Dashdot Collapse, REA's Data Deals and the Fight for Industry Control

Corrected Transcript Peter Schravemade (00:07) G'day folks and welcome to another episode, episode six actually, of Before the Weekend. It's really great to have you with us, either listening or watching on YouTube. I'm joined here by the irrepressible Kasey McDonald. Kasey, how has your week been? Kasey McDonald (00:20) Yeah, it's been quite busy actually, thanks, Pete. And what about yours? Peter Schravemade (00:23) Well, it has been busy. It's getting busier. yeah, I'm on personal leave this weekend, just jumping back in to do this podcast and then rejoining my family for the for the wedding of my daughter to her fiancé, so I'm pretty excited about that. it's the first wedding of any of my children and probably the first in that generation. So yeah, big, big family gathering. Too many Schravemades for your liking, let's put it that way. Peter Schravemade (00:53) Ha. Kasey McDonald (00:54) Ha and how's your lovely wife coping with all the Schravemades? Peter Schravemade (00:58) She seems to be doing okay. I mean, I think by now, you know, 24 or 25 years in, I think she's probably fairly used to it now and if yeah, no, that it's been great. So yeah, I think I think all is going well. but Kasey McDonald (01:04) Ha ha I hope you've got A great speech, better than some of those that you do for me. you know, so I really hope that you've saved your daughter any type of embarrassment on her big day. Peter Schravemade (01:18) I think the last two times I've introduced you, they have been nothing but professional. It was that one before and that's the one that you're holding on to. So and we could go into that today, but we won't on the podcast. Moving right along, let's get into this week, because we've got a bit to unpack and talk about. So joining us as last week we spoke about an article which involved a Harcourts deal. Kasey McDonald (01:33) No, we won't. We do. Peter Schravemade (01:54) the REA Group and we were kind of speculating on a few things there, what the deal was about and whatever else. And we're also speculating about what this meant for the Real Estate Industry Partners, or REIP. And and I even said on the episode it'd be great to have Sadhana on to talk about that. Well not only do we have Sadhana joining us later in the program. We've got the CEO of Harcourts Australia, Adrian Knowles. He's gonna be joining us to talk about that deal, and Sadhana will obviously look at it from a REIP perspective. So that's coming up just a bit of a teaser. That'll be later in the in the episode. But I thought what I might look at first is a breaking news story. it actually came from I think it's been a couple of weeks now. Peter Schravemade (02:43) That I've been aware that there's been the collapse of the collapse of this buyer’s agency called Dashdot. there have been a few news articles about it and there's been even some more today. What do you know about that? Kasey McDonald (02:47) Well I think what I've sort of read in short is that I think it collapsed back in May, but it's obviously only started to kind of make the headlines now. and it's probably about estimated liabilities of around 16.6 million as what's been shared. but yeah, I think the liquidators are obviously going through their affairs at the moment and understanding what needs to be released to creditors. Peter Schravemade (03:02) Oof. Yeah, it doesn't help that the owner of Dashdot is a guy called Goose. I don't think that adds to the credibility of the of the organization. obviously not throwing any stones. companies go into liquidation every day. But I think the more interesting part about this it the stories emerging about how customers were chased up for payment So, I should probably rewind on Dashdot. If you're not aware and you're a listener and you've never heard of Dashdot before, they're effectively a buyer's agent. buyer’s agents are increasingly becoming more and more prevalent in our market today and I I think that has a lot to do with the supply and demand issues. We've got a lot of people unable to find housing And when the competition heats up for housing, I think we see a lot more buyer’s agents, which are, you know, in if you speak to the real estate buyers advocates of Australia or PIPA, the Property Investment Professionals Australia, they're a legitimate professionals who execute that that role on a regular basis and they do a fantastic job of it actually guiding people through the process of purchasing a property. Now Dashdot appears to have been one of those one of those entities. They provided I suppose they'd call it end-to-end property investment services. They'd look at a portfolio strategy. they offered borderless investing and acquisition. I think the biggest claim that I didn't like is they claimed to source under market value homes to strike strong capital growth prospects. Now a lot of property investment companies do that, but You know, that's a that's a big claim unless you've got some kind of independent truth to back that up. That's difficult. But in the emergence of the administration, there's a couple of things I just haven't liked about this. I don't know how you're feeling about it, but there's a there's a few things that I am seeing that just shouldn't really form part of our industry. And I think the the number one thing that I I can put my finger on is that these guys were collecting fees for properties that they effectively hadn't purchased. and there doesn't appear to be any regulations from a buyer's advocate or buyer's agent's perspective that means that those fees are held in trust. that appears to be the biggest one. So you and I both know that if I'm selling a property and I go to sell it You know, the buyer's deposit is held in trust, the agent's commission is held in trust. All of these things are held in trust until there is a resolution which will be settlement. but I you know, I don't know whether that's not legislated. I d I don't know enough about that area, but this appears to have been prepaid buyer's agencies fee. So the consumer was paying them up front and now these are services that quite obviously will never be delivered. What are your thoughts on that? Kasey McDonald (06:38) Look, I totally agree. And I think to add to that is that there's some comments also around the behaviour of that they knew that the ship was going down, but they also kept taking on more I guess more customers, right? A as a part of the process. So not only were they there still taking their existing customers money, but they were actually taking and holding other money of brand new people where they were still promoting the services and then within days after that, sending out emails saying that they were in administration. Peter Schravemade (07:12) Yeah. And I mean that's obviously not good optics. We don't know whether, you know, how knowledgeable the people chasing the money were aware of the issues that were there. It could have just been, you know, a management thing where they knew that there was trouble, but they were telling people it was business as usual. It's really it's really hard in these instances to sort out the wood from the trees, but you know, Peter Schravemade (07:37) I think all of their shares, it's now been highlighted by ASIC that all of their shares were sold to a British Virgin Islands company for a $100. Not good optics, you know, not throwing stones, not sort of casting aspersions. this is a difficult one to watch. And I think I think the biggest loser here, again don't know how many times we've said this on Before the Weekend, but the biggest loser here is the trust and confidence in the industry all over. Kasey McDonald (08:07) Definitely. Peter Schravemade (08:07) You know, there's a bunch of buyers out there that have lost millions and millions of dollars w who were expecting a house, 16.5 million I'm having reported to me. but you know, how do how do those people move forward with another buyer's agents in the future? You can say you can put all of these safeguards in place, but it's it's very hard to repair that kind of reputational damage. Kasey McDonald (08:33) Yeah, definitely. I think I think it came, you know, from some of the things that I'm reading about it as well is that, you know, it was a shock to some of their, you know, customers that they'd been supporting for a little while as well. But also some had reach restructured financially how and which they were utilizing their those funds. And what I mean by that is taking it out of their super and being able to then buy investments. So now they've lost that money and they've lost it out of their