list your property on realestate.com.au.  They did not act as an agent but they seemed to get around the rules because they simply held a real estate license.

Realestate.com.au responded by creating the Private Listing Policy which effectively listed the minimum requires an agent had to provide to clients before they could list property on realestate.com.au.  These websites now became what was coined Agent Assisted websites that provided a bare minimum of a limited range of real estate services such as negotiation, contract preparation or assitance  and market appraisals. All of this was done from afar and often over the telephone or internet.  The policy was confusing for everyone and left a lot to interpretation because at one point  Hubonline, a subsidiary of RealEstate.com.au was building websites for these digital agents in contravention to their Private Listing Policy.

After plenty of pressure of the subject many of these digital agents in February 2011 had been removed or threatened to be removed from the portal, an issue they did not take too kindly to at all. Complaints were quickly lodged with the regulatory bodies and the fight ensued. A fight that traditional agents thought Realestate.com.au would follow through with.

And there we were waiting for the outcome until an email about 30-40 minutes ago.

Because of the instant delivery of email  its a golden rule to send good news on Monday morning so its at the top of the inbox when the recipient arrives at work and conversely to send bad news late on a Friday so it loses gets lost amongst the clutter. So its not surprising to see that when its really bad news its released on a Friday just prior to a long weekend  so its buried deep!!

Greg Ellis has just notified agents by email that effectively immediately the minimum levels of service have been in the Private Listing Policy are no longer to apply.

The real effect of this for traditional bricks and mortar agencies are that with service criteria totally gone private listings can now effectively engage one of these digital real estate agents to list their property on realestate.com.au. When you combine this with the fact that we have unlimited accounts and can list as many properties as you want any licensed real estate agent can now create a business to list property on realestate.com.au and charge a small fee.  As long as they get enough clients to cover the base subscription its going to be profitable.

I believe that for many the provision of these limited  real estate services will be thrown out the window because they were only added to get around the pesky Private Listing Policy in the first place.

It’s not totally clear yet just what was behind the complete reversal of Realestate.com.au. It could be that BuyMyPlace and others were successful with applying pressure with their complaints to the ACCC.  Similarly it could be financially motivated as the industry suffers across the country discretionary spending on portals like realestate.com.au has plummeted and its a move to get as many accounts as they can get their hands on.

One things for sure, with RealEstate.com.au backing down from this fight Private Sellers are going to have a stack of choices now to get their property listed on the realestate.com.au portal.  How low will they go ?   One guy operating from his bedroom might be able to offer listings on realestate.com.au for just $30 or $40 a pop because he is getting private seller listings form all over Australia.  How will vendors react to paying higher VPA levels for a realestate.com.au listing through a traditional real estate agent?

Here is a copy of the email :-

*************************************************

Dear Customer,

Our business has been providing online marketing services for the real estate industry since 1995, growing to become Australia’s No.1 property site by working with licensed real estate agents such as yourself to help you market properties on behalf of vendors.

From time to time we need to update our policies to keep pace with changing market dynamics and I am writing to update you on changes to the subscription requirements for realestate.com.au.

It’s important to note that our Terms and Conditions are not changing.  realestate.com.au will continue to require subscribers to hold a valid real estate agent licence and comply with the relevant regulations (including entering into agency agreements with vendors in the form required by state regulators). Vendors can only advertise on our site by engaging the services of a licensed real estate agent who is a realestate.com.au customer.

However, we have recognised that the minimum services requirement outlined in our Private Listing Policy – prescribing a required minimum range of ‘usual’ real estate agency services that agents must provide to their vendors – is out of step with the market and industry regulatory practices.

For these reasons, effective immediately, this minimum services requirement will no longer apply.
We wanted to share this decision with you and assure you that realestate.com.au remains committed to delivering innovative advertising solutions to our licensed real estate agent customers.

If you have any questions about these changes, please don’t hesitate to discuss them with your account manager.

