Private sales on Realestate.com.au – the truth. Interview with Andrew Blachut

by Chris Lang on June 6, 2009

Propertynow.com.au logoWe all know how important it is for the vendor to expose their house to the maximum of potential buyers, and Realestate.com.au is one of the two websites that get the most visitors. I was under impression they didn’t allow private sellers to advertise, but lately several websites started offering packages that include listing on Realestate.com.au.

Andrew Blachut has kindly agreed to clarify the situation. First, a little background: Andrew owns a successful business Propertynow.com.au and specializes in DIY realestate private sale system. In other words he helps people avoid paying humongous estate agents’ fees when selling their house.

Chris: Hi Andrew and thanks for being here. I must admit, for quite some time I’ve been confused about whether or not Realestate.com.au allowed listings from private sellers on their website.

How come you don’t offer advertising packages on the leading real estate website, Realestate.com.au?

Andrew:

Very good question and one that has almost everyone similarly confused. Let’s clarify by saying at the outset and categorically – Private sales are not permitted on realestate.com.au at the time of this interview.

Are there private sale on that site right now? Absolutely!

And how and why is this amazing contradiction occurring? Simply because the REA ( that’s the company which owns realestate.com.au ) has given up to 30 days for all private sale companies to comply with the REA’s new Terms of Service.

You see Christine the companies that are listing private sellers on realestate.com.au, are fully aware that they are in breach of the TOS and I’ve been told in writing today by the REA solicitor ( Nicole Birman ) that they have 30 days to comply with the new REA Terms of Service. They have already had the benefit of many weeks of getting away with this practice and now they have another 30 days at least.

PropertyNow is not offering the service for one reason only and that is because the REA won’t permit private sales.

We have been offered an account with the REA 3 times in the past 3 weeks and so far have declined because they are still saying no to Private sales. We seek to have their policy changed. We believe it’s manifestly unjust but we can only do something long term and meaningful about it through legal avenues or the ACCC.

Meanwhile we won’t accept our clients money on false pretenses while knowing the service is doomed within weeks.

Chris: What do you know about the companies that do offer private listings on Realestate.com.au?

Andrew:

I know of at least 6 companies breaking the REA rules. Whether or not the REA’s rules are just and enforceable, is almost irrelevant. You just can’t mislead people and take their money while blaming the REA. That won’t fool anyone. The REA must change and we won’t rest until they do, but fooling people and using false advertising is not the way.

In fact there are very severe penalties for any real estate agent engaged in false and misleading advertising , which surely this must be.
Note: theoretically only a real estate agent can have an account with the REA, so all the private sale businesses offering the REA service must be Licensed real estate agents.

I had one Private sale business tell me over the phone yesterday that he intends to continue offering the service. He’s been in the business of offering private sales on REA for just 3 months and apparently thinks he can dictate the terms to the REA ( perhaps he can, at least that’s what he told me ).

I’m glad I’m not the one who’ll be speaking with his very disgruntled clients shortly, although I bet he has a sneaky TOS of his own embedded somewhere. I also would anticipate that he will not refund anybody but we’ll see soon enough. The good fellow had the temerity to tell me that the PropertyNow service is inferior to his and if by inferior he meant “legal” then again he must be correct.

PropertyNow was offering private sales on the REA 3 years earlier than this new kid on the block, but we were forced to stop. The difference is that immediately upon the REA making it clear to me what their policy was I closed my account in protest. The account was suddenly worthless for private sellers. Neither did we accept new clients nor take money, long before the decision of the REA was official.

Christine, I’m sorry if I come across as angry but I’m sure you appreciate the gravity of this matter. You see, PropertyNow’s clients are getting a terribly rough deal in this and I perceive that it’s the fault of the REA and also the devil may care Private sale companies, who are flouting REA rules openly and without any apparent fear of the consequences for they and their clients.

I guess if you are one of the lucky ones who sells before the hammer drops you’ll think you’ve done well. For the others ( the majority ) it might be cause for legal action against either the REA or the company breaking their rules ( or both ).

Chris: Some things change over time – has the policy of REA changed? I know that you exchanged quite a few letters with them, what do they say?

Andrew:

Ah, another very relevant question Christine. The REA rewrote and published their new TOS just last Thursday ( 28/5/09 ) I am certain they did so because we have been forcing the issue with increasing strength for the past 6 weeks. The new TOS are extraordinarily tight, so much so that I personally doubt that most real estate agents with normal agencies could pass the test, let alone the FSBO companies. I say they are tight in what they require of real estate agents , who like me, would seek to assist private sellers.

But tight, is not the same as legal. Yes, you’re right we have exchanged a good many letters and they have approved our account and offered it to us on 3 separate occasions.

Chris: Andrew, in your opinion, should people trust the websites that are offering advertising on REA and why?

Andrew:

Categorically not.

These companies are putting financial gain ahead of Duty of Care to their clients by way of through truth in advertising. If the companies are even mentioning to potential clients that the REA may dispute their listings, that in itself is no defense.

They are profiteering while they can and the noose is about to tighten on them. There is a way to approach this problem and ripping people off is not part of the solution.

Chris: Do you think REA is going to allow private vendors on their website soon?

Andrew:

Hmm?? That’s truly the sixty four thousand dollar question Christine.

I think they will be dragged kicking and screaming through the courts and/or via the ACCC. They will resist and they have very deep pockets. They receive literally millions of dollars every month from agents. If we sue we could be kept in court for years.

Agents line the REA pockets and they won’t abandon them easily.

Let me put it to you this way Christine. About 3 years ago a State Manager of the REA said to me, in Port Macquarie “while ever I’m in charge there will be no private sellers on realestate.com.au”. That manager is still on the REA and in a very senior role.

I can only hope that the public good will eventually be served through our legal system because that is the only avenue that can succeed. Remember that Telstra was forced to share it’s lines with Optus and others ….and Telstra is bigger than the REA. Of course a 900 million dollar company such as the REA can make it very difficult for PropertyNow and others who seek justice, equity and change… but public pressure in tandem with the legal system, can work wonders. It’s certainly a fight worth fighting.

Ask any independent person whether they feel that they should have a right to access the largest real estate website in Australia ( without the restrictions on use it currently imposes ) and the answer is obvious. Ask a private seller if it’s fair and it’s even clearer.

So yes, Christine, it’s a matter of time, but if I am framing the odds, I think it may take many months and quite possibly years to achieve this long overdue change. One thing’s for sure PropertyNow will be leading the charge.

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