People trying to sell their homes may have to fork out an extra $230 to have the property listed on Trade Me – on top of real estate agent fees and commission they already pay.
The online auction site stands to make a huge profit from the increased fees – which the company encourages agents to pass on to homeowners.
Real estate offices had listed their properties on the site at a discounted fee. But from tomorrow, as contracts come up for renewal, each listing will be charged at $159.
Most agencies had absorbed the old costs but say they will now pass it on to vendors.
In a letter to agencies, Trade Me recommended vendors be charged $199+GST ($228.85), allowing a 20 per cent commission for agents.
This is on top of real estate fees, which in the Auckland region can range from 2.95 per cent to 4 per cent for the first $300,000 of the sale price, and then 2 per cent to 2.5 per cent for anything on top of that, according to Real Estate Consulting New Zealand. An administration fee can be up to $500.
The site has also raised the fees it charges to list rental properties, commercial leases and businesses.
Real estate agencies were fuming when contacted by the Herald yesterday. First National general manager Colleen Milne said: “We’re really unhappy with that because a lot of our owners have absorbed that cost till now.
“Trade Me really are promoting that they should be getting an equal cut of the pie, so I’ve asked them to justify it. And they haven’t been able to …”
She said the company would not charge vendors rates proposed by Trade Me but would pass on the actual costs.
“First National is one of the first groups to support Trade Me and I made my opinion very strong that I felt they had a monopolistic kind of attitude.”
Professionals chief executive Mike Henderson said: “For us to shift from a capped environment to a listing fee environment straight away without actually really thinking it through and forming the right strategies and deciding how we want to manage this increasing cost, just seemed a wee bit rapid. Trade Me will close to treble their revenue streams.” “
Trade Me spokesman Paul Ford said the new fees “better reflect the value delivered”. He said the company was recommending agents pass on the costs to home-owners as it was the right thing to do.
Real Estate Institute chief executive Helen O’Sullivan said listing on Trade Me would become an “added extra” for vendors, rather than automatic when signing up with an agent.
But she said print advertisements were still a popular way to advertise as well as realestate.co.nz.
Trade Me chairman David Kirk told yesterday’s annual shareholders’ meeting in Wellington that revenue from classified ads for cars, houses and jobs was up 30 per cent and was now “delivering the bulk of earnings growth today”.
By Alanah Eriksen @AlanahEriksen Email Alanah