Opinion: real estate agent finders offer poor value to customers – REIWA president

REIWA President Hayden Groves.
REIWA President Hayden Groves.

THE real estate industry is always changing, sometimes for the better but sometimes not.

The latest set of market disruptors, including localagentfinder.com.au, openagent.com and Purple Bricks, offer poor value to consumers.

As the President of the Real Estate Institute of WA, people will expect me to say that, but if these intermediaries were upfront about what they actually offer I could be more accepting.

However, they market themselves as one thing and do another.

Localagentfinder and others like them claim to provide a service that finds the consumer the best agent, but that is just fantasy.

They are nothing more than a referral service and refer sellers only to agents who are willing to take part; this ‘willingness’ involves paying these intermediaries 20 per cent of the commission received from the referred sale – that’s something they don’t tell potential sellers up front.

If they were actually working for the consumer by locating the best agent and then being paid by the consumer, I’d be ok with that as they would be a true vendor advocate but if the agent pays it is a referral service, nothing more, nothing less.

Claims they find the ‘best’ agent are complete rubbish.

Often, the best agents in WA will not take leads from a third party referrer; why would they give away 20 per cent of their commission for a lead when they can get business on their merit?

So these referral services are probably only referring from an inexperienced pool of agents desperate for a listing and certainly not the best, in my view.

Purple Bricks also concerns me with its lack of transparency and add-on fees.

They charge a $4500 fee and no commission, which sounds enticing, if you are selling.

However, I understand that $1000 goes to the agent upfront, essentially for doing an appraisal of your home, then $3500 goes to promotion and marketing, which is not itemised, and presumably some of the money goes to the Purple Bricks business itself. Then you are effectively on your own.

What you do not hear is that extra fees are involved if you want them to conduct home opens and when you receive an offer all the details have to be sent to a law firm in Adelaide for a contract to be put together.

If you want to use a settlement agent of your choice you are charged an extra $300-plus.

There are plenty of “for sale by owner” models out there and they are upfront about the level of service you will get.

Make sure you read the terms and conditions if you are thinking of using any of these new services.

If it sounds too good to be true, it probably is.

MORE: Lach rocks socks: Como PS student puts out call for more help so he can help the homeless

MORE: Police charge Camillo man over serious pub assault

MORE: Araluen Botanic Park springs into life for annual tulip bloom