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After it all settles down……

5 minute read

Anytime you get a press release from a company touting ‘a revolution’ in anything you can be pretty sure it is going to be a disappointment. For the most part agents have liked it, however I really feel that the majority of consumers I have spoken to have not liked the new site and this is a real problem. Even some of the comments on this site recently have not been too flattering.

Just a quick note to realestate.com.au’s marketing “gurus” if you build up something so much, and you know it isn’t that good, be prepared for a little ridicule and for your marketing to fall very flat. After all, revolutions are usually powered by the masses, not the few!

That is not to say the new website is good, or an improvement – it is, it just isn’t that special and it really hasn’t done any I have not seen done on other sites.

So now that the launch has now settled down in terms of sensationalism, frustration and despair, I think it is time to have a look at what is the bigger play here for Realestate.com.au and to a lesser extent domain.com.au

Both portals realise that the years of increasing basic monthly fees to agents at a good pace is slowly coming to an end, so they are now looking at new ways to get squeeze your marketing budgets (possibly only at their newspaper divisions expense) .

They also know you guys and gals are infatuated with your immediate competition and will look to leverage millions of dollars a year more from this very fact. Real estate agents needs to wise up or you will find most of your marketing being spent on campaigns that do little to benefit your brand or your vendors.

Historically speaking

When I started this blog in 2002, I did it after listening to an executive of a certain real estate portal expound a whole bunch of $#%#%@ on an eager audience at a real estate institute endorsed gathering.

Basically the whole speech was about spending even more of your money on rubbish like banner ads to bring you untold riches. Over the following years these events were held all over the country and real estate institutes were sponsored by the companies giving these speeches.

I was so annoyed at this that my initial speech (which I changed at the last minute) was all about why you shouldn’t do most things the previous speaker was endorsing and to push more of your money into your own future – your website. Suffice to say I was never welcome back again.

Why you need portals

You need the likes of realestate.com.au and domain.com.au, at the basic level they are great value for money, they are popular across the country and they do provide you with a valued service.

Why you don’t need premium, platinum, super platinum and super duper platinum listings

Sure, if the client is paying go for it, but think about this, there is no statistical evidence that these listings sell quicker or for more, nada, none, zero!

Marketers will tell you that premium listings get more visitors and therefore your brand gets more recognition, however don’t you make money when you sell the darn thing, not when anyone clicks on it? So do the math, think about where else you could spend that branding money more effectively.

Why you must be on Google Real Estate

Google real estate will be a slow burn, they will build their systems and you will find more and more people using this service each month, it will almost certainly always be free* and will soon be integrated into Android Mobile Phones.

Supporting this website with your listings will also push visitors back to your current site and also make this offering stronger. The stronger Google is, the less likely you will see large increases in fees in the future from the major portals, in fact at current rates I think within 5 years basic fees on these portals will definitely come down, mainly from pressure from Google and other similar free services.

* Google has built the trust of developers worldwide because they are open, developers in return have made Google what they are today, it would be the beginning of the end for Google to change the game. Incidentally they also make about 8 billion year from this philosophy.

Start your own Groups

I want you to start your own groups on MeetUp, get all of your immediate competitors to meet once per month for lunch at a different location. Maybe invite someone to speak at these events, but generally just open discussion on as many subjects as you please, maybe you can form a local buying group.

Yes, you need to compete and yes their will be a little espionage, but I guarantee it will be of benefit to you in the long run. You never know, it could be great fun as well.

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18 Comments

  • Craig
    Posted April 30, 2010 at 2:45 am 0Likes

    Your point about premium and platinum listings is good. I would think that most people who are looking for a house would be thorough enough to look through all the listings and surrounding areas before making such a major investment. I can’t imagine these upsell’s provide more than a couple of percent extra attention.

  • Nick
    Posted April 30, 2010 at 2:18 am 0Likes

    IMHO branding for a agent is supposed to be targeted at potential sellers. Buyers generally dont care who the agent is and are more interested in the house.
    Why you’d spend money on branding on a site full of buyers is a little bit daft.

    The points about Google are good.
    Why would you not go for a portal that is not only free but is strongly promoted in stuff like Google Maps? You can even sometimes leapfrog RealEstate.com.au in the search listings with a shiny map to draw attention.

