After a number of damning reports in Fairfax Media – which owns Domain – LocalAgentFinder chief executive officer Matt McCann says he’s undertaken an extensive review of operating practices and procedures since he was appointed 10 weeks ago, and will be introducing changes in the new year. The admission comes as more agents continue to slam the site for not comparing agents as it has always claimed it does, and for charging them commission, even when they may have had a prior relationship with a customer. They’re also angry that the company then threatens legal action if it’s not paid. McCann is promising an overhaul. “Since my arrival, I have had all of our advertising and our new TV creative reviewed and changed,” he says. “[It will] now include the following representations: LocalAgentFinder does not compare all agents in the market; and LocalAgentFinder is paid a fee for each property that sells from a recommendation we make. “As for the articles published by Domain over the past two weeks, we believe they are not representative of the way the agents within our network find their experience with us and some of the changes outlined … will continue to improve that.” But Brisbane real estate agent and auctioneer Bob Trendle says his experience has been exactly the same as the agents who have previously aired their grievances. “I was very grateful for those stories as suddenly I realised I wasn’t alone,” he says. “I realised I wasn’t the only person being targeted. “To date, I have spent over 10 hours sorting out their errors, mistakes, threats to invoice me, false invoices and so much more. I’ve been in real estate a long time so I haven’t allowed the stress of their threats get to me, but I suspect they will have gotten to a lot of other people.”
LocalAgentFinder operates a “vendor lead” business which promises to find the best agent for a potential seller’s needs. Yet the only agents recommended are those registered on their site, and the information given is exactly as provided by those agents.
Although the site advertises itself as “free”, it takes a percentage of the agent’s commission from a sale. McCann says such representations are made in the context of “free to the consumer”, with clear statements that LocalAgentFinder is paid a fee from the agent “when a property sells based on a recommendation we have made”. “We certainly hope these changes will deal with the pain points felt by agents.
The reality is that for many agents, we provide a very useful, trackable and accountable service, and we are seeing an increasing number of customers using our site, with traffic of over 100,000 each month.” Some agents say they like the service. Joey Eckstein, sales manager of Wilson Estate Agents in Caulfield, Melbourne, says he’s been using them for 10 to 11 years when they first traded as SellMyCastle. “I think I was one of the first,” he says. “It’s a great platform to get consistent leads that most of the time genuinely want to sell their properties. “I haven’t had any problems or disputes with them. I believe they have a pretty fair system if you can show you’ve been in communication with a client in the past, so you don’t have to pay the referral fee. It’s a win for everyone.” Trendle, however, says he won’t be going back to the company and isn’t convinced by the changes outlined.
“It’s interesting now they’re saying they’re going to change their business model, as obviously they have a lot of issues, but I’ve made a decision to have nothing else to do with them,” he says. “Their ethics seem to have gone out of the window in pursuit of the almighty dollar; they seem to have a god complex. They think they own everyone and can charge anyone’s commission, even when they’ve done nothing.” Trendle, of RE/MAX in Wynnum, Brisbane says he’s had no fewer than five emails from LocalAgentFinder on one property that he hasn’t even listed, let alone had anything to do with its sale. The latest email from the company, however, asks him to advise when the sale is finalised, so it can invoice the agency a fee of 0.375 per cent of the final property price, plus GST, payable within seven days of settlement. He said the company only backed down when he threatened to involve a solicitor. McCann says he will be changing the prior appraisal time frame from 60 days to 90 before referral; will be putting a time limit on the expiry of referrals of 12 months – when there was no expiry previously; and the company will accept that an agent has a relationship with a client when it has a property management agreement in place.
Large sectors of the real estate industry have already distanced themselves from the company, however. The head of the Real Estate Institute of NSW, John Cunningham, has directed his agents to stop using LocalAgentFinder and a similar recommendation site, OpenAgent. The CEO of the industry body, Tim McKibbin, has called for new legislation to cover them, saying consumers don’t “receive a service whatsoever”.
NSW Fair Trading is monitoring operators after being notified about their actions, while the chief executive of the Real Estate Institute of Victoria, Geoff White, says the best agents don’t need to be involved with such sites. One Victorian agent, Ash Marton of Ash Marton Realty in Frankston, refused to pay invoices despite threats of action in the Victorian Civil and Administrative Tribunal. On the day of the hearing, Sellmycastle Pty Ltd, trading as LocalAgentFinder, suddenly withdrew all its claims.