super. So Kasey McDonald (09:02) So, you know, there's setbacks here in all different ways. it's not, you know, just money that's lost, but it's also, you know, your future that many of the as to why these decisions are getting made, right? Like, and we should be thinking about that. But just to just to on the other point before, one of the other notes actually indicated that they'd received information that it was under administration and the CEO was in fact still emailing customers, suggesting a different pathway forward for them to partner with another buyer’s agency. Kasey McDonald (09:32) So again, kind of the optics on that of you know, but you're connecting with your customers saying maybe go down this way when your customers have already lost trust in you, why would they decide to choose a partner of your choice to decide to have a again as their buyer agent? Peter Schravemade (09:33) Yeah, you're right. And we'll pr we'll probably hear how this plays out over the next little while. Like the obviously the offshore ownership transfers, the share transfer is different. the industry risk. I c I see REBAA, the real estate buyers advocate this Australia has already tried to separate the collapse of one company from the broadest buyers agency sector and I'll back that up. There are some really good buyer’s agents doing fantastic things out there and you know it's easy for me to sit here and say don't lose heart, but don't lose heart. I think if I was to offer any person advice, having been an investment property salesperson myself in the past, if I was to offer any advice to a person considering that, it would be around the payment of fees up front. too much can go wrong. There's there's too much that you don't have control over in the process. you know, I would accept those funds being paid up front if they were paid into trust and you had a A right of refusal over the top of it. There was a you know some kind of way to mediate if there was a disagreement between parties. But if you're paying upfront for buyers agency fees, what protection do you have? What consumer protection do you have if the party decides to walk away? And that really appears to have been what's happened here. But you know, on top of that, Kasey, there are some other things I didn't like about these guys. The influencer style property advice, they're very heavily social media content led. There were re there were red flags. Red flags aren't enough to sort of come out swinging and go, you know, these are guys are dodgy, don't d don't go down the line with them. But, you know, I think you're with me. The disappointing part about all of this is there's a bunch of mum and dads somewhere out there that have lost $16.5 million that they'll probably never see again. ASIC can clean it up as as best they like. you know, there might be criminal charges and the rest of it, civil charges. We don't know, it just depends on the wrongdoing, but at the end of the day I think everyone's lost already. Kasey McDonald (11:54) Totally agree, definitely with you on that one. Peter Schravemade (11:57) Mm. Let's move on. Let's go to the second story that I've kind of picked out tonight. Obviously we've spoken tonight. This week. I've sp obviously we've spoken a bit about the budget. I think the one article that I that really took my eye this week was a the an article reporting that the Queensland rental crisis and negative gearing changes w are probably more significant Peter Schravemade (12:26) issue than we previously thought. the article says that Queensland has reportedly lost almost 13,000 rental bedrooms over the course of three years. And experts are warning that the proposed tax change tax changes are probably going to worsen that investor problem. So it was an analysis by a company called Found It and it reports 12,929 bedrooms are lost across 2024, 2025 and 2026. So i in May of this year, 993 landlords exited, while only 661 investors entered. So the issue is not just the landlords exiting, as I understand it in the article, but the lack of investors that are coming in to replace the stock of landlords that are exiting. And so now with proposed negative gearing and CGT changes, what's anticipated? Is it's going to discourage new investor purchases. this is this is a big story on the back of a succession of ones we've had. Tim Lawless referred to the lack of elasticity in the in the tenancy process now, where e he firmly believes that there's not a lot more room for tenants to move upwards in paying out further wages from their weekly income. Than what is there at the moment. And if we're seeing a decrease in the amount of stock, that would naturally mean there's going to be more competition for the stock that's on the market and then we have this knock on effect where things move forward. What are your thoughts? Kasey McDonald (14:05) Yeah, look, I think that we've probably all underestimated how serious the supply issue is. And In fact, it was Antonia, the CEO of the REIQ in our first episode, who actually put all of this down to exactly this issue that it's a supply issue, right? and she has continued to talk about this. But I think here, you know, we're talking about real families that are now having to compete harder than they ever have before for fewer homes. So, you know, you've just said there was 900-odd that have left and only six hundred Kasey McDonald (14:36) Coming back in. So we've now lost 300 odd. And so that's now 300 odd families, couples, whatever that looks like, that now potentially don't have a home. So what does that actually mean and what are we doing as a as a government to help support the supply issue? Right, that at the moment all we seem to be doing is trying to figure out how can we get more money out of everyone's back pockets instead of actually really addressing the issue here. Peter Schravemade (14:48) Yeah, it's a it's a real problem. Like I remember back in the day when I would go looking at rental properties, I'm sure you remember this too. We would look at a house, a whole house, and go, you know what? I'm I'm gonna look to rent this. Whether I was with by myself or with my brother or with somebody else that would be renting it, we'd be looking for a whole house. These days, many renters in Queensland are going looking for a room. Like let that sink let that sink in for a bit. They're not You know, they're not asking questions about whether there's a shared kitchen or a shared bathroom. They're lucky if that exists. But that they're actually looking for room. It's now per room per week that that most of the transactions are being done. And it's like how d how do you live on that? I've got a story, it's it's not limited to Queensland. Like if you're in New South Wales, Victoria, Adelaide, Perth, I know these things are going down there as well. here in Melbourne where I am today, my daughter and her husband-to-be, who are moving in together because they are getting married. they have a former flatmate who has one week to find accommodation. And like, to me, that seems like a an almost impossible task in this day and age. One week to find accommodation just sounds like a whole heap of anxiety and stress that nobody wants. so like yeah and just to just to talk to one of the things she said Peter Schravemade (16:30) I do think we all know about this. I think you I people like Antonia and people like Jacob Caine, our REI heads, different bodies, even like the building authorities, the QBCC to an extent, the master builders, I think the property investor b investor advocacy bodies, all of them have actually been saying for The longest period of time that we have a chronic supply and demand issue. And whilst it's multifaceted, the one thing that seems to be universally agreed on by everyone except for our federal government and to extent state governments around the place, like here in Victoria, is that we need to build houses and we need to build them fast. And like to me, it's more important than the Snowy Hydro Peter Schravemade (17:25) Public works program that we had running back, you know, decades ago. We need to be pumping out affordable housing that goes to people who need basic shelter. We need housing going to our our public sector because you know we haven't built any here in Queensland for 10 to 15 years. The Liberal government who only just got in have only just gotten that ball rolling. Peter Schravemade (17:49) And in the other states it's it's just the same. But every single place you go, every single expert you talk to, it seems universally a fairly simple solution. Let's start building houses again. but I don't know. Obviously it's more difficult than that. I'm