• REIA calls for commercial agent finder websites to be transparent

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    photo-man-computer-seriousThe Real Estate Institute of Australia (REIA) have called for agent finder websites to be directly remunerated by the vendor to avoid misleading consumers about the real cost of using agent selection services.

    In their submission to the Royal Commission into Misconduct in the Banking Industry following LocalAgentFinder and Commonwealth Bank entering into a partnership in February, REIA said there had been a proliferation of businesses established to assist vendors selling their homes by choosing an agent for them.

    REIA President Malcolm Gunning said it was disappointing that the Commonwealth Bank had partnered with LocalAgentFinder considering financial advisers were obligated to be transparently remunerated by the client.

    “These [agent finder] businesses portray themselves as an impartial consumer advocate offering a free service to choose the most suitable agent for marketing their property. On the surface this appears very attractive, the reality is however very different.

    “Only those agents that are registered, or are, in some way associated with the selection service will be referred to the vendor. The agent selection service is nothing more than a listing service for agents who subscribe to the service.”

    “The selection services charge the agent a fee of around 20 per cent of their commission and the agent appointed will regularly seek a higher commission to off-set the costs of the selection service. The vendor thus pays more and does not necessarily have the most appropriate agent,” Mr Gunning said.

    “Whilst REIA supports assisting vendors to select the agent that best responds to the vendor’s specific needs when the service provider is remunerated by the agent that they select, there is a conflict of interest which should be addressed.

    “Just as financial advisers are required to be remunerated by their client rather than the investment house where the client’s money is invested, REIA believes agent selection services should be remunerated transparently by the vendor.”

    To find and compare REIWA real estate agents, use reiwa.com AgentFinder – it's free to both vendors and agents.