Fee Based Services

The Internet has made a real impact on the real estate industry over the past eight years with advertising dollars from traditional marketing flowing towards Internet Marketing and this will continue long into the future. Already many agents have deserted newspaper guides for listings/branding and pooled their efforts into the Internet and staff communication.

We have also seen the emergence of fee based services become more prevalent for agents targeting the lower end of the market. Some agents are now charging set fees to list properties under agreement through their agencies with some agencies charging vendors less than $3000.00 to list. Vendors then pay extra for services such as photography, virtual tours, open homes etc.

Whilst this may never cater for the the mid/high end of town – it has stirred some of the bigger agencies who are not happy with an assault on their revenues.

One of the more concerning things I have heard about recently is the fact that some of these agencies are placing pressure on real estate portals to threaten these agencies – in some cases warning them their accounts may be terminated.

This concerns me – because real estate portals have never to my knowledge dictated to agencies about the products and services they offer and the price these are offered – until now.

Today, I received a forwarded email from an agency (who will remain anonymous) and the contents of this email were of some concern. I will not name the portal involved but I have cleared some things up by calling the portal directly they assured me that in no way are they trying to dictate how agencies offer their services as long as they have an agency agreement with the vendor and are a licensed estate agent.

This should be the end of this problem. The fact that agents want to offer cut price services is nothing new, agents getting upset about this is also nothing new. These types of agents may come and go – but I think it is important that major portals both national and state based understand that the real estate industry like any other flourishes because of competition.

Currently in Sydney I know of around 30 agencies that are now offering a set fee based sales service. Most of these are offering sales for $2,000 +, but it will not be long before someone comes in and offers a fee based service for under $1,000!

There is a saying ‘you get what you pay for’ but I suspect these types of fee based services to become more prevalent in the future, especially now that mobile agents are becoming more commonplace.

Tell me your thoughts on this……

I will write some more about mobile agencies – in my next article.

Fees

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About Peter J Ricci

Peter Ricci is the Director of Agentpoint.com.au, Business2.com.au, Ginga.com.au and ZooProperty.com and has been involved in designing and developing real estate systems and websites since 1997. In July 2001 Peter founded Business2.com.au to help real estate agents better understand the power of the Internet and the real estate landscape in Australia and New Zealand. Since then he has penned over 300 articles on a variety of subjects in the real estate technology industry. Business2.com.au is now the leading real estate technology site in Australasia.

3 Responses to Fee Based Services

  1. Dominic S May 17, 2006 at 8:31 pm #

    We have one of these idiots in my city. Most people understand there is so much more to selling a property than just putting a sign up. If these agents continue to do this – they are just damaging our industry and you writing about it does not help!

  2. Elizabeth May 20, 2006 at 4:32 pm #

    Peter, what do you think of http://www.abcprivate.com.au ?

    They appear to provide just a listings service for $365.00 – which in my mind is really a disservice to the industry – and also a huge threat to the industry.

    Here the only need for an agent is to get your listings onto a Portal – if this catches on there will be no need for agents.

  3. Peter May 22, 2006 at 9:56 am #

    Elizabeth
    ABCPrivate is a company I know quite alot about. They target private advertisers and sign them up onto agency agreements on a fee for service model, which I wrote about last week.

    I do know of many companies providing fee based services, such as a set fee, my understanding is that if a licensed agent has an agreement between themselves and a vendor then it cannot (nor should not) be a problem. However, if you are of the belief that this will make agents obsolete, then I would strongly disagree. These types of companies are targetting the extreme low end of the market.

    If it were the case then agents would have been obsolete many years ago – as anyone can advertise in newspapers, letter drops, radio etc…

    I know of about 20 agents (and growing) in Sydney that now charge a set fee, although this company is at the bottom end of the pricing scale.

    If agents concentrate on providing great service, professional marketing, then these agents will have little (if any) effect on the mainstream.

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