an investor. I have a block of land who would like to build a house on it, and I can't do that because the amount of money that it would cost me to put a house on it i doesn't equal the amount of rent that I would get back. Kasey McDonald (18:17) Correct. Yeah. And I think I think with interest rates rising, and I know they've just stayed, you know, we've just had that kind of pass that they're not increasing and maybe won't be again until August. But we've got construction costs that are higher. You know, the cost now to just buy a block of land, you know, we've got changes in tenancy reforms that are happening around the country that make it even harder. So it's just really shaken the confidence, I think, out of investors saying, you know, is this the country that we should actually invest in? Peter Schravemade (18:28) Hmm. Kasey McDonald (18:47) From a property perspective. And I think, you know, I've been in a property investor for a very long time. And I don't mind risk, right? But like all of us, you want certainty. And I just don't think that we've got that at the moment. And, you know, I saw the ad last night from the Brisbane mayor or whatever they were talking about on the news about the budget that they're bringing out in Queensland. Now they have put funds to supply government housing and to be building out. Which was fantastic. But then on the back of that, they've taken stuff away and they've decided to add a program in at South Bank for people to come and do yoga in the morning. And that's where they feel. So instead of adding that extra million dollars on for further housing supplies in areas that we really do need it, they've decided to put some yoga on in the morning instead. So there's gonna probably be some uproar in Queensland from Brisbane City Councils that you know, the people in those regions saying, is that something we really need when we've got homeless people sleeping in between the buildings in Brisbane City because there is no place for them to go. Peter Schravemade (19:54) Yeah. I went to Musgrove Park, which is the one behind the Brisbane Convention Exhibition Centre, and I was I was stunned, not just by the amount of homeless people there, but by who they were. Th these were single females in you know, eighteen to twenty two who were working. They were living in a tent, like I watched one lady leave for her barista or her wait staff job. Leave her all of her earthly possessions in the tent. She's gone off and done that. She came back later. You know, they're charging their phone iPhones or smartphones on on power poles. These are not what we think of as homeless people. These are these are me and you. This is this was us. You know, I won't give away your age, but this was me twenty years ago. Kasey McDonald (20:31) Right. Mm-hmm. Yeah. Yeah, right, okay. We're going there, are we, today? But Peter Schravemade (20:43) L let's yeah well, I didn't. I d I deliberately didn't go there. I didn't I didn't go there. Kasey McDonald (20:50) But before we get on to the next one though, I just want to add in right about just also generally how this is a affecting, I think, you know, our frontline property managers, and of course, you know, our real estate business owners. And I think, you know, the conversations that we're having all across the industry, there's a lot more pressure involved in those conversations. They're a lot more emotionally heightened and there are just some of these things though that we all can't fix and they're things. Kasey McDonald (21:20) That are out of our control. But I think that we generally do need to be talking about them and we absolutely need to get behind the advocates like the REI REIs and actually make sure that we're supportive of what they're trying to actually advocate for us in market as well. Peter Schravemade (21:40) Yeah, yeah, absolutely. And we could talk about this until the cows come home because there's there's so much more. You know, I've heard of tenants putting off maintenance because they don't want to be kicked out of a property. You know, they're not they're actually not reporting it. There's so much to this so much to this angle that we could go on. but for the sake of this week, let's move on. who doesn't love a good real estate agent spat? look. Kasey McDonald (21:50) Mm-hmm. Correct. Of course It had to be on the Gold Coast. Peter Schravemade (22:09) It of course it had to be on the Gold Coast. But this one's a little bit different because like an o unlike our other spats, which is generally ‘she stole my sign, he stole my sign’ I put an air tag on it. We've reported on that a couple of weeks ago. This one's between a selling agent and a buyer's agent. Look, I'm not gonna mention the names. We don't do that. We really try hard not to Kasey McDonald (22:19) That was good. Peter Schravemade (22:32) To dump these people in it or give them any kind of glory about the spat that they're having which in turn tarnishes the industry. But there's a couple of things here. So there's a fairly vocal buyer’s agent who's come out and said I think he actually indicated two houses that were on the market and said who would who in their right mind would buy these. Now is the wrong time to buy. It made a bunch of assertions about the buyer that's there and of course The selling agent went and sold them and got pretty much a record prices on those. of course he was going to have his right of refusal. So the properties that were located aura in Burleigh Waters, you know, it sold for $6.1 million after passing in at $5.7 million. And another property, I love the way they've all got names. I need a name for my house. Bajo El Sol sold for $4.8 million after a long campaign. Kasey McDonald (23:21) Ha ha Peter Schravemade (23:28) But the buyer’s agents, so he had warned buyers not to get swept up in emotional price guides. The selling agent’s come out and argued the results prove the strength of the southern Gold Coast market. Look, I think Tim said that, you know, Tim Lawless from Cotality, he basically pointed to the Southeast Queensland and said, supply and demand is going to continue to drive prices up. And so regardless of what your friendly buyer’s agent’s saying, I do believe that the data and the numbers that Tim speaks to Peter Schravemade (23:58) Are a little bit more powerful than the gut instinct of a of a buyer's agent. So, you know, that to me is whilst it's not totally unexpected, I think the you know, the the spat that then ensued at the end of that where the seller's agent has called the buyer's agent out and said, you know, you should have sold this. you shouldn't have said these things about the property. You don't know what you're talking about, that kind of thing. Well it doesn't it doesn't it doesn't do anything for us. You know The buyer's agent actually had some points. I had a look in that. He was he probably went a little bit too far. the seller's agent's obviously taken it personally. He's gonna say he didn't, but by his reaction he probably did. you know, the and the and now the buyer's agent's doubling down saying, My points are still correct. Okay, they sold at a record prices, my points are still correct that he wouldn't get swept up in the emotion of buying Property on the Gold Coast at the moment. So we you know, I don't know. What do you think? Do we give this breath or Kasey McDonald (25:00) Look, I think at the end of the day, what a buyer's willing to pay for a property is what they're willing to pay for, right? Like so, so I mean, I could sit there and say, well, I think that this house is worth this money, just like my house. I'm like, how dare that they only say that it's worth this from an algorithm. Actually I saw a an Instagram video today with a lady exactly saying that. You know, don't trust the desktop appraisals and the algorithms. you know, let me come out and tell you what you think your home's worth. Peter Schravemade (25:08) That's right. Kasey McDonald (25:30) At the end of the day, we're all going have an opinion. But the right opinion on the day is that buyer who wants to buy that home and that's what they're willing to pay for it, really. Peter Schravemade (25:33) Yeah, it's interesting too, you know, like property investors or buyer’s agents giving property investors ad advice in the six and seven millions because generally I've found somebody who has six and seven million won't care about an extra one on the end of it to secure the property that they want in the area that they want. So I f I just thought the buyer’s agent probably who was look, I know that it's you know, a lot of it's a social media play. Peter Schravemade (26:11) I'm gonna go