REA abusing its power, say small online agents
Sydney Morning Herald
Thursday March 3, 2011
THE country's leading online property listings company, Real Estate Group, has been accused of abusing its position after two independent agents face being ejected from its website for failing to comply with what they say are unreasonable terms and conditions.The agents, Michael Atwell and Andrew Blachut, who act on behalf of private vendors, are calling on the Australian Competition and Consumer Commission to investigate the group, known as REA, after they were told they would be removed from realestate.com.au at the end of this month.Both say REA has imposed trading terms that are unworkable and are designed to put them out of business in order to keep the listed company's real estate agency clientele happy.Agents such as Mr Atwell and Blachut, who run the Forsaleforlease and PropertyNow websites respectively, are able to charge a fraction of the fee of traditional full-service agents because they do not negotiate on behalf of vendors, organise inspections or offer appraisals, unless they are instructed to do so.They use websites such as realestate.com.au, which has more than 5 million visitors a month, as a way to market their clients' properties. REA has a market capitalisation of $1.5 billion and is controlled by News Ltd. Board members include the real estate identities Sam White of Ray White and John McGrath of McGrath Real Estate.In their submissions to the ACCC Mr Atwell and Mr Blachut say REA is forcing them to offer similar services to full-service agents, answer all inquiries by phone rather than email, obtain licences in each state where they represent a vendor and open multiple accounts with the group, among other conditions.Mr Atwell, who is based in Melbourne, said that although he had complied with the requests, which had led to his operating costs more than doubling, REA recently told him his account would be cancelled. He said REA saw his business as a threat."They have systematically targeted the agencies with the largest number of listings and the lowest charges as there are numerous other copycat agencies operating the same model but charge a higher fee than ourselves and subsequently have minimal listings," he wrote to the ACCC.A condition placed on PropertyNow, based in NSW, was that it must negotiate sales on behalf of its clients - even if they did not want the service - or it would be barred from the site. Mr Blachut, who is a director, said he was also forced to arrange auctions, remove all non-NSW listings and open an account for each state in which he marketed a property on the website, at an additional cost of $3000 a month.The ACCC would not confirm if an investigation was under way and a spokeswoman from REA said it had not received notice of any inquiry.
© 2011 Sydney Morning Herald
