CON­CERN OVER FINDER FEES

Weekend Courier - - Wafl -

AGENT finder ser­vices are again un­der fire from the real es­tate in­dus­try, with the Real Es­tate In­sti­tute of Aus­tralia (REIA) ask­ing the Royal Com­mis­sion into Mis­con­duct in the Bank­ing In­dus­try to treat them the same as fi­nan­cial ad­vis­ers and be di­rectly re­mu­ner­ated by the prop­erty seller.

The sub­mis­sion comes fol­low­ing the Com­mon­wealth Bank and Lo­calA­gentfinder en­ter­ing into a part­ner­ship ear­lier this year.

REIA pres­i­dent Mal­colm Gun­ning said agent finder ser­vices por­trayed them­selves as im­par­tial con­sumer ad­vo­cates of­fer­ing a free service to choose the most suit­able agent for the seller, how­ever the re­al­ity was very dif­fer­ent.

“Only those agents that are reg­is­tered, or are in some way as­so­ci­ated with the se­lec­tion service will be re­ferred to the ven­dor,” he said.

Mr Gun­ning said while the service ap­peared free to the ven­dor, the agent finder service was re­mu­ner­ated by the agent it rec­om­mended.

“The se­lec­tion ser­vices charge the agent around 20 per cent of their com­mis­sion and the agent will reg­u­larly seek a higher com­mis­sion to off-set the costs of the se­lec­tion service,” he said.

“The ven­dor thus pays more and does not nec­es­sar­ily have the most ap­pro­pri­ate agent.”

Mr Gun­ning said there was a con­flict of in­ter­est that needed to be ad­dressed when the service provider was re­mu­ner­ated by the agent they rec­om­mended.

“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,” he said.

REIWA sup­ported the sub­mis­sion and pres­i­dent Hay­den Groves said agent finder web­sites needed to be 100 per cent trans­par­ent about their fees so the gen­eral pub­lic were clear on ex­actly what they are pay­ing.

“In the same way that fi­nan­cial ad­vis­ers must be di­rectly re­mu­ner­ated from the client, ven­dors should be pay­ing the fee up­front, not dis­guised as part of the cost of hir­ing the agent,” he said.

In 2016, REIWA launched reiwa.com Agen­tFin­der to pro­vide West Aus­tralians with a free al­ter­na­tive to the com­mer­cial agent finder web­sites. “reiwa.com Agen­tFin­der is an in­de­pen­dent, cred­i­ble source for find­ing a pro­fes­sional real es­tate agent or prop­erty man­ager,” Mr Groves said.

“Un­like other agent finder web­sites, reiwa.com Agen­tFin­der is com­pletely free – for both the pub­lic user and the agent.

“The ven­dor’s pre­ferred agent won’t be hand­ing over a por­tion of their com­mis­sion for the ven­dor’s busi­ness.”

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