to social media I'm Gonna give really strong dominant advice. People are gonna come and ask me then for advice, I'm gonna sell my services on the back end. I'm not an idiot. I know how this works. I just think he chose the wrong properties in doing that. But hey you know, or fair play to him. Everyone's entitled to a an opinion and so I wish him the best in his f further judgment down the track. Kasey McDonald (26:26) Look at the end of the day, I'll ask you a question, Pete. If you are going to buy a six million dollar house, like what's gonna really drive that purchase decision? Are you looking for I'm if I'm gonna spend six million dollars, are you buying it for the location, the views, because it's house has got a name? Or like why? What so Peter Schravemade (26:43) Well, these were both homes. They you know, they're not the kind of thing that somebody's gonna advise in investment property. So to me it seemed really simple that it was going to be a homeowner coming in who wanted the convenience of living there. They might have wanted the status of Bajo El Sol or whatever the property was called. they might have wanted that. you know, that might have been important to them. They were beautiful houses. I had to look through them like online. Yeah. I just went down with my six mil and had a look through those. Kasey McDonald (27:20) Ha Exactly. Yeah. Yeah. Peter Schravemade (27:33) But I Had a look online, they're they're stunning properties. Somebody's obviously fallen in love and gone. But y you know, here's even the interesting thing is that they didn't sell at auction. But the g the a the selling agent obviously pushed to then go and get the deals across the line. So, you know, I th I think the selling agent probably has the right to come back and go tongue in cheek. You got that wrong, buddy, you got that wrong. how bit how about those apples? You know, hold my beer a second. Kasey McDonald (27:54) Mm-hmm. Yeah. Mm-hmm. Selling agent had those negotiation skills we've been talking about the last few weeks. Yeah. Peter Schravemade (28:06) Yeah. Yeah. maybe Maybe the thing to learn is let's not trash talk each other in the industry. Let's go with that. we got two that are super quick to talk about. we have while one is a trust account case, I know we've covered a few of these, so with this one, this is a principal who has pled guilty to or pleaded guilty to fraudulently converting trust account money. Kasey McDonald (28:13) Absolutely. Mm-hmm. Yeah. Peter Schravemade (28:35) And causing a trust account deficiency. So the reported amount is $164,340. We have seen jail sentences handed out in this instance in the past. We definitely have, right? We've seen quite a few of them. apparently it was converted for personal use. We've heard about this before as well. We've heard about a holiday, shopping sprees, buying things for the kids, that kind of thing. she's been convicted, her licence has been cancelled. She's going to serve an 18-month community corrections order, 300 hours community work. there's a mental health programme involved in there and I wonder I wonder if that's sa staved off jail time. and there's also an order to pay compensation. So, you know, it ties out a pretty bad two, three weeks in the area of trust accounting for Queensland and Victoria, if I'm honest. Kasey McDonald (29:19) Possibly. Yeah, well I just actually saw the information about the Queensland case that we were we were chatting on a few episodes ago. So it has now been four years jail, that the this person has been sentenced to. They siphoned more than a $116,000 into almo into over two hundred which w equated to over two hundred transfers into multiple bank accounts. so they also pleaded Kasey McDonald (30:02) Guilty and they were sentenced to four-and-a-half years jail term of three cr three counts of fraud. Peter Schravemade (30:06) Yeah, there's something about this most current one that we're not aware of. I think it has to do with the mental health order that's in there. I suspect that has stayed off jail time because I've certainly seen jail time given for misappropriation. We'll move on from that. Obviously I think I think the one thing I would raise, you know, and maybe a discussion point for the future is at what point do we suggest that the trust account shouldn't be operated by the real estate agency? Kasey McDonald (30:23) Absolutely. Yeah, that's a really good point. And I think it also is why there are many that are considering moving to different platforms that are available that y maybe don't have that kind of yeah, right, where that is just completely done, it's via a wallet app system and it's you know, I Peter Schravemade (30:48) With that dangerous. Kasey McDonald (30:58) There's no actual trust account where you've got someone physically going in and transferring funds in and out, so to speak. So yeah, look, I think it's something that the industry needs to have a very good think about. Kasey McDonald (31:12) But more importantly, the agencies themselves around their processes in this instance. Who have they got that are doing those tasks and you know principals out there, it's your licenses on the line as well. So what are you doing to make sure that you're checking over these matters? And I know that in these situations, I think both of these cases they actually were the principal. yeah. Peter Schravemade (31:32) Yeah. That were the principal. Yeah. Kasey McDonald (31:34) Yeah, so I appreciate it's also difficult, but yeah, there needs to be maybe some different checking mechanisms that it we bring into the industry, or maybe it is that the trust accounts are not held by them anymore. Peter Schravemade (31:46) Yeah, but you know how you go to a casino and you see I don't I don't know, y you probably don't see them 'cause you don't go to the urinal, but I see them. Above the urinal there's signs that say that say, ha are you having gambling problems here as a help. You know, if you're a principal and you're listening to this today and you're operating a trust account and you know that is a danger for you to sort of dip your money in and grab some of that out, especially if you need it, maybe you need to take that that temptation away. Maybe that's Something that you do as a form of self help, you go in and look at other options, holding it in solicitors' accounts or whatever it may be that is still inside the regulations. But you know, I'd urge you if you're listening to this today and that's a temptation for you, just take it away. So it's not there. I'd rather I'd rather see you, you know, happy and living a life outside of jail than in because you thought this might be a solution to yeah, whatever worries there are out there. Now Kasey McDonald (32:44) Yeah, and again, It just brings it back to the real estate credibility piece that we it kind of seems to be a theme in every episode, right? And this forms that, you know, these articles are going live to the public consumer who deal with us every single day. And so again, they're they're it's allowing them to lose trust in who we are and what we're actually able to do to support them, which is really buying and selling. But they look at all of these other things and then lose trust and credibility. Peter Schravemade (32:51) Yeah. Yeah. Yeah. we got two more really quick ones before we get on to our lead interview for the day. Sunshine Coast unfair dismissal. this seems c cut and dried. We the reason I bought it today to discuss it is we've had a few unfair dismissal cases that real estate agents have been quite dominant and saying, like, this is ridiculous, this person turned up drunk, it was their fourth warning, why am I going through unfair dismissal? this one seems crazy. this is a former Employee of a Sunshine Coast business. I know this business well. they're good operators. that doesn't mean anything, but there was a unfair dismissal claim lodged against them after the staff member reportedly was employed for only one week. Now, rightly so, fair workers dismissed the application because the minimum employment period had not been met. Now I think that's one year. I think it's one year before you can claim unfair dismissal. but the problem with this, and I would argue here's the real issue, is the original article saying unfair dismissal, unfair dismissal against this agency, that y that attracted more media coverage than the one that said, do you know what? It wasn't a claim to start with. So this person has gone out and done some damage, no risk to that person. you know, I often wonder whether there's there's any kind of legal recompense for stuffing around with the system as much as this. Kasey