Yesterday we reported some mutterings among real estate agents over plans by four real estate franchise groups — LJ Hooker, Century 21, Elders and Raine & Horne NSW (not national) — to force them to run ads on the new PBL site, myhome.com.au.
According to our source, agents were angry that they’d be forced to sign up to the new venture under as part of a deal that would reward head office with equity in the business on the basis of how many agents were signed up.
But another agent has been in touch to say the deal will benefit Queensland agents because it’ll break an effective News Limited monopoly:
I work for a Real Estate Agent in Brisbane who is a franchisee of one of the four companies you mentioned in your article,“PBL’s online Real Estate Rethink”. I thought I would just air my thoughts with you on a couple of the things that have been mentioned over the last couple of weeks in relation to this issue.
…The question needs to be asked as to why these companies would look to start up an alternative to realestate.com? In Brisbane, the only form of media we have available is owned by News Limited. They own the Courier-Mail, Brisbane News, the Quest papers and realestate.com. There is no point in us using Domain (the Fairfax site) as there are no Fairfax papers here.
In this scenario, it goes without saying that with no competition News can put the prices up at will. One of our biggest competitors is a major shareholder in realestate.com, so effectively we are lining the pockets of one of our biggest competitors. Now I am sure you would not like to be sending a cheque off to News or Fairfax every month, would you?
The third issue is the price you have quoted for monthly office subscriptions. Even with the price increase it is still about half what we are currently paying to realestate.com. Also keep in mind that any marketing costs, for our group anyway, are passed onto the seller, who is more than happy to pay the dollars if it will get the results.
The fourth issue is equity. As I have mentioned, the price of advertising is always on the increase when there is no alternative. The more equity my franchisor has, the more control the company has over the price we pay. The idea of this is actually to keep the price down. Now I know the cynic can say that the company will jack the price up as well. But I do not believe my franchisor would do this.
Whether real estate franchisors act in their own best interests of those of their agents remains to be seen, but it’s a valid point that anything which injects a little competition has to be a positive at a time when the Government is moving to concentrate media ownership further.