    It can be daunting to get on Google Maps however.
    There are however some people who do it for you without needing to rewrite your website. Our agent services division is one of them.
    http://www.realsauce.com.au/page/google-maps-real-estate

  • Cam
    Posted April 30, 2010 at 2:35 am 0Likes

    @Nick “Why you

  • James
    Posted April 30, 2010 at 2:37 am 0Likes

    I think that you are pretty well spot on with many of your comments, especially the “to push more of your money into your own future

  • Charlie
    Posted April 30, 2010 at 3:28 am 0Likes

    Spot on Peter – great post. It also harkens back to my ‘billion dollar black hole’ post of a few weeks ago, and loads of other comments in between; but you’ve wrapped it together nicely.

    Agency web site + Google real estate = the future (not tomorrow, not next week, but the future). Which should be good news as it makes the agency’s site the ultimate winner, and focus. As it should be.

    The trick is getting the real estate agents to change their ways, but I feel this is happening, albeit slowly.

  • Kylie Emans
    Posted May 1, 2010 at 4:22 am 0Likes

    I have a realestate.com.au invoice on my office fridge, just to remind me every day how much the portals have increased their fees over the years. In 2002 I was paying $242.00 per month!!! That included sales, rentals and holiday accommodation advertising. Suffice to say that what I currently pay is much more than CPI increases over 8 years. And we do not do rentals and the holiday website is now separate! This reminds me every single day that I need to develop my own agency’s independent website.

  • Sue Duhnym
    Posted May 3, 2010 at 12:49 am 0Likes

    Kylie,

    *Note – i work in digital media, but not for a real estate portal.

    2.5% commission on a property sale of $500,000 in 2002 would have been $12,500.. say that house has increased just under 100% in value over the last 8 years, given historical price trending, and you recently sold that house today for $900,000, at 2.5% commission – a commission of $22,500.

    CPI increases on your 2002 commission should equate to you receiving just under $16,000 on the same house, in 2010.

    This would mean that in keeping with CPI increases and being as fair as you want the portals to be, you’d drop your commission rate to 1.8% on the 2010 sale.

    You’d receive $16,000 (1.8%) and not $22,500 (2.5%). Sound fair?

    No agent bases their commission on the CPI, why should REA or Domain do the same?

    This is not a dig at you, just the other side of the coin. Also love your blog and what you’re doing on your site.

  • Mac
    Posted May 3, 2010 at 12:58 am 0Likes

    Get your hand off it, Nic! Your website is misleading.
    i.e. You say, ” …the only independent company in Australia putting agents up to Google.” What a load! There are plenty doing it.
    In addition, while your comments in this forum over time have indicated your understanding of tech knowledge, like today’s comment on agency branding and buyers, they generally show extreme naivety / lack of a working knowledge of the real estate industry! Good luck with your IT business but be mindful of misleading statements. They might have a bigger detrimental effect than positive.

  • Peter Ricci
    Posted May 3, 2010 at 1:14 am 0Likes

    Kylie

    Nice statistics, but I think I can prove they are a little misguided.

    1. There are nowhere near as many buyers today because of price rises.
    2. What was the 2002 price of fuel?
    3. What was the 2002 price of the average weekly commercial rent?

    I can keep going, but I think you will find that agents would prefer the average home being at 2002 levels and be turning over a lot more stock.

    In 2002 I would agree with you. There was a massive rise from 1990 levels in house prices and agents commissions gained a lot during this period.

    However, I think it is only the misguided that equate rising house prices to a better market for agents in 2010 and beyond.

    Journalists and Real Estate Institutes use the words ‘good signs’ whenever they think prices are on the rise, but these phrases are really just for the lazy simple minded who thinks this throw away line helps agents.

    Fast forward to 2010 and I think you will find the only winners out of house price increases are:

    • State Governments
    • Federal Government
    • Banks
    • The 13% of Australian Taxpayers who own more than one property (negative gearing)

    As for real estate portals. As I mentioned above it has nothing to do with the price, but everything to do with control.

