TM raises charges for Real Estate Agents

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TM raises charges for Real Estate Agents

Post by digidog » Tue Sep 24, 2013 5:12 am

Until now, registered real estate agents have enjoyed a bulk fee deal on TradeMe. They pay a monthly "base fee" of $250 plus $124 for each per sale listing. However the maximum monthly payment is capped at a maximum of $999 - and that works very nicely for agencies with hundreds of listings. (All figures exclude GST).

http://www.trademe.co.nz/Help/Services- ... gents.aspx" onclick="window.open(this.href);return false;

But that's about to change. Having most big agencies onboard has allowed TM to grow their property marketplace into the biggest in NZ, and now they sense an opportunity to grab even more fees from agents. So from 1st November, the base fee of $250 disappears and so does the cap. Each listing will cost $159 + GST and while that's still a lot cheaper than the $350 a pop most punters pay, the removal of that cap will see some agencies coughing up huge monthly amounts to TradeMe. NBR calculates that for a small agency this will double their TM fees.

http://www.nbr.co.nz/article/trade-me-m ... -ck-146193" onclick="window.open(this.href);return false;

Will the agents revolt? Probably. Look out for a facelift for the realestate.co.nz site and watch out for TM listing numbers dropping. At the moment a search on all properties for sale shows "Over 32000 gallery listings" so it's hard to keep an eye on that one. But here's a metric we can surely measure.

Residential for sale: Auckland - 9055 listings (24.09.13)

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Re: TM raises charges for Real Estate Agents

Post by marika3 » Sun Dec 01, 2013 5:14 pm

Residential properties for Sale

Northland(6031)
Auckland(10348)
Waikato(7595)
Bay Of Plenty(4969)
Gisborne(294)
Hawke's Bay(1741)
Taranaki(1453)
Manawatu / Wanganui(3278)
Wellington(3973)
Nelson / Tasman(1190)
Marlborough(1303)
West Coast(1549)
Canterbury(5338)
Otago(4304)
Southland(1563)

2.12.13
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Re: TM raises charges for Real Estate Agents

Post by digidog » Sat Feb 08, 2014 1:32 am

Here's a slightly confusing story. Instead of investigating TradeMe's huge fee rise which some might see as an abuse of it's number one property sale position in the NZ market, it looks like the Commerce Commission is instead investigating agents who refuse to list properties with TM. Surely anyone selling a house can choose whichever agent they like? If they want their property promoted on TM, they only need to choose an agent who uses TM? Or is the Commerce Commission in the business of propping up TM's share price?
The Commerce Commission has confirmed it is investigating real estate agents boycotting Trade Me.

Commission spokesman Gordon Irving said the situation with the real estate ads was of interest to the organisation.

"I can confirm the commission is investigating this issue. It is too early to determine the possible outcome of the investigation," he said.

Market analysts had previously raised the issue, saying real estate is a major source of revenue for Trade Me so the boycott would negatively affect the business.

The Herald has reported that a group of real estate agents said they would boycott Trade Me after the company announced price rises.

Some vendors have complained about their places not appearing on Trade Me as they wanted.

Trade Me chief executive Jon Macdonald said late last year that if Hamilton agents withdrew listings it would disadvantage property owners and that a listing fee of under $200 represented good value for money.

http://www.nzherald.co.nz/nz/news/artic ... d=11198170" onclick="window.open(this.href);return false;

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Re: TM raises charges for Real Estate Agents

Post by digidog » Mon Feb 10, 2014 9:28 pm

How dare you refuse to advertise on TradeMe?
The group of Hamilton real estate agents who are boycotting TM property listings as a protest against their latest price hike must have really pissed TM off. So TM has taken the unprecendented step of contacting the property owners directly to point out that they're not being served by their agents. I would have thought this was stepping over the line in commercial terms. Can an advertising medium (TM) really bypass their clients (the agents) and badmouth them behind their backs?
Trade Me's decision to write directly to 1300 affected homeowners in Hamilton and Hawke's Bay, pointing out their listings had been pulled and offering to reinstate them for free was cheeky, even though it insists its objective was not to cause trouble between agents and their clients.

Founder and director Sam Morgan has only added fuel to the flames by calling agents "turkeys", saying they cut off their nose to spite their face.

It is not the first time Morgan has made comments that may have clicked with the public but caused Trade Me embarrassment. It is understood he was chastised in 2012 for labelling rival site auction Wheedle a "joke", in a tweet he later said he regretted.