McDonald (34:50) Yeah, possibly. And you know what? I don't know that this is even maybe a one off. Like I think, like you said, it's that's been that disgruntled employee that has created all of the noise out there. And in saying that though, there's probably other cases that may be valid that are not being heard because this person's done the wrong thing as well as to why, you know, that it's been thrown out by Fair Work in that short period of time. But I think, you know, I think I think Kasey McDonald (35:20) The key takeaway regardless is that small, medium, large, whatever size you are, you need to have the proper processes in place from a HR perspective and they can be blind spots. And we're not all that, you know, as a as a principal of a real estate agent, you don't know what's sometimes required, but make sure that you actually do have frameworks in place to because they can make a really big difference in these situations. Peter Schravemade (35:44) Yep. Last bit of news before we get on to our main story, Ben Ikin, former Origin player. I think he's a son in law of Wayne Bennett, or was the son in law of Wayne Bennett. but he's a former NRL and Queensland Rugby League player. He is a CEO, he's now moving into Prop Tech. it he's been appointed CEO of SearchX. SearchX is a company that one of the things that they're doing is AML. At the moment. but you know, like I don't really know how to react to this. I it's great news on the back of origin. But in my experience, particularly in proptech and legal tech and SearchX is squarely in those two. it seems like an odd an odd introduction. so I don't I don't know where we go with that. Peter Schravemade (36:44) I would say that there have been quite a few high profile cases of rugby league players not acquitting themselves in their jobs as the CEO or departing silently from groups in the last two months. there's quite a few of them that I that I'm aware of. So look I d I don't know that this is a good move. it looks to be a move where we're going to rely on Ben Ikin's high profile to get That particular proptech higher in the rankings. What are your thoughts? Kasey McDonald (37:18) Well, I think he was I think CEO of Queensland and so I think what he was doing there was lots of different commercial growth aspects as a part of his CEO role. So, you know, I'm suggesting that's the reason that the founders have decided to take this path, that that's maybe something that we all don't know that Ben Ikin can offer. but I think in these plays it sometimes is just about Kasey McDonald (37:48) Is that celebrity coming in? and are they going to actually boost our brand just simply because of their name? I don't know. Maybe he does have that skill set that we don't know. Peter Schravemade (37:58) Hmm. Well, either way, Ben, if you're listening, welcome to the industry, welcome to the small proptech community. hopefully, you know, maybe we can get him on board and find out exactly what he's doing ourselves. I think I'll be seeing him, I think SearchX's are a sponsor at the REIQ LIFT conference that's coming up. So I would probably expect the CEO to be there given he's the new one and he's trying to do deals around the area. So happy days. you know, welcome aboard. Welcome, welcome to the fun ride, Ben. Kasey McDonald (38:03) Fantastic. Yeah, I think it'd be great To get him on, you know, like let's learn about what what was an attraction for him to come into a business like that from leaving an industry that he's known and played in, and what's been the attraction. Peter Schravemade (38:29) Perhaps we'll let him find his feet first, Kasey. Kasey McDonald (38:45) The his feet at the at the bottom of his legs. Peter Schravemade (38:46) But who knows? Yeah. Well as a rugby player we would think he knows exactly where those are. let's let's let's go into our main interview with Adrian and Sarder. Kasey McDonald (38:54) Exactly. Peter Schravemade (39:02) Adrian Sadhana, welcome to our humble podcast Before the Weekend. It's wonderful to have you both online. Sadhana Smiles (39:08) Thanks for having us. Thanks for the invite. Peter Schravemade (39:09) No problem. We were we were having a discussion last week about a news article that we had seen in the Elite Agent magazine which referred to a deal between the REA Group and Harcourts. and it came on the back of another two. We'd seen one with obviously with Raine & Horne, one with Ray White. actually in I believe Agents had one earlier. So Adrian, I appreciate you spending some time this morning to tell us what it's about. Can I ask you, what we've read in the press release, is that you'll be given access to REA Pro at best in market national rates. Existing pro subscribers will receive a discount and the REA will support Harcourts through events in twenty seven. Was there anything else part of the deal that wasn't part of the press release or hasn't been spelt out publicly? Y yeah. Adrian Knowles (39:59) Yeah, Yeah, the it is a it is a deal in which we can use their data for those that are on the pro subscription to enrich our own cloud for the reuse of our own network. So whatever's accessible to them in the pro subscription is able to be ingested by us to deliver back to our network in our native environment. Peter Schravemade (40:26) Okay, so this that's essentially a propensity marketing or propensity lead generation play where you're going to be getting data that you think you might be able to target leads that you can't ordinarily see. Is that what it is? Adrian Knowles (40:38) Yeah, so that data will enrich our already first party and third party data that's held within our system. Peter Schravemade (40:45) Okay. So we've seen as I mentioned earlier, we've seen three major franchises announced and a small a smaller bunch of independents announced on this same deal. Is the deal the same according to you or is this an exclusive deal or is this something that like is this exclusive to Harcourts? Am I expecting to see it widespread? Will Remax come out and announce it next? Adrian Knowles (41:06) I can't speak for the other agreements 'cause I'm sure they've got the same NDAs as I do. but I would suspect that REA's tendency for the last twenty years has been not to give special treatment to anyone. and I would suspect that it's exactly the same deal across the board. Peter Schravemade (41:14) Right. Mm-hmm. So in the past, and I spoke about this on the podcast last week, in the past, Mike Green had been particularly not critical, just fairly dominant in the way that he spoke about REA and his and their influence on the industry. I guess my eyebrows raised when I saw this Harcourts deal because In the past he's been fairly dominant about talking about a an independent industry that's free from the major portals. Can you can you speak to that? Has something changed in the Harcourts leadership team or direction? Adrian Knowles (41:58) I definitely can't speak to on behalf of Mike, but I can speak on behalf of Harcourts Australia. And what I will say is Adrian Knowles (42:08) Mike's Mike's comments around the major players a and REA in the past are very different to the way that we look towards our vision and our purpose for our network. The vision for our network is for the Harcourts experience to be considered the finest experience in real estate for our team, being our franchisees as well as my internal team. For our business partners, and therefore when in alignment for those first two for our clients. I am not willing to put the Harcourts Network in a position where it is behind their competitors in offering the best experience for our clients. In the end, our clients that are at the kitchen table are the most important part of our business. Peter Schravemade (42:59) So you feel that this particular deal is putting Harcourts in a in a position where o are they are they dominant or are they not disadvantaged by not being part of the deal? I'm trying to understand the thought process there. Adrian Knowles (43:15) But it's pretty clear that if other franchise groups are going into a into an exclusive or a deal with a data supplier, that if we do not do that, then we are disadvantaged. Very clear. Peter Schravemade (43:29) Okay. Okay, and you've mentioned data, so I assume that the largest play is your belief is the data play is the big one here, the preferred pricing I get. Everyone w wants better pricing, especially when it comes from the REA Group, right? But your play here is the data play, is that correct? Adrian Knowles (43:45) Absolutely. And that will be the play for all of the networks that enter into this agreement. Peter Schravemade (43:51) When you looked at this, I'm