By Bernard Hickey
The Commerce Commission has said it is investigating the decisions by groups of real estate agency offices in Hamilton and Hawkes Bay to withdraw more than 1,700 listings from Trade Me Property over the last three weeks.
"I can confirm that the Commission is looking into this and is currently assessing all the information," Commission Spokesman Gordon Irving told Interest.co.nz, adding there was nothing more the Commission could add.
The Commission monitors compliance of companies with the Commerce Act and in particular anti-competitive activities, including collusion to lessen competition in a market. See more detail on the Commission's role and the issue of collusion in its fact sheet on the Commission's website.
Trade Me founder and director Sam Morgan tweeted yesterday that comments by agency groups about discussing withdrawing their listings was "agency collusion at its best."
The comments from agents were first reported in this article on Interest.co.nz, which included that Trade Me had sent more than 1,000 letters directly to vendors by courier offering to reinstate their listings for free. The agency groups pulled their listings in protest at a quadrupling of fees and said keeping the listings on Realestate.co.nz was sufficient for vendors. Some are continuing to offer Trade Me listings as an optional extra with an additional fee. They are continuing to to include other advertising, including print advertising, as part of their overall packages where the agency 'absorbs' the advertising cost as part of the commission.
Some of the vendors were not informed of the withdrawal of their listings before the event, angering many. Here's comments from one vendor in this article on Interest.co.nz.
The Commission also monitors compliance with the Fair Trading Act, including whether a business is supplying the product or service it had promised to supply. See more here in the Commission's fact sheet.
The vendor commenting in the Interest.co.nz said she was very angry to find the listing had been withdrawn before the house had been sold, given she saw the listing as part of what was paid for in the agency's commission.
Industry commentator and former Realestate.co.nz Chief Executive Alistair Helm also referred to the agency's risks under the Fair Trading Act and also said the agents may not be complying with the relatively new Real Estate Agents Act (2008), which requires that agents work in the best interest of the client at all times.
Real Estate Agents Authority CEO Kevin Lampen-Smith said the Authority was aware of the issue and was monitoring it, although it had not received any complaints.
"We would expect any agent who is changing an agreed marketing strategy to discuss and agree that change with a vendor," Lampen-Smith said.
Helm said the agents were taking a cavalier attitude and a big risk that clients would not get the best price because the highest possible number of buyers had not found the agents' properties.
See more of Helm's comments in this article.
About half of buyers find their homes through Trade Me, which is the preferred search tool for over 80% of home buyers. Only 9% of home buyers say they found their home through print advertising.
See more in this Interest.co.nz article on the research on how buyers find their homes and what they think agents are spending their advertising dollars on.
(Updated with comment from the Real Estate Agents' Authority)