Yours sincerely,

Greg Ellis
Chief Executive Officer
REA Group Ltd (realestate.com.au)

**********************

What are your thoughts on Realestate.com.au backflip in just 4 months?

What’s really disappointing for me is that realestate.com.au has been picking fights everywhere recently and the only one they seem to back down from is the one that many agents wanted them to make stand for.

So is it just a sign of the times as realestate.com.au would have you believe in their email.?

Why have they totally reversed their position in the past 4 months?  and has Realestate.com.au sold out the industry by allowing Private Sellers to get onto the portal through the backdoor?

Spokesman for AAMI Reuben Aitchison told ABC news that it is not worth keeping the branches open because such a small number of people use them.

“There’s been significant growth in the internet channel,” he is quoted as saying. “The amount of business and transactions that is now going through our branches has dwindled to the point that it now represents less than 2 per cent of our revenue.”

Reading between the lines just on this above quote – it is clear that most people do not go to AAMI branches to join the company – however this does not tell us the full story, how many people go into the branches for customer service? Far more than 2% I would guess.

This could be a fatal mistake from AAMI and its parent company Suncorp. I would hazard to guess that retirees are the bain of their existence and suck up most of their customer service time in branches across the country. Young people however, historically are immune to customer service and expect to be treated this way.

Customer Service

Customer Service is now seen by many large companies as a pain in the derriere. Ever tried contacting Google, Yahoo or the Microsoft web services team? The truth is customer service is a thing of the past. Most web companies today cannot afford to service clients who want direct conversations and you will find that as years go by – those wanting to talk to a customer service representative will pay a premium.

Google as an example have always handled enquiries online and you would be hard pressed to speak to a customer service representative unless of course you spend a great deal of money on Google Adwords. The success of Google comes from their software being relatively easy to use and backed up by community support and pretty extraordinary online resources.

If you ever contact Google with an enquiry it will simply redirect you to a help file and in many cases will not even respond directly to an inquiry. It is up to you to learn or be left behind.

These companies also affect small web development firms such as ourselves as we have found a large spike in phone enquiries on how to use 3rd party software like Google’s web services.

Annoying trends

Realestate.com.au has always annoyed me because they charge clients a fee to feed from companies like Agentpoint, HubOnline (now owned by REA), Portplus and other feed providers – when we basically take over their customer service and save them time and money. You can only do this when you are a monopoly or a duopoly. Competition not only breeds better quality software but also great customer service!

Recently, we as a small company have found that less than 5% of our customers take up to 90% of our customer contact resources with many enquiries are relating to services and software we do not own and should not have to support. We like others will no doubt in the future separate our customer service to web, email and make these users pay a premium over others.

Another annoying trend which has come into existence is having to purchase warranties for the so called quality products we buy. In the past companies backed up their products with great warranties trying to prove to you that they are better than their competitors because of the quality of those products. You only need to go to the likes of Harvey Norman to see this play out. I always make it a point to let the service representative know that this is not the way to do business, although I think Harvey Norman and the like make a killing on these ‘value’ added fees. About the only industry that now still thumps their chest about multi year warranties are car companies and this is because competition is fierce and customer expectations through past experiences are high.

In short we are all to blame because we collectively have created monsters that are shareholder graded only on revenues and profits and rarely customer service. This again is why I (and you should too) will always support quality real estate portals that compete with the likes of REA and Domain.

Currently our company (and most others like Portplus) support our customers by feeding to a multitude of portals – even though each one costs us time and money to continue to support.

What you can do?

In short, nothing much, more and more companies will direct you to online support and help and you will need to learn how to use software or services from these companies yourself. You will find that most web companies are already web based only with support and you will need to learn the software you use.