Analysts are divided on the damage done. Morningstar analyst Nachiket Moghe believes the big agents realise they "can't get away with not advertising on Trade Me" and that smaller agents will come to the same conclusion over time. "They have got such a strong brand and so many ‘eyeballs'."

But another analyst said it was a moot point within the investment community whether Trade Me would succeed in driving through the fee increases. It was a big issue, given property listings had been viewed as one of the major drivers of profit growth for Trade Me, he said.

"The general items marketplace is very mature. ‘Jobs' is very competitive; they can't do much there because of [rival] Seek, so you are left with motors and real estate."

Trade Me clearly has a deeper beef with the way the real estate industry works. It is relevant to consider realestate.co.nz is not open to private listings. But trying to serve the industry while also berating it is a difficult tightrope to walk.

http://www.stuff.co.nz/business/opinion ... rs-spooked" onclick="window.open(this.href);return false;
It's been quite a while since we've seen Sam putting his gumboot in his mouth like this.

TM's biggest growth area at the moment is property, but agents control most of the property sales in New Zealand. The agents already have a viable portal in realestate.co.nz which costs them a lot less to advertise on than TM. If that portal receives an upgrade and enough agents join the move, TM could find themselves backing down on this fee increase sooner rather than later.

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Re: TM raises charges for Real Estate Agents

Post by marika3 » Thu Feb 13, 2014 6:29 pm

Residential properties for Sale

Northland(5865)
Auckland(10034)
Waikato(6683)
Bay Of Plenty(4900)
Gisborne(296)
Hawke's Bay(896)
Taranaki(1053)
Manawatu / Wanganui(3219)
Wellington(4027)
Nelson / Tasman(1174)
Marlborough(1246)
West Coast(1754)
Canterbury(5111)
Otago(3935)
Southland(1560)

14.2.2014
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Re: TM raises charges for Real Estate Agents

Post by digidog » Sat Apr 05, 2014 12:50 am

Alistair Helm (the former CEO of realestate.co.nz) has an interesting opinion piece in today's NBR. It appears that TradeMe's new pricing structure for real estate listings is having an impact on their listings.
For the past 3 years at least Trade Me Property has had a subscriber base at least equal to Realestate.co.nz or close enough to make little difference and so from the perspective of licensed agents the two sites have been line-ball. On top of this Trade Me has an additional stock of listings from private sellers which on average have amounted to around 16% of the Trade Me listings which generally means Trade Me has around 18% to 19% more listings than Realestate.co.nz.

As of today that advantage to Trade Me has disappeared and Realestate.co.nz not only has more listings (a margin of 4%) but by applying an estimation factor for private listing, Realestate.co.nz has considerably more licensed agent listings (a margin of 18%).
The difference is most noticeable in the Hawkes Bay where agents came together to boycott Trade Me listings. Many of these agents listings only appear on Realestate.co.nz. This graphic tells the story perfectly.
Image

Last September, realestate.co.nz was attracting just over 100,000 visitors each week. In the last 6 months that traffic has virtually doubled.
http://www.similarweb.com/website/realestate.co.nz" onclick="window.open(this.href);return false;

I'd recommend reading the story on Helm's own Properazzi blog - the graphics are much more readable.
http://properazzi.co.nz/insights/reales ... e-property" onclick="window.open(this.href);return false;

But here's the NBR version for reference:
http://www.nbr.co.nz/article/realestate ... e-property" onclick="window.open(this.href);return false;

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Re: TM raises charges for Real Estate Agents

Post by marika3 » Sat Apr 05, 2014 4:17 am

Northland(5622) -243 since Feb
Auckland(10275) +271
Waikato(6232) -451
Bay Of Plenty(4575) -325
Gisborne(296) no change
Hawke's Bay(786) -110
Taranaki(988) -65
Manawatu / Wanganui(2697) -522
Wellington(3904) -123
Nelson / Tasman(1045) -129
Marlborough(1171) -75
West Coast(1572) -182
Canterbury(4946) -165
Otago(3421) -514
Southland(1446) -114

5.04.14
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Re: TM raises charges for Real Estate Agents

Post by marika3 » Sat Apr 05, 2014 5:13 am

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Re: TM raises charges for Real Estate Agents

Post by digidog » Sat Apr 12, 2014 3:44 am

This story is a month old but it contains a few of interesting facts.

* TradeMe's property head Brendon Skipper has been poached by realestate.co.nz.

* By February, real estate offices accounting for over half of all 'for-sale' listings were on the new pricing plan.

* If TradeMe succeeds in forcing real estate agents to accept the higher fees, it will add $22.5 million to their property advertising revenue by 2017.

