In today’s show we talk to Marta Higuera, one of the CEOs from Open Agent.
You might have seen the ads on TV that promote a website that offers sellers the opportunity to get assistance to select the best agent to sell their property. Mixed with that is the inference that if you go with them you will get up to $100,000 over your reserve. The site is Open Agent. There a number of similar sites offering the same inducements.
Kevin: Earlier in the show, I played an interview that I had recorded with Mark Dwyer about a website called Open Agent, which is one of many of the websites that are popping up now – there are quite a few of them – that purport to work with sellers to help them find the best agent.
You would have heard some of the concerns expressed by Mark. In fairness, we’ve asked one of the CEOs from Open Agent, Marta Higuera, to join us to answer some of those questions. She joins me now.
Marta: Good morning, Kevin. How are you?
Kevin: Very well, thank you. What are the qualifications of the people who are working in your site in terms of working with potential sellers to help them get the best price? Are they qualified agents?
Marta: No, they are not qualified agents. We don’t try to replace agents here. Open Agent was born to try to help the consumer. In some suburbs in Sydney, there will be hundreds of agents in a given location, and consumers are trying to figure out which ones are the best, which ones are just coming to the industry, what they have done and what their customers have to say.
We try to provide that information to consumers, which we believe is in the best support of the industry and the best agents out there.
Kevin: On that point, you say that you’ll help them get the best agent. How do you assess the best agent? From what I can see, it’s purely on the number of sales they make. What other measures do you use?
Marta: Last year, we helped more than 10,000 people find a real estate agent.
Kevin: That wasn’t my question. What I asked you is how do you assess?
Marta: I was trying to answer your question. By talking with these 10,000 people, we know what they think about their agents. There are 30,000 or 40,000 agents that those people have worked with and we’re trying to gather the reviews. These people are telling us whether the agents are actually doing what they are telling them they are going to be doing, what kind of service they are getting on top of the sales data, which is not easily available for the average person on the street.
I think it’s a combination of sales and also their past customers experiences. We work with the top 15% of agents in the country.
Kevin: Sorry, let me ask you a question about what you said just then. You’re working with the top 15% of agents in Australia. Is that correct?
Kevin: Have all of these agents agreed to pay you their 20% referral fee?
Marta: That’s right. I know that was a concern, but referrals at 20% is industry standard.
Kevin: That’s agent to agent. That is not agent to third-party site, though.
Marta: The concern that Mark and you have, which is that agents refuse to work with us, that has not happened with those agents, because if you had worked with us… I encourage you…
Kevin: That’s not the feedback I’m getting, Marta. I’m getting feedback from agents who have said they wouldn’t deal with you for that very reason.
Marta: Kevin. Every single agent that does say no to us gets escalated to me because we want to work with the top agents.
Kevin: I’m not questioning you about the relationship you have with the people who sell with you. What I am questioning is your assertion that you’re putting people in touch with the best agents. What I’m saying to you and what Mark is saying is that it’s not necessarily the best agents; it’s only the agents you’ll refer to someone who have actually agreed to pay you a fee.
Marta: What I’m saying is that the best agents don’t say no to our referral agreement, and when they do, we try to win them over. If they don’t want to work with us and it’s the best agent for that consumer, we still recommend them to that consumer.
Kevin: You will actually recommend an agent who won’t…
Marta: We tell them, “That is a great agent.” They tell me, “I’m talking with so-and-so in this suburb,” and I say, “That’s a great agent. Do you want a comparison or not? If you’re happy with that agent, carry on.” What consumers, though, are looking for here is the comparison. We would like that you guys get to know us. We are very little and we haven’t been reaching out…
Kevin: You’re actually quite big, Marta.
Marta: We are not [3:42 inaudible].
Kevin: I know you’re not. I’m trying to give you a fair go here, but I have to get through a few more questions.
In your television ad, you feature someone who says she achieved $100,000 over her reserve price. I’m not doubting that. That probably was her reserve price. It’s more a reflection of the fact that it was a low reserve and not necessarily a good agent. Would you accept that?
Marta: No, I don’t. When she actually went out with a great agent and she got a great result, that is not necessarily just the agent. What we’re trying to support here is that a great agent will get you more for your property compared with an agent who is not so good.
Kevin: We actually have an agent on the phone who has just called in. I wouldn’t have a clue what he is going to say, but I’m going to put him to air because he may have a question. I understand you want to use the name Phil, but it’s not your right name. Is that right?
Phil: Yes, Kevin. How are you today?
Kevin: Good, mate. You’ll have to be quick. What’s your point?
Phil: One, the commission they’re trying to charge is 20% plus GST. It’s not 20%. The other thing is that on the terms and conditions that they give you, the client they’re referring you to remains their client for 24 months.
In other words, if you get put up against four or five agents – as you were saying, not necessarily the best agents but the ones who will comply with their terms and conditions – if that property doesn’t get sold by the first agent and then one of your other agents in your agency picks up the listing, they’ll still claim the 20% plus GST 24 months down the track.
Kevin: Marta, is that right?
Marta: Yes, that’s right.
Kevin: How can you do that?
Marta: What’s the problem?
Kevin: Let me ask you this question. An agent will sign someone up. They can only ever sign them up for a period in Queensland of 90 days. You’re actually saying to that person that they are going to be your client for anything up to two years. Is that correct?
Marta: That is correct because there are a lot of people who come to us every year…
Kevin: But you’re not agents. You are not agents, Marta.
Marta: There are lots of people who come to us really early in the process. They are looking for a price and they are trying to meet the best agent. What we do is actually invest in following these people up for the agents, so when that 24-month clause is in there…
Kevin: Follow it up for the agent or follow it up for you? Let’s get real here.
Marta: We follow it up for the agent and we follow up for us. We are working together with our agents to do this. That clause is in there to take away a listing for an agent who has not managed to sell a house.
What we try to do in that case is actually work with the agent to educate the vendor as to why that property has not sold, which is in the case of a good agent, not because the agent has not done a good work or because of something that is happening in the market.
That is why the 24-month clause is in there. The other thing that we do is do the follow-up.
Kevin: I’m not finished with this, Marta, because I believe you are in breach of the act. I believe you’re actually asking someone to commit to you for two years. You’re telling agents the same thing. Agents can’t do that. You’re not agents.
Marta: How does that breach the act?
Kevin: You’re getting a commitment out of someone for two years to work with you.
Marta: I advertise on TV. I have a lot more regulatory bodies than any real estate agent.
Kevin: I will follow this up. I want to follow it through because I do believe you’re in breach of the act.
I’m going to leave it there, Marta. Thank you very much. We will follow it up with you during the week.
A somewhat fiery discussion there, but we’d really appreciate your feedback on this. If you had an experience with one of these websites – whether it’s favorable or unfavorable – we would like to hear about it. You can let us know your thoughts by contacting us through the website at RealEstateTalk.com.au. Just use the “Contact Us” button and send us your message.