Learn or Pay your Front Office

I have made it very clear in the past that your front office person is probably one of your most important team members and you should start to pay them accordingly. These are the people that are on the frontline, more often than not these are the people that update your website and real estate systems. The turnover of front office staff is often high and you can only look at your company to blame for this. Get someone great and add these sites (most should be relevant) to your manual for front office personal – even better still take some time to learn what these services do and how they can improve your company going forward.

• Google Webmaster Tools
• Yahoo Web Services
• Bing Web Services
• Google Analytics
• Facebook
• Twitter
• Feedburner
• WordPress

OzHomevalue is a Realestate.com.au owned website for property vendors providing them with sales data information in relation to the suburb where the vendor’s property is located. From their homepage:

OzHomeValue provides a comprehensive property report to help find the value of your home. Try our easy to use, obligation free system and receive your FREE property report.

Well, it is not entirely obligation free given after a vendor fills in the form and receives a free property report, their contact details are then sold to local agents who contact the vendor regarding a appraisal.

But what’s more interesting about OzHomevalue is the sold data provided in the free property report. These property reports showcase recently sold properties and a Price Range for each property in the suburb where the vendor’s property is located. It’s this Price Range which is provided for sold properties which raises the question as to whether a property vendor’s privacy is being breached. Given most vendors explicitly request their agents do not publish sold prices, why then do all of these prices appear?

Given Ozhomevalue is owned by Realestate.com.au then a reasonable assumption is that REA are providing Ozhomesvalue with this sold data. As the sold dates of the properties in the report are between April 4 and April 12, 2011 than this sold data has not been sourced from the Valuers Generals office (because settlement has not occurred). Therefore more likley than not, this sold data is what has been reported on Realestate.com.au by agents once a property has sold. What’s interesting is, if you look at the sold properties on Realestate.com.au which are listed in the Ozhomevalue property report, you will see the price (for most properties) is not displayed on Realestate.com.au but is displayed on Ozhomevalue.com.au.

A perfect example of this is if you click on the sample property report on the Ozhomevalue.com.au website (after this post was published they updated their report to change the results but you can see a ozhomevalue_sample_report.)

You will see there are 12 recently sold properties in the report. Now if you search the sold properties on Realestate.com.au you will see that 11 out of the 12 properties do not have the sold price displayed. Below are the 12 properties in the report. Although the report outlines the property prices I have substituted the price with $X  to maintain the vendor’s privacy.

1. 197-199 Castlereagh Street SYDNEY – $X (REA No Price)*
2. 612/2 York Street, SYDNEY – $X (REA NO Price)*
3. 3701/129 Harrington Street, SYDNEY – $X (REA NO Price)*
4. 324/298 – 300 Sussex Street, SYDNEY – $X (REA NO Price)
5. 1307/98 Gloucester Street, THE ROCKS – $X (REA NO Price)
6. 1809/183 Kent Street, SYDNEY – $525,000 (REA Price $525,000)
7. 303/420 Pitt Street, SYDNEY – $X (REA NO Price)
8. 2007/98 Gloucester Street, THE ROCKS – $X (REA NO Price)*
9. 2007/98 Gloucester Street, SYDNEY – $X (REA NO Price)*
10. 1409/168 Kent Street, SYDNEY – $X (REA No Price)*
11. 129 Harrington Street, SYDNEY – $X (REA NO Price)*
12. 129 Harrington Street, THE ROCKS – $X (REA NO Price)*

*I decided to cross reference the 12 properties against the Australian Property Monitors database and the properties marked with * appeared in APM. All of these properties have the price withheld in APM.

Ozhomevalue refer to this price as a Price Range but make no reference to what this Price Range figure means. If it is the sold price of the property, then vendors (along with agents) would be outraged and should have every right to demand the sold price removed immediately.

After further examination it appears that Homeguru.com.au another Realestate.com.au owned company is displaying exactly the same sold property data as what Ozhomevalue does in a similar Sales Reports. However, instead of displaying the price as ‘Price Range’ Homeguru.com.au simply has it displayed as Price.