Agents in general are doing it pretty tough at the moment and instead of lending their customer base a hand and freezing prices what does realestate.com.au do…. Rocket prices up even further!
I was once told by a friend that if you have bad news to deliver send it out on Friday and if its good news, send it out first thing Monday morning. No surprise then that the email that arrived on 4:30pm on Friday Afternoon contained bad news.
Hidden near the bottom is an article about prices rises from the 1st of February that cover Feature Property & Feature All PLUS, eBrochure & eBrochure ALL, Guaranteed Top Spot, Banner Advertising.
Where are the details of the actual price rise. Not in the email!. You have to login to read it. With xml feeds the norm how many offices actually login to REA these days. In fact, how many agency owners and manager login at all?
Now back in August you could get a feature property for $75 per month. Now 7 months later the same feature property will have had two prices rises to now be $95 per month. That’s a 26% increase in just 7 months which equates to 45% per annum.
Outrageous!
Disgusting!
Ridiculous!
In fact if I would have had the rates for the other items being increased some of them might be even increasing even higher.
Lets put this in perspective realestate.com.au.. over the past 12 months as Realestate.com.au claim that UB’s and visits are up by 15%.
So What! The sales of properties that feature on realestate.com.au has dropped by 50%-75%.
How can they justify a cost of $0.77 per ebrochure as physically mailing it would be cheaper. Lets face it, the greed mentality of corporations got the world in the mess they are in today.
Here we have a company that has spent millions expanding around the world, only to have wasted a large chunk as those close and downscale their overseas operations. The world is in the middle of an economic meltdown and their main customer base that has funded this expansion is hurting. Agencies are closing down everywhere and total sales turnover is only a fraction of past of years. To continue to show a profit so their share prices does not cop a hammering they ramp prices up to the customer base they have left. And they wonder why arrogant is the most commonly used word to describe realestate.com.au.
Is anybody else as fed up as I am with these prices rises by the greedy monopolistic corporation that is REA?
40 Comments
Peter Ricci
If these figures are correct, I am dumbfounded. I really that REA heads would really have thought about this a little more.
This is very short sighted and will almost certainly hurt them in the future.
I remember a comment a whole back telling us that it is still cheap. Well yes advertising online may still be cheap, but it is control that scares the pants off most in the industry.
If this is how agents are treated in tough times, then imagine prices in good times!
Peter Mericka
Hey Guys,
I thought you real estate agents pass this cost on the vendor. Estate agents near me charge over $100 for putting property on realestate.com.au. And then there’s the increase in agent commissions as the bubble gets bigger and bigger. If it hurts you guys, just imagine what it’s doing to the consumers and those who don’t have access and control over clients’ advertising budgets.
Robert Simeon
Oh dear ….. reminds me of joke of how do you turn a big business into a small business. Imagine if they had increased the monthly subsciptions then it would have been interesting as it would resemble the Titanic.
The decision does not effect us as we don’t use any of their add ons as I think they offer 5 feature properties for free each month anyway. For Mosman houses REA have just 17 homes featured (I assume all free) and Domain have 37 (all paid for). So I doubt it will not have any great impact on agents as these days we can count the number of online enquiries for sales over a week from REA on the one hand and still have fingers left.
They can talk it up as much as they want as proof is in the results and for mine I see REA as a very tired business model that has been on the nose for quite some time.
PaulD
As I have said previously, the ONLY thing I care about with REA is the delivery of enquiry.
In 2004 & 2005 the response rate was really consistent at 15 people per thousand property views. 2006 saw it drop to 10 and by 2007 it was 6 email enquiries per thousand property views. In January 2009 it has dropped to 3 email enquiries per thousand. So we are now paying 80% more than we were in 2004 and receiving 80% less enquiry. The agents in my area are NOT happy, and are waiting with bated breath for Google to make a move. REA have decided that they are the main game – meanwhile in the background, the agents are looking for alternatives.