* TradeMe fears it might not be able to push through all the increases it seeks with the 'big six' agencies, who control 80 percent of listings. Existing agreements with the large national franchises all expire by the end of 2014 and Trade Me is seeking to progressively renegotiate terms.

http://www.nbr.co.nz/article/trade-me-m ... -bd-153098" onclick="window.open(this.href);return false;

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Re: TM raises charges for Real Estate Agents

Post by digidog » Thu May 22, 2014 8:49 pm

The real estate agents' boycott of TradeMe appears to be biting.
Deutsche Bank analyst Steven Ridgewell said Trade Me's admission this month that property listings on its website had fallen 10 per cent since October suggested the impact of an alleged "boycott" by real estate agents had worsened since it downgraded Trade Me to a "hold" in February.
The company's shares have now lost just over a third of their value since they reached an all-time high of $5.43 exactly a year ago.

It is understood a "sell" recommendation from broker UBS helped twist the knife before a modest rebound saw Trade Me shares close up 10 cents at $3.61 yesterday.

Shareholders who bought into Trade Me in 2011 at its original listing price of $2.70 a share are still up on their investment but would have seen most of their gains disappear over the past year.

http://www.stuff.co.nz/business/industr ... hare-value" onclick="window.open(this.href);return false;

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Re: TM raises charges for Real Estate Agents

Post by digidog » Fri Jun 13, 2014 10:22 pm

Alistair Helm has an update on the TM property fiasco. This graphic shows the drop in listings by agency between May to June.

Image
In the month of May Trade Me Property only displayed 3 out of every 4 of the new properties listed in the month on Realestate.co.nz. That disadvantage was even more significant when you look at the new listings in May from the largest real estate company Harcourts which displayed less than 6 out of 10 of it's new listings on Trade Me Property; for LJ Hooker it was only half of all new listings. Ray White continues to show what looks to be staunch support with 95% of all new listings in the month featured on Trade Me Property.

http://properazzi.co.nz/insights/trade- ... o-struggle" onclick="window.open(this.href);return false;

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Re: TM raises charges for Real Estate Agents

Post by digidog » Thu Jul 31, 2014 6:23 am

Ten months on and TradeMe have backed down. They've introduced a new fee structure for real estate agents that should begin to stem the flight of agencies to realestate.co.nz.

TM have a page showing the changes: http://agents.trademe.co.nz/" onclick="window.open(this.href);return false;

One of the bigger changes sees listing fees based on a property's RV - $159 for $450k and above, and $99 for lower value properties. And TM's subscription service has returned, with unlimited listings for agencies in Auckland, Wellington and Christchurch costing $1,399 per month (40% more than the original subs) and other agencies paying $999 each month.

I'm sure the Hawkes Bay agents who started the rebellion against TM fee increases are being hailed as heroes by their peers.

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Re: TM raises charges for Real Estate Agents

Post by digidog » Fri Aug 01, 2014 4:55 am

TradeMe's main (only?) competitor in the online real estate market - realestate.co.nz - has wasted no time in describing TM's backdown as "desperate fee cutting". Their chief executive is Brendon Skipper who used to run TradeMe's property unit. TM's share price has dropped by 14% so far this year.

http://www.nzherald.co.nz/business/news ... d=11302663" onclick="window.open(this.href);return false;

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Herald launches commercial property site

Post by digidog » Mon Aug 04, 2014 6:31 am

The Herald has launched a commercial property website. Once you get past the annoying "sign up now" pages, the site is clean with an endless page style. It's based on the Herald's fortnightly commercial property section and looks to fill a gap in the market, possibly taking commercial listings away from TradeMe? Good luck to them.

http://truecommercial.nzherald.co.nz/" onclick="window.open(this.href);return false;

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Re: TM raises charges for Real Estate Agents

Post by digidog » Wed Dec 16, 2015 10:02 pm

The Commerce Commission is prosecuting most of our big real estate companies for colluding to pass on TM listing fees in full to clients, and pocketing TM's fee discounts. Here's a list of the companies being prosecuted.

Barfoot and Thompson
Harcourts Group
LJ Hooker
Ray White
Bayley Corporation (settlement pending)
Property Page
Monarch Real Estate (trading under the Harcourts banner),
Lodge Real Estate (Hamilton) Limited
Lugton's
Online Realty (trading under the Ray White banner)
Success Realty (trading under the Bayleys banner)
Property Brokers in Manawatu
Manawatu 1994 Limited (trading under the LJ Hooker banner)
Unique Realty (settlement pending)

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