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Agents' boycott of Trade Me hurting vendors

This week has seen significant media interest in the boycott of Trade Me Property by agents particularly in the Hawke's Bay and Hamilton City. Articles written have proffered opinions that "The real estate industry has a lot more to lose than Trade Me" and gone as far to look to whether the Commerce Commission will investigate the potential breach of the Commerce Act or whether the governing body of the Real Estate Agents Authority will clarify if the action of these agents is against the best interests of the vendor as the agents' clients.

shared my opinions with Bernard Hickey as, in my judgment, this is a matter that should not result in vendors' property listings being used as pawns in this standoff.

The fact is that there are vendors in these two regions of the country who are missing out on valuable marketing on Trade Me and as ever with the web, the data is there to back up the story.

Firstly look at listings. Generally Trade Me and Realestate.co.nz enjoy the support of all licensed real estate agents across the country (up until this time), Trade Me holds a larger stock of listings nationally as they feature private sale listings which are usually around 15% to 18% of the total of property for sale.

Looking at the Hawke's Bay data on the respective websites today based on comparable listings of residential and lifestyle property shows that there is most definitively a boycott. Compared to a similar sized area such as Tauranga, the Trade Me listings are down 55% as compared to Realestate.co.nz in the Hawke's Bay whereas the listings ratio should be similar to Tauranga with 15% to 20% more - this means that about 1000 properties in the Hawkes Bay are not being featured on Trade Me Property. These are listings from offices of Property Brokers, Tremains, Sotheby's and others. Importantly these offices have withdrawn all the listing - recent listings as well as older listings.

Agents boycott Hawkes Bay.png

These circa 1000 listings are not attracting potential buyer interest from the more than 120,000 property buyers per day using Trade Me Property.

As a buyer accustomed to using Trade Me when searching for property there is no recognisable experience that will tell a person that there has been a boycott. The functionality of the web allows for tailored searches by location, price and type and at no point do you get a sense of the number of listings in relative terms. That is why the level of viewing of individual properties in the Hawkes Bay has not changed since the boycott began. This can be proved by this simply analysis.

Taking two properties that are advertised by Ray White (who have made no mention of their intention to join any boycott) that were both listed on the 5th February. The level of viewing on these properties comparing Realestate.co.nz and Trade Me continues to show the general trend of a 10+ fold higher viewing on Trade Me Property.

Hawkes Bay 1.png

 

Now look at a couple of examples of the c. 1,000 listing not shown on Trade Me Property, they are not getting more viewing on Realestate.co.nz because they are not on Trade Me - here are comparable stats. It clearly shows that there is no greater viewing on Realestate.co.nz because these properties are not on Trade Me Property.

Hawkes Bay 2.png

The vendors of these properties are not receiving the exposure they should. The scale of the loss is substantial - every day these 1000 properties are missing potential buyers, which has the potential of lessening the sale impact and competitive pressure in the market. The fact is the medium of choice when searching for property by over 90% of home buyers is the web. There are only two websites for real estate in New Zealand and Trade Me dominates to such an extent that not being on the site is marketing madness.

What perplexes me is that the real estate industry continues to think of online advertising as a cost, in the same way as they think of the photocopier as a cost or the phone system. They do not think this way about their preferred medium of choice - the newspaper or property magazine, that they think of as a re-charged advertising medium.

A single property advertised on Trade Me Property cost them $159 + GST. That advert works every day to market that property until sold and would costs private seller upwardsof $400. So why don't they front up to their clients and say " Our recommendation is that we market your property on Trade Me Property at a cost of $200 and Realestate.co.nz for $100 - that way your property will reach 90% of buyers" (that cost includes a small margin for admin - which they need to disclose under the REAA). If they are not confident to ask for the money upfront they could suggest adding it to the commission upon the successful sale.

This boycott is hurting the clients of these real estate agents, vendors will very soon be up in arms and potentially pulling their listings and moving across to agents who don't treat their property as a pawn in the internal squabble between Trade Me Property and the agents. These agents would be wise to reflect that to the average kiwi Trade Me is far more loved than a real estate agent!