The thing that really confirms in my mind that the REA numbers have a certain percentage of “rubber” in them is that the sales enquiry is the thing that has fallen through the floor, whilst the property management enquiry has always been strong and remains at about 20 enquiries per thousand property views. Oh ! and I LOVE the way REA say they have delivered 3.8 million VISITORS to their site in December.
– well I guess it’s marginally better than calling them Property Seekers like they used to.
Glenn Rogers
The new CEO is doing what was expected of him.
You couldnt pick a worse time in history to raise prices, this will lose REA a lot of supporters. (thats an understatement)
This move shows total disregard for their clients needs and gives Domain a real opportunity to steal market share back from REA.
BTW – does anyone know the latest traffic figures now that Domain have taken over NineMSN ???
snoop
Surely its not kicking agents in the guts,as they on charge most of their advertising.
Its kicking vendors in the guts!!
The vendor will decide if he wants to pay the extra,and the listing agent will support it of course as it helps him promote the property.
Its still way cheaper than electing for print.
One thing about traffic on all the listing sites I would like to see is transaparency on how they count agent accesses vs consumer.
I would stand by my previous comment re Ninemsn its a dinosaur and wont give Domain A decent ROI.
PaulD
2 things, It’s harder to tell with Domain and ninemsn. REA used to indicate that it came from ninemsn. Domain don’t seem to do that. Either that or we have had none from Ninemsn. And yes, snoop, I believe our great slump in email responses is directly due to the other agents looking, ’cause I do it 🙂
Glenn Batten
Snoop,
The truth is that the majority of agents out there do not charge for the internet because consumers still consider it a free resource. Those that do often charge just $50 or $100.
You may remember we discussed this very issue back here:
http://www.business2.com.au/2008/11/19/75-of-current-subscribers-will-not-renew/#comment-76345
Of course all of those prices are now significantly higher again. The ebrochure alone for one property would cost around $1,000 dollars. Feature properties cost $95 per month. Give current days on market statistics thats about $300 per listing if you want it featured every month.
Then you have owners who flat out refuse to pay for the advertising if their home is not sold.
So yes, some of the costs will be passed on to consumers, but my guess is that the vast majority of the price increases will be born by the agent.
Regardless of the breakdown how is this reasonable ?
JoB
Hi All,
Often read these comments & truly enjoy the open environment. What I often wonder though as a marketer & consumer is why agents consistantly ask for more newspaper dollars when even the consumers know the newspapers are dying and they are not worth what they once where to consumers and hence agencies (you would think), yet their prices go up each year and circulation / readership goes down & the agents keep spending their sellers dollars regardless of the substantial decrease in returns, which can cost the sellers thousands as appose to the hundreds (if anything) that is asked for the internet. maybe agents need to understand & educate themselves a bit more about today
snoop
I read a survey albeit from 07 that said 90% of agents oncharge or were planning to oncharge advertising.
I think we did cross when I tried to list my property using sell my castle all three pitches were charging (quite dramitic)varying amounts for internet advertsing.
Agents are going to have to be real smart about providing roi stats for each medium to consumers.
As a rule for a smaller investment property I would not pay any agent for web advertising.
snoop
Can any of the agent experts out there tell me if agents are legally allowed to charge a margin on advertising<or accept rebates from publishers??
Glenn Batten
Snoop,
Whilst I think the survey is a little high the results were about advertising in general. My point related only to the internet, not all forms of advertising.
The reason agents dont charge is exactly as per your very own quote. “I would not pay any agent for web advertising”. In one breath you suggest agents would oncharge it, in another you say that you would not pay for interent advertising. Dont get me wrong, that is very typical.
In Queensland you are not allowed to profit from advertising and I am sure you will find the other states have the same issue.
snoop
So heres the thing i was listing in nth qld and had three different quotes for internet (rea).
I wonder how its worked out?
SSSR
I think Robert highlighted on this blog elsewhere that he is focusing on his own website, newsletters and general SEO. How is that going for you? I assume you are seeing nice increase. In any event, is this not the future for agents, getting their own websites to the top of the results for their suburb? REA becomes a secondary and you feature your own properties and send out your own ebrochures for free from your own well positioned website!