    If a business sector (in this case agents) needs a third party company to survive and that third party company can effectively increase fees at their whim you know you are in trouble.

    Can you imagine that your life revolves around your mobile phone and there is only one company and every year they lift their fees by 10% and you start in 2002 at $100 per month?

    By today you would be up for $220 per month and in 10 years around $450 per month.

    I think I have proved my point. Competition is the only thing that will stop fees for agents getting out of control and the more the better.

    Competition keeps prices low, increases innovation and customer service. With no competition, we will see an increase in pricing, the dropping of customers service to email only (not far away) and little innovation.

  • Nick
    Posted May 3, 2010 at 1:46 am 0Likes

    Mac, that means only company putting people up to Google pointing back to their own site. It excludes portals who put a agent’s properties up pointing back to the portal, and web developers who integrate the functionality in to the sites they build.

    If you do know another company putting people up to Google without having to remake their site or use their portal, I’d be interested in hearing about it.

    By the way I come from a background of IT, not real estate as you can tell.
    I give my opinion here, and I can be wrong – feel free to correct me.
    However its not a one man band company – I’m just the tech guy.

  • Wayno
    Posted May 3, 2010 at 9:52 am 0Likes

    Peter you are spot on, I have been thinking this over for the last couple of months and when my renewal is due I am realy thinking about going standard script only. The vendors ask if they will be on REA they dont ask will they be a featured listing and if they do I will do it because they will pay for it (sick of being bent over).

    Just a question to everyone, if I said I am going to start up a portal and you will have to pay fees to be on it BUT, as my revenue rises from advertising revenue your fees will drop. To a point over time that I hope to have you at zero fees because the listings you have supplied me over the years has increased traffic so much that advertisers want to be part of my portal and your fees drop as my revenue from my advertisers increase. Would you want to come on board ?

  • Peter Ricci
    Posted May 4, 2010 at 12:42 pm 0Likes

    Wayno, on the first point, I think you should try to sit down with your competition once a month. Discuss things that can benefit everyone.

    I am sure you all realise that if all of you get the same service no one benefits. As a buyer I might click on first few listings, but I look at EVERYTHING!

    As for starting your own portal, I would advise against it unless you have something unique (and this is unique in others eyes and not yours).

    The web is littered with free portals or cheap portals, that lack two key ingredients – listings and visitors!

    Good to hear from you and good luck!

  • Ian
    Posted May 4, 2010 at 9:30 pm 0Likes

    Hi Peter,

    On the matter of setting up your own portal, as a ball park figure, how much would it cost for the frame work- can you buy into any of them and how do you find them all?

  • Nick
    Posted May 5, 2010 at 1:05 am 0Likes

    Ian your probably looking at $10k – $20k to get one made.

    But you really need to know exactly what you are going to do.
    How would you tell agents about it? Why would a agent pay you?
    You need to give them something that they cant get elsewhere – especially because you’d be starting from scratch.

    You could partner with a existing portal of course. Find one you like and drop them a email.
    Dont bother looking for them – if you need to search hard to find a portal, then its probably not a great idea to bother with them – users and agents wont try very hard.

  • Mac
    Posted May 5, 2010 at 1:22 am 0Likes

    Ian, here is a tiny portal set to go. It has all the heavy-grunt dbase back-end functionality needed (and more e.g. directories etc): http://www.propertyezy.com.au
    You’d probably want to ‘re-skin’ it with your own layout, adverts, calculators, blah, blah, blah…

  • Mac
    Posted May 5, 2010 at 2:22 am 0Likes

    Ps Nic, you might get a decent agency website built for $10K, but I doubt it would scratch the surface of all the functionality you’d need in a portal. e.g. Just to enable agents to ‘upload’ their properties might cost you that much.

  • Wayno
    Posted May 5, 2010 at 6:58 am 0Likes

    Peter
    I did not mean I was going to set up a portal what I meant was if there was a proposition like that put forward would’nt it be a better one that REA are giving us ?

  • Peter Ricci
    Posted May 5, 2010 at 10:51 am 0Likes

    Wayno, ahhh sorry mate, misread you. Again same answer though. Myhome.com.au is free as well as Google Real Estate. so all agents should support these initiatives.

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