assuming that you looked at other data plays like RP data, PDS Live, PropTrack is obviously the REA Group. Did you look at any of the smaller, more emerging ones that are part of the play? Adrian Knowles (44:03) Yeah, once again, very different data sets for us. We have looked at all data providers, obviously in close, you know, relationship with REIP as well. We have looked at all data sets and there is certain key data that is exclusive to REA which we require. Peter Schravemade (44:22) Has that data being tested on the front line or is it a i it w were these tests in back end, may I ask? Adrian Knowles (44:28) All all data is already available to pro subscribers. So yes, I would say it's tested on the front line. But again, how do you test exclusive data to REA against others? Peter Schravemade (44:37) Okay. I'm more mean in a in a real estate sense, psych is the is the data being tested by active real estate agents or is it at a head office level where you're going, Look, here supply me with this data package, or is it actually experience from walking into a listing and going, Well, we didn't know about that sale or we didn't know about this particular deal or there, you know, here's some pricing that we hadn't seen in the past. Has it been tested on the front line or is it tested at corporate Adrian Knowles (45:06) We're a network of choice. So the simple fact is our network don't have to use their CMA data. Our network in a lot of cases actually have three different data suppliers. our network could be co Cotality, they could be PDS, they could be both, they could be REIP. so that wasn't the first point of call for this particular interest in REA and Adrian Knowles (45:33) Everyone has the same choices they always have. Keep in mind 47% of our network were already true subscribers. Peter Schravemade (45:39) Okay. Great. Yep. When when you look at doing a deal with a large software provider like REA or anyone, what kind of assessment or weighting is given to a technology and innovation? Adrian Knowles (45:52) Yep, it is pretty high. but not as high because we still have we again, we're a choices network. So we actually don't mandate the use of any technology. We go into preferred partnerships which give our network, in our opinion. We have a large tech team that do all of our assessments on those partnerships that we enter. We look at what is the best For our current ecosystem for them from our API from all different aspects, as well as what is the data that they have exclusive access to that we require. Peter Schravemade (46:32) Focusing on the tech and innovation though, you know, if I was to look back at the four last four years, with all the power that is the REA Group, $25 odd billion dollar company and the backing of News Corp behind them, if I was to look at the trend, we've gone through a period of generative AI, right, where we're seeing more and more software tools come out of the market. The R REA Group has been particularly lacking and lagging behind. Most of the tech providers in the industry in their provo in their provision of innovation research and development and technology, there just doesn't seem to be anything coming from that circuit. I know we saw sort of some kind of OpenAI GPT that they had developed earlier in the year, but over the past four years we haven't seen much in the way of tech and innovation. And I just wondered whether you'd seen something that had giv would give us a glimmer of light to think that REA was actually still developing tech and innovation on the front line. Adrian Knowles (47:29) No, that's that was not our intention or a or a weighted decision in this one. So we're not going to them for that. We have other suppliers and a current process that we're going through for four other pieces of technology that will handle that side of our internal Kaizen Kog, our internal tech stack. Peter Schravemade (47:39) Right. Okay, so I'm hearing from you largely that this was a data play, not necessarily around the tech or innovation that the REA Group are providing. and it was simply to give access to data in full propensity marketing. And best prices for portals. Adrian Knowles (48:07) I it was to give access to my network. Yep, it was to give access to my network to the largest portals data set pricing and access to the most eyeballs in the best fashion I could give them. Peter Schravemade (48:23) Mm, okay, understood. how does this how do you see Adrian Knowles (48:25) I'm welcome and open to other opportunities. Peter Schravemade (48:29) Yeah, great. Well it's great to hear. I'll I mean there'll be a lot of prop proptech providers out there, Adrian. That'll be pretty good to happy to hear that. So yeah, they're good stuff. if you like one of the one of the products that you're using is Realtair, do you see li last year, I'm not sure whether you're aware, I assume you are, the r the REA Group made a bid at Dynamic Methods, which is the forms provider for all of the the REI forms. When that bid I'm gonna say was unsuccessful, I could use the word failed, but let's just go unsuccessful. they appeared to hedge their bets behind Realtair and from what I can see are largely pushing that as a forms provider. Are you concerned that by Harcourts coming across, and I'm not asking you to speak on behalf of Ray White and Raine & Horne Raine & Horne, but moving to something like a Realtair format. May would that or could that do damage to the real estate institutes as they sit from their forms provider and the way that they bring in income? Adrian Knowles (49:32) We w we've been a partner of Realtair for the last two years. We entered into a partnership with them before they were purchased by REA in the current format. w we went with Realtair after an extensive search for a workflow process that would give the best way for us to integrate the Harcourts way of sales into the network. So we have been a part of that system well before. Sadhana Smiles (49:44) Yeah, yeah. Adrian Knowles (50:02) REA purchase them. The simple fact is, my understanding is those forms can be integrated. I may be wrong there, and I'm happy to be corrected. So the form supplier actually can be any form supplier within RealTech. Peter Schravemade (50:18) Yeah. But should Realtair decide that it can't be, does that then does that then create in a bit of chaos for the industry? Let's go with that. Be you know, we know that the real estate institutes they drive their money from there. and y you know, does that create an issue if at some point Realtair turned that tap off and say, No, it can only come from us? Adrian Knowles (50:43) I'm interested just to understand which industry you're talking about. are you talking about the proptech industry or the real estate agency practice? Because agency practice goes on regardless. Peter Schravemade (50:57) No it might Most real estate institutes derive their funding from forms at the moment. if Realtair suddenly decided one day that they would well a lot of it a lot of them are funded by that. This is why the drama with the ACCC last year and Dynamic Methods and the REA takeover was such a big thing because a lot of the REIs would cease to exist if that happened. and it seems to me that now REA Adrian Knowles (51:02) All of their funding. Peter Schravemade (51:24) Using Realtair as the forms provider to step in and disrupt that side of the industry. So, you know, if Realtare were to turn around tomorrow and say, okay, no more access for any of the REI forms to our forms provider, I would imagine that would create some chaos in the industry because the REIs who currently lobby and position on behalf of the government and you know, not to throw Mike Green's name in there before, but he's actually been quite dominant in saying that they need to get their act together and And be more unified and now we're in a scenario where they are. should the forms provider be turned off, which is where they derive large swathes of their income from, I would imagine that would do damage to them across the industry. Well what would be your take from a Harcourts perspective if that happened? Adrian Knowles (52:09) I think you're probably jumping at shadows on that one because of the percentage of the network. It's I can only speak to my network that are using the form side of Realtair. I think that is incredibly low. Peter Schravemade (52:21) Yeah, well I jumping at shadows I might be, but the REA Group did launch a fairly expensive and hefty bid at the Forms Provider last year. So I d you know, this is there's a precedent there. It's it's it's it's a it's a valid question, but I understand your answer on that. Finally, I've only got one