Glenn Batten
JoB,
I am lost how you can say “agents consistantly ask for more newspaper dollars”. I doubt there are too many agents whose advertising investment has increased in newspapers. Across the country and around the world newspaper advertising is way down across all industries, not just Real Estate. Journalists are not being sacked and Newspapers closing down for no reason.
Real Estate agents are no different to any business and will advertise in different mediums that generate enquiries. Newspapers are dying… they are not dead. Do you honestly think agents would waste clients and our own money on a medium that provides no results? That’s a little naive isn’t it?
One of the biggest problems that agents have with marketing is they want instant results all the time. Like a junkie they place an ad and want the instant fix. If an ad or a medium does not make the phone ring they move on. Little thought is placed into brand advertising at the agency level.
The problem this thread is about is the REA corporation raising fees beyond what I consider as fair. They send it out on Friday afternoon with updates to start over the weekend. The details were not even in the email, they were behind a password protected site, a site they no the majority do not even visit. When they justified the price they in my opinion tried to mislead. The talk about how much that recent price is and compare it to their performance increase over the past year.. the problem is they last increased the price a few months ago.
This is a company that did not compensate any agent one single cent after delaying hundreds of thousands of emails, if not millions for 10 weeks, and then tried to hide it.
Glenn Batten
Snoop,
Nobody has the answer to how you calculate it.. I have asked REA who promised to speak with the authorities and come back to me, but to date I have heard nothing.
Specific advertising addons for each property are easy to identify, but base charges are hard to apportion and there is not rules or directions to follow..
Shane Dale
Its nice to complain, but better to do something positive about solving an issue that annoys you.
I can say that the response to REA and domains actions is proving to be a positive driver for Myhome.com.au – possibly for other free portals too i suspect.
It remains a fact that to present a serious challenge to REA and domain – a new portal needs to have a comparable number of listings – thus agents must load their listings to myhome BEFORE it can market effectively.
Thus I can only assume that everyone here making comment is now loading to Myhome.com.au??? Its FREE forever and available as a manual logon or an automated feed.
Those who are members of franchise groups, such as LJH or Ray White , First National or Raine and Horne and a a few other remaining smaller groups should voice their concern about rising prices to their HO and then get their group to load so I can do something proactive about offering a sensible alternative to REA and domain. Otherwise your most effective and simplest -easiest – cheapest way to push back is gathering dust while you wait. The sooner you start – the sooner we get effective for you.
Craig
Shane, you are correct. It reminds of the old saying, “Don’t give me a problem unless you have a solution”. As much as everyone is complaining about REA everybody still supports it. I would also encourage everyone to upload their listings to Google Base. While not officially in Australia yet, it can still be used without much problem.
snoop
Rea to their credit to date have only increased premium listings not the standard subscn?
Also why not load your listings on every free service?,you could snag a buyer but the reality is REA has the circulation/eyeballs.
Myhome a nice site with some listings has only around 300k uniques and perhaps homehound a little more.
The two big regionals REIWA and Reiv perhaps have closer to 700-1m
But nothing near REAS 4m plus or Domains nearly two,with a strong nsw base.
So i guess its becoming REA for true national and a mix of the successful regionals for the rest??
As an Investor/vendor/buyer I would expect my agent to be knowledgable and make sensible and accountable recommendations on how they plan to market my home.
This is not common in the industry in my experience.
My last property a 7 fig plus apt and an 8k spend via one of the largest agencies just gave me a bill for 8k with no breakdown of wehere what or results from each publication.
Craig
Snoop, you are right that currently REA gets more eye’s than any other site. But the point Shane tried to make was that seeing as it costs nothing (other than time maybe) to list on other free sites, agents may as well give it a go. If agent’s have a problem with REA it is totally in their hands to make change happen.
SSSR
Good point Shane. Now is the time that portals like MyHome can start to take some market share. Challenge is, how do you get the agents who arent internet savvy, and see REA as really the only site they need to be bothered with, onto your site. Then, once that critical mass is attained, providing the consumer a reason to visit MyHome over REA.
