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REA Group, owner of realestate.com.au, will be introducing a money-saving, flexible subscription fee, but not all property managers are pleased with the option.
According to Michael Furlong, principal at award-winning agency Map Real Estate in Melbourne, at first glance the new flexi subscription, which offers agencies the ability to advertise all of their property listings on realestate.com.au within the one subscription cost, seemed like it would save his business hundreds of dollars a month.
However, the numbers didn’t quite add up.
“It sounded great at first, but once I did the figures, with my rep sitting with me, I was at a huge loss per month,” Mr Furlong told Residential Property Manager.
Mr Furlong said his subscription fee fell from $1,350 to $600; however, each individual listing would now cost an additional $65 to upload.
“I have a rent roll of 500. At the moment I have 38 listings to upload plus the $600 monthly fee, so that brings my monthly cost to $3,070,” he said.
“That is a huge increase for me, and when I asked how I was meant to find the increase in money, my REA rep simply said just pass it on to your landlords.
“I work for the landlord. I can’t expect them to accept those increases when they are really not getting any more for their money,” he said.
“I’d like to see an REA representative have that conversation with our landlords.”
According to REA Group's general manager of sales and operations, Arthur Charlaftis, the change in fee structure has come about after industry consultation.
“Our customers told us they wanted to reduce fixed costs and to have more flexibility with their subscriptions,” Mr Charlaftis told Residential Property Manager.
“As a result, we’ve introduced the cheaper and more flexible subscription and now we’ve started educating vendors and landlords about the value of digital to assist our customers in obtaining advertising costs at the beginning of their property marketing campaigns.”
A posting by Mr Furlong on the fee change on social media page The Australian Property Managers Community generated similar concerns from a number of property managers and principals.
One property manager posted, “I would love for my excitable realestate.com rep to explain and justify the increase to my landlords direct.”
Another said, “As always with realestate.com.au, estate agents are their own worst enemy, letting them get so big to monopolise the industry and not support the industry website. Wouldn't it be great to boycott them?”
The anger around rising subscription costs comes as REA Group reported a $41 million, on-year rise in revenue in the nine months to 31 March 2013, taking it to $244 million. The result, which was unaudited, was part of a filing by New News Corporation with the US Securities and Exchange Commission in New York.
“I’d like to make it clear that I am not against businesses making a profit, after all that is the aim of the game,” Mr Furlong conceded.
“It is OK for big businesses to be turning these profits, but it is not OK for them to year-on-year hike up the prices of subscriptions and then plainly say just past the costs on to your landlords.
“Small to medium real estate businesses are unable to recoup these costs.”
According to Melanie Dennis, director at Domain Property Advocates in Hawthorne in inner Melbourne, property management-only businesses will be worst affected by the changes.
“We can’t recoup the costs of higher fees through a sales department; we are definitely at a disadvantage,” she told Residential Property Manager.
Mr Furlong has urged principals to contact their REA representatives and voice their opposition to the fee change.
“I really hope that any principal who disagrees with these changes gets on the phone and speaks to their REA rep or a manager and says, ‘This doesn’t work for me’,” he said.
“As a community, we have the power to put pressure on them.”
To read Mr Charlaftis’ full comments regarding subscription costs click here.
- <p>Yet another TOTAL RIP OFF!<br>Were you all aware that <a href="realestate.com" rel="nofollow">realestate.com</a> have ONE PRICE for one suburb here in WA (ie: Western Suburbs pay much higher than the outer suburbs) and ANOTHER PRICE for others .. they can differ by as much as a half!!!<br>I an a ONE PERSON Business & live in Nedlands WA BUT work in metropolitan BANJUP WA .. their Nedlands rate is in the $800's PER WEEK (for residential advertising) but IF they were and they don't (!!) to charge me the area I work in (Banjup) rate it would be halved!!!<br>so check YOUR RATES with YOUR SUBURBS & those of RE Agents in other areas! <br>I FULLY AGREE THAT WE SHOULD ALL BOYCOTT THEM & STICK WITH OUR STATE WEB SITES.<br>Sincerely Maureen Frankham Real Estate (working in BANJUP)</p>0
- <p>Had a similar experience in the last 2 weeks. Running a small office in a rural area we are mostly disadvantaged with this sort of subscription. The offer would lift my minimum commitment by 25% per month. Our market is down pobably that plus at the moment. Trying to explain the situation was answered with well the vendors will just have to pay for it. Based on the limited amount of new properties we uploaded last year backs up our comment.Believe that competition is a great levelling bar as we as agents have to play by.</p>0
- <p>Let's face it. Real Estate Agents, and I'm one of them, are not the sharpest knife in the drawer. REA think they are the only game in town. On my Google analytics, REA only rate number 10 in sources of traffic to our website at .07%. Yes that's right - NOT 7% -- .07% The top 3 sources provide 82%. The top 10 provide 92% of which REA provide .07 of one %. REA have only one way to increase profit, and that's to rip it out of the lame brained real estate agents by changing the formula, and convincing the agents they will be better off. Try <a href="Rent.com.au" rel="nofollow">Rent.com.au</a> that is a site on the rise for rental properties. Type "RENT" into Google and <a href="rent.com" rel="nofollow">rent.com</a> comes up third. If the agents support alternate websites they will rate well also. As with all things, where there's a vacuum something always fills it. Although some of the vacuums in some of the agents heads may never be filled.</p>0
- <p>After speaking with my REA rep and thoroughly reading through all the material, I have come to the conclusion that this new Subscription should be called RIGID, not Flexi as I can not see any flexability in this at all. Flexi seems to be just another way of <a href="Realestate.com" rel="nofollow">Realestate.com</a> to raise more money for themselves. This may work in a city (but I doubt it) but certainly not in the country where we are situated and particulary in these hard economic times where our Sellers and Landlords alike are doing things just as tough as everyone else and they will not be able to see any benefit to themselves with this new "FLEXI" sytem because there is none. Because of the high costs associated with <a href="Realestate.com" rel="nofollow">Realestate.com</a>, I am contemplating using another company.</p>0
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