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What may come as a surprise, however, is that some agents are receiving a monthly cashback incentive to help promote a third company — one seeking to disrupt the market dominance of the other two — Melbourne-based listing platform Homely.
Some experts say it’s a relationship that should be transparent.
Australia is among the most expensive places to sell property, partly due to the dominance of realestate.com.au and Domain. Source: AAP / Paul Miller
A ‘jumbo’ challenger, with industry backing
A spokesperson for Gumtree told SBS News the company was “not aware of this [Homely’s cashback] program or involved in any way”.
But are the interests of the industry always compatible with those of property owners?
‘We want to give back to the industry’
In a February 2024 webinar, a Homely representative told existing and prospective investors: “We want to be the industry player here.”
We want to give back to the industry.
The incentives are a revenue-sharing component of the company’s ‘Homely Plus Uplift’ program.
“To participate in the Homely Plus Uplift Program, agents pay a membership fee to Homely for access to premium branding and profiling across our platforms. The average membership fee paid by each agent for this access is approximately $650 per month,” the spokesperson said.
This fee is paid by the agents and not the vendors.
The statement goes on to explain that, on average, the company pays “approximately $220 per month to each participating agent from the membership revenues for their marketing services” — roughly equal to 35 per cent of their monthly membership fees.
In an investor seminar, Homely sought to recruit more agencies to its Uplift program by citing a recent cash payment it made to one agency, totalling $3,605. Source: Supplied
However, according to a slide taken from a February 2024 investor seminar obtained by SBS News, one agency reportedly received a cashback payment of $3,605 in one month — significantly higher than the quoted $220 that would be paid back based on average membership fees alone.
Some experts say the arrangement appears to be skirting close to laws prohibiting kickbacks and should, at the very least, be disclosed to vendors.
‘It should be declared’
“If that 35 per cent is paid back … the payment that they make to Homely — it should be declared.”
Real estate agent John Keating has been a vocal critic of unethical practices in his industry for decades. Source: Supplied
“If I recommend [a customer] a higher package, which costs the client more money because I get a bigger rebate, that’s a secret commission. No doubt about it, it’s crystal clear in my mind,” Keating said.
“It’s incredibly important when we are talking about something like the sale of a home, that all the information is transparent and people can make choices about where they spend their money, what they’re buying, given the high-stakes nature of the transaction,” Tonkin tells SBS News.
Tonkin (pictured) says real estate agents “have a position of power in the [sale or lease] transaction and therefore must be really transparent about their associations and profits”. Source: Supplied
“To hear that there’s a potential that in the sale [of a property] that some of the expenses could be obscured or it’s not abundantly clear where all the money is going, including maybe being redirected back into the pockets of a real estate agent, I think that it sounds like it could be a case of misleading or deceptive conduct,” Tonkin says.
[It] certainly would be unfair conduct and would warrant investigation by a professional body or regulator.
Rebates, commissions and the law
The company did not answer questions about whether the Uplift contract contains provisions requiring agents not to pass on costs to their clients.
By claiming the scheme relies on agency-paid fees for “marketing tasks” instead of vendor-paid fees for advertising, Homely is, in effect, saying the cashback payments do not need to be disclosed or passed on to vendors.
From both the volume of certain payments and the company messaging, it appears the cashback payments could be made based on an agency’s membership fees and VPA in exchange for marketing work. This makes it, at best, a grey area if such incentive payments aren’t disclosed to vendors.
Contrary to this, Homely has told SBS News the payments it makes to agents under the Uplift scheme “are not ‘savings’ to be passed on to vendors”.
Most Australians rely on real estate agents to buy, sell and lease property, but surveys show that most view the occupation as unethical. Source: Moment RF / Oscar Wong/Getty Images
‘The local paper test’
Keating says regardless of whether the Uplift model poses a legal compliance risk for agents, any real estate sector business should ask themselves whether their actions pass “the local paper test”.
Would we be embarrassed if anything we do appears on the front page of our local paper? If so, don’t do it.
He says the at times duplicitous conduct of real estate agents underpins the findings of the Governance Institute of Australia’s 2024 Ethics Index, which shows real estate agents are the least trusted occupation in Australia.
The Governance Institute of Australia’s Ethics Index 2024 found Australians consider real estate agents to be the least ethical occupation. Source: SBS News / Governance Institute of Australia
“We’ve got a long way to go as a profession to increase the level of trustworthiness and respect and integrity amongst the public,” he says.
“The claim that agents are doing a disservice to vendors is fundamentally flawed as by lowering advertising costs across the industry, Homely directly benefits vendors, making property marketing more accessible and affordable.”