No doubt you are working on these items. I must admit, I have MyHome in my favourites now and while I still use REA for the most part, it would be nice to see critical mass on your site. Also some cool tools, possibily social networking in orientation, to give MyHome the differentiation.
Sal Espro
Shane,
Just checked MyHome for content and it seems very sparse – and some very old listings (agents not updating sold properties).
It’s one thing to have a portal but as you know there are many out there. You may have paid a premium to buy it back but I think you need a new plan (and not just rely on some web2.0 tech – that incidentally I found a but ‘flaky’), as agents aren’t just going to start using MyHome as distinct from any other minor player.
Ps As an old timer, Shane, I think your ‘tone of voice’ is too ‘in your face’ and you need someone else to do your media interfacing. That is, I have ‘heard’ your comments previously and you seem to have no problem getting stuck into agents who you wouuld have be the hand that feeds you. You almost seem to expect that the Industry should support you. This is a people industry despite the increasing use of technology and it would be a positive start to your new approach if you were to get a better feel about yourself and your products/services – Just my advice so please don’t get in an argument with me. All the best, Sal 🙂
Sal Espro
Ps Shane/Glenn/Peter, just for history’s sake, PBL seemed to spring MyHome from nowhere. What was it that they purchased? What was its previous portal name? Was it a significant player somewhere? What was your prior experience? How will FREE pay for your current model? Answers to these Q’s might assist in your ‘resurrection’ and help agents get a ‘feel’ for you. Rgds, Sal 🙂
Glenn Batten
Sal,
Funny your asking the question of why an agent should get on board with Myhome.. I have been asking the same sort of questions recently so watch this space..!!
Your questions relating to Myhome’s history are really for Shane to answer because its his baby. I know what I have been told or read along the way but that’s all.
As to the point of a free portal. It’s not totally free of course. What business could survive like that? Myhome seems to be following the business model of the majority of US property portals. Real Estate agents are a data source and the pay off for providing that data is we get the enquiries. The income is generated from advertising and tiered sales on premium properties and other add ons. The base service is free, or probably more accurately, no charge.
Its very much like Google. They wont charge agents to upload property to Google Base. The data is just an attractant for visitors so they can place an ad off on the side when they view the information. They make money when you click on the ads and the property listings feed is just a source of data. Their client is the advertisers, not the agents themselves.
The models are different than the existing successful portals, but that does not make it unworkable. They have had plenty of success overseas in this and other industries. If you dont have the expenses (executive salaries and bonues, sales team, etc etc) then you dont need the same income either.
Sal Espro
Hi Glenn,
Still on the subject, in a previous discussion I think you questioned my claim that Google actually ever ran ‘Real estate’ as a specific search. Click the ‘drop down’ next to ‘All results’ here http://www.google.com/maps. No many properties but I have seen it with a lot more.
Rgds,
Sal 🙂
Shane Dale
Hi Sal, I usually try to be brief, as everyone hates a windbag!
And i can fall into that trap easily – my apologies if it comes off as brash. Text messaging is so easy to misread the tone of any comments, I do in fact need the industry’s support – any industry identities are always welcome to come and discuss their views with me anytime – there is a pub across the road, and its my shout. I hope that shows I am as friendly as they come for a CEO! Try calling Rupert to get the same offer! At Myhome.com.au your views are always welcome.
I have based the business model, trying to show benefits to all stakeholders, without risk. e.g. there is no contract with myhome.com.au – you can come and go as you wish, its free, there are multiple ways to load – and its stable, and reliable now. For buyers there is a new interface ready to go in the wings, and also new offerings for vendors. Its not just another free portal, however I prefer to reveal each strategic element as its required, not as a way for competitors to learn from. Things are going very well, I don’t expect you will see from the outside what is going on, nor will you be getting huge enquiry at this stage – we need listings BEFORE marketing.
I dont wish this response to turn into a myhome discussion – somebody feel free to make a new topic for that please – I believe its best to stay on topic, but to answer you – PBL bought my technology companies and a business plan – they chose another path to what was originally planned by me. They built a very different site to my design and business model.