more for you and then I'll I know I have to let you go. I know you're a busy guy, so thank you for giving us the opportunity to ask you questions today. How does this deal, this particular deal, help ha help Harcourts grow over the next three to five years? Adrian Knowles (52:51) I it's really simple. It w with the data that we can now ingest and give back to our network in the na in our native environment, that now provides our network not only agents, BDMs, property managers, everyone tools within our own native environment to list more, to sell more, to rent more. It's as simple as that. So for us to grow, we need to make sure that we have The best tools in the market to enable our agents to do more dollar-producing activity than the other agents in the industry. So it's very simple. We need to give them the tools to be able to do that and by restricting them from certain aspects actually inhibits our growth aspirations. Peter Schravemade (53:36) Mm. Is there is there anything else that you have to add to the listeners out there from a Harcourts perspective today, Adrian? Adrian Knowles (53:42) No, I think that was it was important to me and speaking to Sadhana that you actually were able to understand the whole aspect, not just what you what you thought was part. Peter Schravemade (53:51) Reed? Hmm. No, and I appreciate you coming online. Thanks for giving your time and answering those questions. I realise we've got to let you go. So if you want to jump off now, feel free to jump off and we'll ask some Sadhana some other questions. But thank Adrian, thank you so much for your time today on the call. I appreciate it. Kasey McDonald (54:16) You, Sadhana for joining us on Before the Weekend. And of course we just heard from Adrian Knowles, the CEO of Harcourts Australia. And I'd probably like to, you know, start with the lead-in. We've kind of finished talking about, you know, Realtair and the data play. Sadhana Smiles (54:20) My pleasure. Kasey McDonald (54:34) As to the decision-making process behind Harcourts decision to go to REA. So, where do you see now REIP's position in the market? In understanding that REIP Nexus also provides data, market insights, CMAs. You know, are you seeing this that it's going to change? These kind of partnerships with REA are going to change your positioning or REIP's positioning in market? Sadhana Smiles (54:58) There's about three questions in one there, Kasey. So I might I might just pull it apart and take one at a time. And I where I'd like to start is actually getting your listeners to this podcast to really understand who REIP is, because I think it for a lot of people they would go, who or what are you talking about? And so, you know, REIP has been around for nearly 11 years now. Kasey McDonald (55:01) Mm-hmm. There is. Try. Sadhana Smiles (55:24) And we are the only real estate group in Australia that has come together to advocate for the sector's data independence. Now we want to make sure that insights, innovations, and commercial value is reinvested back into the industry that collects the data at the front end. We have now today a membership of about 40% of Australian real estate, which is about 4,000 offices if you assume there's about 10,000 businesses in the country under real estate. And they all share their listing data to our hub. And then we also have some strategic partnerships with proptechs and digital suppliers that top up listing data. So that gives us between any at any point in time, between 80 to 85% of the listing data that is sitting in our hub. In terms of the partnerships, which is what, as you've mentioned earlier, Harcourts has announced. Ray White, Raine & Horne, and a number of others. I think it's important probably to understand in the first instance that the industry has been sharing listing data with portals and tech providers for free long, long before REIP existed. And so when you look at the partnerships that we're seeing coming up now, they are not new. I can understand why agencies want to maintain commercial relationships with market leaders, with REA or domain or others. I think it's also important to note that a lot of the entities that are buying data from REA are also buying data from us. So we are also a data supplier to Harcourts, and you guys are in tech, you know that you can't just live with one data source. You have to have multiple data sources there. I don't think well, I don't believe that The issue is whether the agencies choose to partner with REA. I don't believe that the partnerships change the underlying principle of why REIP exists. I think the critical conversation here from an REIP perspective is how do we make sure that the industry continues to have choice? There's a lot of competition around proptex and data, how the industry continues to have choice, that we have meaningful alternatives when it comes to data inside and technology. And I think what we're seeing today is we have got 40% of the industry who are committed to their membership of us and it is a growing base that we have got. and I so I think at the end of the day, from our from our perspective, are we concerned about the decisions that these brands have made and a lot of them are sitting around my shareholder table? No, because they're not mutually excluded, they're not, you know, tied in exclusively to each other. Kasey McDonald (58:04) Mm-hmm. Yeah. Sadhana Smiles (58:05) A long answer to your question. Kasey McDonald (58:08) No, No, no, no. No, and I think it was great. I think it is important that our listeners understand exactly what REIP is and its position in market and why on which it was obviously founded. I think that's absolutely really important. And you know, the key here though that I'd probably like to draw out of that if I can is around is that choice piece. Totally agree. I think it is important our industry has choice. But are you seeing that you know, with that 40%, what's the main I guess, I guess usage of REIP that you're seeing in the industry from that 40% of your member base? What are the tools they're using that you provide? Sadhana Smiles (58:46) Yeah, so we're not we don't provide any tools, Kasey. So I think I think we've got to have an understanding that and there was a question you asked me earlier around REIP Nexus. So there are two elements here. There's REIP, which is an industry organization focused on data independence, collaboration of agencies coming together, and wellness. There are three pillars that we work on. We have collaborations with proptechs and data suppliers to build our listing data, which we then resupply. Then there is an element where we are working on a further data play with other suppliers that goes beyond listing data. So that could be data that sits in CRMs, in property management products, in forms, and authorities. And you know, I can't tell you all the names, but we are talking a number of REIs. interesting enough, with your question you asked, Peter, we have another f number of forms. Peter Schravemade (59:39) Huh. Sadhana Smiles (59:40) Businesses around the table and other you know CRM entities around the table and we're doing a a large number of piloting with our shareholder brands around those unique data sets and how do we bring the value of that back to the businesses within real estate and back to the agent that's collecting that data. And I think that's always been our key role here is, you know, I'm an agent, I go to a an off an office, I go to a property, I collect the data. I bring it back, I put it into my CRM system. We all know there's always been value in that data, and that value hasn't been seen as yet. What we're trying to make sure is the industry is the one that brings that value back to the industry, not another proptech, because the danger we have when it's another proptech is we lose control of a lot of that how the data works with for the industry. The other part is REIP Nexus. We did a JV with a business out of New Zealand called Valocity. And the idea of that was to bring a CMA product to market. Now that is a startup, it's very much in its infancy. We are still in that, you know, it's it's we've got more traction out of the New Zealand market because in New Zealand you don't have as many competitors. Like in Australia, you've got two incumbents that have been established in the market for a significant period of time. And when you bring a third or fourth player into that, it's really hard to get cut through because as you both know, agents don't like to change. A lot of agents will have a second or third product in their offices just to make sure that what they're seeing on one screen is the same as the other