For reference here are the links to these listings highlighted above:

Ray White Listing #1 "When location counts" on Trade Me

Ray White Listing #1 "When location counts" on Realestate.co.nz

Ray White Listing #2 "Seriously Special" on Trade Me

Ray White Listing #2 "Seriously Special" on Realestate.co.nz

Property Brokers Listing "Rural views" on Realestate.co.nz

Tremains Listing "Modern Brick Home" on Realestate.co.nz

Former Realestate.co.nz CEO Alistair Helm is founder of Properazzi.

Comments and questions
19

Kudos to Trade Me for waging a very effective campaign to make vendors think agents are being unreasonable, and disguising the fact that they as a very large corporation quadrupled fees which are, in one form or another, going to be passed directly on to people selling their homes.

The stats for Trademe do not tell a very accurate story at all, it is not uncommon for a property on Trademe that trickles along with 10-12 views a day suddenly experiences a remarkable surge and has a 1000 or more views in a day....... Sudden dramatic interest in the property or something a little more obscure, next day back to 10-12 per day.......... Don't believe the numbers on face value..........

As a licensed real estate agent i have never experienced as you say a "1000" views in a day on a trademe property listing when only getting a daily average of 10-12. Although i do agree you shouldn't take the numbers on face value you need to be a little more realistic.
Generally trademe is combined into a marketing campaign and is more often not packed apart of a bundle and is usually one of the smallest forms of marketing expense.

Happy to send you examples Rowan, one with 996 the other with 1320 having been on market 2 months, total at end of that week, 1388..........

Trade Me fees are so damn high these days no wonder people a flocking to alternatives... the popularity of alternatives will increase as they get posts...

"Flocking to alternatives" you say.

Define flocking if you would please?

Like to give me some facts and figures to support your statement or is this just more hyperbole from a agent?

You see I don't agree with you that people are flocking to other alternatives.

I am not in real estate sales but in marketing and I don't see anything that backs up your statement.

I am happy to be proved wrong.

So Ex TradeMeUser convince me if you can please.

I look on all sites for property. As a vendor I want my advertising dollar to go as far as possible . Be careful trademe .

Agents are not boycotting Trade Me as I understand it - they have just said they will no longer pay for the listings. They are not saying "we refuse to allow listings on Trade Me" - just that vendors will need to pay for it. They have withdrawn their current portfolio in protest even though it costs them nothing to keep the listings there. Trade Me had to expect some pushback with a 400% price increase (through a price structure change).

Agents need to fight now - this is the beginning of annual price increases from Trade Me. It is not about todays fee it is about the principal going forward. Agents missed the opportunity to fight Trade Me at the beginning (by going on the site initially), if they dont fight now they have no chance going forward.

Agents have long pushed print advertising. There are long established relationships that are managed closely. Newspapers are dependent upon agencies for significant revenues and see the agencies as their customers. Trade Me on the other hand sees the retail end user (the home owner in this case) as their customer and view the agencies as impediments in many respects eg Sam Morgan calling agencies Turkeys, and Trade Me writing directly to the home owners. Trade Me wants to cut the agencies out. The agencies are smart enough to see this - of course they are going to fight!

The examples use here are misleading - comparing the realesate.co.nz views on a property in Waipukurau (Rural views) with a Napier one (Seriously special) is not valid. A Waipuk property having the same number of views as a Napier one actually defeats the argument. For those from the Auckland big smoke its like comparing a property in Central Auckland with one in Tuakau - you would expect the city center one to have many more views.

Grant what additional value or innovation did they do to justify a 400% increase in fees ?
I am surprised all the agents haven't left after such a large increase. If all agents move surely Trade Me would have very little property listings left therefore the buyers will go to whatever site the listings have moved too for example realestate,co.nz
Funny to see the commerce commission run to the defense of the Trade Me monopoly for "anti competitive practices" where was the commerce commission when Trade Me has been running anti competitive practices for years in various industry's.
That type of increase and contempt for the customer (agents) would not be tolerated in any other western country.

Matt - Trade Me have tried to justify the fee increase based on their traffic. There has been little (or no)innovation on Trade Me property for some time (but various additional revenue generating ad-ons in advertising etc for Trade Me).