There is now a huge challenge to confront REA and domain – but I believe – firmly that they are vulnerable and the industry is willing. I am backing that hunch with my own funds and the benefit is available to any agents wishing to join and support it, without cost or much hassle. I don’t know how much more palatable I can make it than it is currently – although I think I can do great things if I can get wide industry support. I think the REA model is old and outdated – the industry can do it better – and I have the right tools to do it. Please join!
Sal Espro
Thx for that, Shane. I guess we’d need to know why your portal has any better chance than any of the others out there we are already using.
Back to REA et al, if you’re there Mr. Baker, what’s your take? Are you worried your shares are going to tank with this rate hike a la the UK portal experience Peter related late last year, or do you see it adding to your share value? If so, why?
Rgds,
Sal 🙂
Glenn Batten
Sal,
Nice spotting!!
Our previous discussion if I recall correctly was that you had seen it once or twice, but could not replicate it. From memory I think I offered a few different scenarios of how that could come about. One was that you were on the american version of Google Map which is plugged into real estate and has been for a while now, just US real estate.
The second was that you seen it prior to the US version of Google Maps being automatically redirected to the Australian version. If you type in http://www.google.com it automatically knows your in Australia and will redirect you to http://www.google.com.au. Similarly maps.google.com use to only access the US searches, but it now checks where you are so it would now use the Australian maps as default.
The last and probably most likely scenario given recent developments is that Google temporarily turned on for testing purposes the Australian real estate database we all know they are working on. They are known to do this when testing new layouts and products around the world.
But as you say, the real estate option for Australia is up and running right now. It may be just a testing scenario again as the listings are not yet integrated into the standard search and base.google.com.au is still not active but its a good start.
Glenn Batten
Sal,
That is still only through the US version of Google Maps… but it is finding Australian properties.
Through the Australian maps site the option is not in the drop down.
So you can do this search… http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=carrara,+qld&mrt=realestate&sll=-27.971119,153.273911&sspn=0.014327,0.013261&ie=UTF8&z=14
on http://maps.google.com
but not yet on http://maps.google.com.au
Sal Espro
Actually Glenn, I had been using it for Australian properties for some weeks last year before it previously went ‘out’. Try “slater street south yarra victoria australia” to get more than one listing in a suburb.
snoop
That google is still a really ugly and not user friendly experience if you were searching a lot of properties it would drive you nuts.
Craig
There is currently just a dribble of properties on Google Base in Australia, but hopefully this year will be a tipping point.
http://www.baseestate.com/Search.mvc/Index/ForSale/SYDNEY,NSW/AU
Bel
Where’s your source from?
Anon
I really think that moves like this from the current market leaders will be the major contributors to the success the free listings sites will see over the coming years.
If this is not a motivator for agents to support the free industry alternatives, I do not know what is. REA almost hold a monopoly and to date have raised prices with little to no consequence. The only way to stop this is to support those players like Homehound etc who are there to give agents a marketing channel at no charge.
If the support doesn’t come, REA will hold the handle to the vice for ever, and agents will continue to be at their mercy.
Glenn Batten
This is just Crazy. We have a hiccup at the moment with our email server. We have a backup MX record so if our exchange server goes down the mail is delivered to a pop3 account instead of bouncing back.
The end result is the mail is all delivered into a single account as a failsafe that we can still access. This means I am looking at all mail that arrived to our agency for a 10 hour period starting at 1am this morning. I know that all the salespeople receive these ebrochures as they all register on realestate.com.au but as I go through this there is 21 realestate.com.au ebrochures delivered to just ONE SALESPERSON over a 10 hour period.
If these are done at the full rate of $0.77 then this has cost vendors and agents as much as $16 to update just one person. I cant recall.. are “ebrochure All” charged flat rates per listing or just a lower per recipient charge?
I wonder if realestate.com.au isolate known real estate agent addresses from being charged. Wishful thinking maybe ????
They could obviously identify most if they wanted to. Easy ones are @raywhite.com.au, @ljhooker.com.au etc etc but they also know the domain names of virtually all real estate agencies so tagging all email addresses from those domains seems an easy enough exercise.
