The two major portals in Australia, Realestate.com.au and Domain.com.au both charge real estate agents by the office. The more offices an agency has the higher the price that they pay. This is just one of the pricing models. Many agencies with multiple offices are not happy with this structure and the future could see some changes to this model.
We will take a look at the different models available.
1. Per Office Model
The per office model is probably the easiest to administer and viewed by many portals to be the best system. The benefits of this model is that agencies can budget each year for their online spend. Where this model falls down is when an agency has multiple offices in a small area compared to a rival who may have one office that covers the same area. The single office agency only pays once, but the multiple office pays for each location.
Summary: Heavy discounts should apply to agencies that have multiple locations, the more locations the higher the discount. This does occur in some instances but from my knowledge it should be a set model for all agencies – not negotiated for every agency.
Per Listing Model
This is an emerging model but it places a higher strain on the portals having to administer separate accounts for each office. The only problem this model has for portals is that when agencies are in the midst of boom times they have fewer listings. In tougher times agencies have many more listings. This basically means that when agencies have plenty of revenue their costs actually decrease and when the have less revenue coming in their costs increase.
Summary: This model may have some legs, but agencies should be careful that contracts are kept to a tight increase schedule such as CPI or 3% whichever is greater each year. Listings going from $10 to $13 might not seem like a large increase but that equates to a 30% increase!
FREE Model
Justlisted.com.au do it and so does Homehound.com.au. The idea seems to be to build a portal, generate visitors and therefore add value to agents and then charge for this value. To me this is a fair enough approach but it does de value the Internet. Running successful Real Estate Portals is not a cheap business, servers, support staff, developers, Interface designers, sales staff etc.
Summary: I like some things with the Home Hound site and I completely dislike Just Listed – the site and systems are Just Plain Awful!
Finally:
I can see why some multi offices get a little peeved with the per office model, but negotiation to me seems to the the key for them, if you are not happy with the deal go elsewhere. The other models are not as good as the per office model and I hope this one is refined to be a little fairer. The per listing model will work if it is priced at a reasonable level.