However, as Alistair has commented elsewhere Trade Me is still relatively in-expensive compared to the Oz sites for example.

Trade Me have handled this change poorly in my view and it looks a bit like a rush job because they needed revenue to meet financial projections.

I personally think the unbundling of advertising costs for consumers is a good thing. Let the homeowner decide where they will advertise and don't have it bundled into a general commission payment.

TME are bizzare. They have a virtual monopoly on any number of products - which makes sense as liquidity is a natural monopoly, and almost impossible to fragment. For TME to call the CommComm (clearly what happened "no formal complaint" means that their lawyers picked up the phone, or had a coffee chat in Wellington) is crazy. Sam calls agents Turkeys and then backdoors his clients by shafting them to CommComm for NOT USING TME. How can NOT USING something be anticompetitive. Does TME have a right to their business? Clearly Sam, Jon and the rest believe that to be the case. Hubris in extremis.

Interesting that you missed the point completely. Trademe went from a subscription model that allowed a capped monthly cost for an agency so that once 8 or 10 properties were listed adding another 10 was free to simply announcing that each property would now incur costs.
The arrogance of trademe does their business no favours.
Passing these costs on to vendors is not so straight forward and if they believe it is so critical to the sale of their property then I am sure market forces will prevail.
Real estate specific websites tend to generate better quality enquiry as you are on them looking specifically at property rather than getting distracted in your search for a second hand dryer or lawn mower on trademe.
Also how balanced is your view as ex CEO of realestate.co.nz and how did your real estate sales person experience work out ?

Real shame to see such "emotjonal" comment in an industry claiming to act "professionally" and for such large percentage fees. It really shows the dark side of the greed involved of those who sell real estate in a legal licensed way. If they could they would obviously stifle and suffocate anyone and any method to sell a house other than their own. They are not advocating a free choice or fairness.

Ironic agents complaing about fees when they charge such extortionate fees themselves

The fear here for Real estate Agents is that the punters are quickly realising they can buy and sell houses themselves - no agents required. This is why the obsession to list properties only on RealEstate.co etc.

Good on the real estate agents....dont accept unjustified fee increases. What is really annoying is how TM is now using TV advertising to the end customers and getting them to tell the agents to use TM... it's treating them as mere pawns in this whole sorry issue.

The arrogance of having a monopoly on property listings by trade me could change dramatically once google property goes into full swing in NZ . Trademe's days will be numbered !

My reading of the comments from agents on this issue and not only pertaining to this site is that its so many of you are whinging about poor me,.

My poor business. Office fees are going to increase. My advertising budget is going to increase so much, poor me.

You agents that are whinging need to get over yourselves and think of what your vendor wants, not your own selfish needs.

I have put the challenge out to all you real estate agents to give me a general break down of your marketing costs as a proportion percentage wise of your fee.

To date not one of your residential agents have the courage of your convictions to take up the challenge.

I look as a marketer at where so many of you are spending your advertising dollars and the quality of your marketing skills and a large proportion of you are useless at getting the best for your vendors.

How many of you test and measure every advert you place?

If you don't how can you know where best to place your advert on behalf of the vendor to get the best results.

You talk about the increase in TradeMe fees.

Don't you think it's a bit rich coming from agents that every time the price of a property increases they are in affect getting quite a substantial pay increase yet their fixed costs in the main remain fairly static or maybe increase at the CPI rate.

Agents you promote yourself that you always work in the best interest of your vendor so show us the proof and start thinking what is in the best interest of your vendor.

I don't think a agent removing a vendors listing from TradeMe with out the vendors knowledge or prior permission is working in your clients best interest nor do I think it is professional or ethical.

Trademe can be a right pain as idiots send emails wanting an information pack etc or just a price leaving no contact details apart from an email address and noone ever knows wether or not the enquiry is genuine or someone simply collecting information for fun or other reasons which is a hobby for some.Trademe should insist on a contact ph number field to validate the enquiry and the site then becomes far more useful.That would be a good test for trademe systems so lets see if they do it.