Paddy
“wonder if realestate.com.au isolate known real estate agent addresses from being charged. Wishful thinking maybe ”
Glenn your question is obviously rhetorical!
Just wait until they start charging to receive their newsletters.
Robert Simeon
Breaks me up – especially these claims 🙂
Records were broken in January with over
4.83 million property seekers* visiting realestate.com.au.
realestate.com.au continues to deliver results for your business by attracting more property seekers to your listings. We are committed to making investments that will enhance our services and drive more consumers to your listings and business to generate MORE exposure and MORE enquiry.
In a few years time they will in all probability be appearing on “Where are they now”!
pete
Hi everyone, i was actually doing some research to find out what realestate.com.au was chargeing the realestate agents as l am very soon launching a brand new website. The website consists of a number of sections, but the main section is “realestate” and l needed to be sure that my prices were lower than other “already” established web sites. Well l came across this site and read that realestate agents are being slugged with a huge jump in monthly fees. Well this aint very good news for the agents, BUT ITS GREAT NEWS FOR ME !! as l am now able to “slaughter” the price being charged by some of these money hungry organisations.
It must be said that my site is not quite ready for operation, but you can go and have a look at it and get an idea of what it will be. (please do not register just yet, please wait until the 15th of july 2010 before registering as the site is not yet complete)
Anyway l might aswell urge any realestate agents to contact me by email at [email protected] and l will talk the possibilities over with you.
I will be offering yearly subscriptions, which will entitle agents to list up to “X” number of properties per 12 month period, and for those very large real estate agents l can offer unlimited listing per year.
Whats more, l will give a personal guarantee that no price rises will occur any time within the next 3 years, and any price rise will “only” be as a result of increased costs to me……. and not stimulated by “personal greed”
If l ever found that l needed to raise my fees by any more than the rate of inflation l would give up and get into a new field………
While we all have a right to make a decent living, l think such large price hikes are disgusting and driven by sheer greed. Where has “loyalty” gone ??? and whats wrong with looking after those who have looked after you ??? Perhaps realestate.com.au will learn a very valueable lesson in bussines ………. “a lot of little” is far better than “a little of a lot”
Further more …. what is a realestate internet site without any realestate ??? why push agents away from you ??? well l guess l shouldnt complain too much as this is the best decision l could hope for, perhaps my site will benefit from the fall out. Not if, but “when” the agents back my site l will be sure to never ever bite the hand that feeds me.
Peter Ricci
Pete
I will allow you the indulgence this once, but all other comments blatantly promoting yourself/products/services without any real discussion will be refused.
Being cheap, free is a good thing, but remember the majors have something that many cheap and free sites do not, and that is 10’s of thousands of buyers at the ready.
Good luck!
pete
Hi Pete Ricci, thanks for allowing the self promotion and thanks for the “good luck” wishes.
I just wanted to say that the major sites have the same weakness as the small and/or up and coming websites……… and that is the reliance of the advertisors “sticking” by them.
If the majority of the r.e.agents left the site, and all went to a new site you would find that the 10’s of thousands of buyers at the ready would soon follow.
Anyway, l am making small steps at the moment with my website, but l am determined and hopeful of building something “big” and something that is for ever loyal to those who get onboard, after all it is the customer or clients that make or break the business…….. so why would anyone involved with a business ever make decisions that anger or frustrate the customer base ???
Having just said that…. l know it happens all the time, with companies or business’s raising their prices. The best recent example is the Commonwealth Bank who lifted their interest rates well in excess of the Reserve Bank rate rise……… Now if all the home loan customers “up and left” the Commonwealth Bank l am certain the bank would quickly go into damage control and drop rates.
The problem ofcourse is that the majority of the Commonwealth customers put it into the “too hard basket” and simply keep on paying. Thus the decision to make irrational price increases has a positive bottom line result for the business and nothing will ever change….. Unless the people (customers) who make the business change.
I guess it’s a bit like a trade union movement, if enough people get behind the movement you will force changes…….. but where is the trade union movement for the customer ???