screen, or they don't have all the data on one and they'll top it up with the other one. And so what we're doing at the moment is learning, you know, taking the lessons out of New Zealand and using our shareholder brands to bring the product to life in Australia. Sadhana Smiles (1:01:28) And that journey is not an easy journey because we have got, you know, two very strong incumbents in the marketplace. But I think what we what we the reason why we did that was to give the industry a third choice, to give the industry a choice where, yep, we are at a significantly lower price point. We're using industry data, we are a startup, we're doing our learning out of the New Zealand marketplace, and we've got a long journey ahead of us. Peter Schravemade (1:01:52) Sadly, you mentioned not handing a commercial proptech, you know, ownership of of data. You know, it's not in the best interest of the industry. But yeah, I would argue that, you know, three of the top four franchises you know, structuring a deal with the REA Group where I'm assuming there's going to be data transferred shared across is precisely that. Like it there's that's exactly what they're doing. and so what is what does that mean for REIP? You know, if they're entering a relationship like a Valocity happen to you about this, do they have a are they Sadhana Smiles (1:02:28) I can't Sadhana Smiles (1:02:29) I can't speak on behalf of Valocity, but I think I I'll go back to the key baseline of these partnerships, as Adrian mentioned, is around listing data. And as we all know that the listing data is widely available, it's not exclusive. I can go on ChatGPT and ask it to give me the current listings that are on the market for Harquarts and it'll give me a whole list. So the reason why these brands are doing it because they want to bring back their business, the propensity to list model, which requires them to have huge volumes of data. Sadhana Smiles (1:02:57) We're we're part of that data play. We still provide them with that industry-based data as well. What we're focusing on more so for REIP is the unique data sets that sit within businesses. How do we use that data to create the right insights for our agents to be able to provide better experiences, better advice to their clients? How they look at that data to understand their market share. To understand their performance, to understand farm areas, all those deep driven insights is what I'm focused on more than listing data, because we've lost the war on that. That got lot war got lost years and years and years ago. And so for us, the focus is how do we not lose, how do we not lose the war in all of our data, in all of our businesses? How do we, how does the industry maintain some level of oversight over that? Peter Schravemade (1:03:51) Look, I I actually like that cause. That rings true to me personally. how long has REIP been in existence for now? Sadhana Smiles (1:04:02) Well, see, this is the interesting thing, Peter, because it's been in existence for about ten years. And then there was a large; it had a very different start in its original form. We all know that. We don't talk about the dark old days, but we all know that. And then we had a period of time where kind of nothing happened and it it sat there had, you know, for whatever reason. I joined i five years. So i in the current I so, you know, I look at it as a startup, you know. I've got Ten shareholders around my board. and I think the important point here is those shareholders contribute funds every month into REIP to keep it financial. We don't take any dividends out, all profits are reinvested into REIP. When you go on a journey like we are at the moment and you know you need to get members in, you need to get engagement, you need to make sure that you've got your vision right, you need to make sure that it's the right one for the industry, it is a hell of a journey. And so when I look at where we are five years down the track, the next probably two or three years are going to be the most important for REIP, where we will get the most level of results in terms of what we're trying to achieve. Peter Schravemade (1:05:10) And so you know. Kasey McDonald (1:05:10) Sadhana, do so sorry, Sadhana, do you In t in terms of what you're looking to achieve, and I can see that there is that, you know, key difference there in the way you've explained that for our listeners, but do you not also see that is a play that those bigger data players have? And I'm talking about REA and domain, they're already doing that in terms of those insights. So not just focusing on the listings piece, they're also providing benchmarking. Scorecarding style data for the industry as well. So do we not see that there's some competing? Sadhana Smiles (1:05:45) They don't They don't get the insights directly from so for example, and we'll use this, let's say three of our largest shareholders use ABC CRM system, right? We won't name any names, ABC CRM system and ABC property management system. So what we can do within those systems is actually get permissions to be able to pull that data out to actually know how many appraisals are being done in a marketplace. That data does not exist with REA or domain because or portals or anyone else because it sits in that CRM system. We can use that system to pull out how many buyers are actually in the marketplace and attending opens versus what we see on the other side with sales coming through. We can look at property management data and say, you know, okay, so we've got all this marketing and advertising going up. We assume the last advert the last Rented price was the advertised price because that's what we have access to, which is where the current benchmarks and insights are being provided from. Well, we all know that the actual advertised price may not be the least price. And there's a whole bunch of properties get that get released. So what is the actual vacancy rate? How many properties go to market? What is the actual leased date amount? Is the least amount versus the released amount? What are the differences? And so these are Deep, and that's just a few examples that I've given of the data that is only uniquely sitting in businesses. And so when you can bring to life some of these insights and give the businesses and the agents that power to have a look at the data, have a look at the insights and say, wow, this is how my market is performing. These are decisions I need to make as an agent or business or property manager, but I can also share these with my clients, it brings a whole new lens to what we're trying to achieve. Kasey McDonald (1:07:24) Yeah, great. Well can you share with me a key success? Your what are the successes of REIP so far? Sadhana Smiles (1:07:31) I think I think the fact that I'm sitting here having this conversation with you, I think that, you know, I had a I had a bit of a bit of a when the somebody sent me the link to your podcast last week and said, have you heard this? And I had a bit of a laugh because Peter and I know each other and I wonder why Peter didn't reach out to me. But at the end of the day, the fact that you're talking about REIP, that the fact that we're sitting here on a podcast having this discussion, I think That shows that we're getting cut through, number one. I think one of our biggest strengths is, and one of our biggest successes, is the fact that we've got a committed group of shareholders that for the last 11 years have funded an organization to do what it is doing today. We've got some great partnerships with proptechs, who are specifically REIP partners. And the benefit of that back to our members is that they can go online and have a look. And you guys know there's like thousands of proptechs. There's a new one that pops up every day. And if you're in office and you're sitting there going, which one do I choose? Well, you can go onto our site and you can say, you know, when it comes to AML, REIP have partnered with these guys. So therefore, they must have done all of the research and all that sort of stuff behind that. Let's go and bring AML into the picture. we've got REIP Nexus, which you know we've already talked about. And so there is again, five years down the track, you know, we've done a data play, which I can't talk about now, but we know we are in the process of moving down, going down that path, which we will hopefully be able to talk more about towards the end of the year. so they're probably the key successes from my perspective. and you know, now that we are starting to bring insights, we're able to take a lot of stories to the press. You know, you look at Victoria, one of our partners is renowned here in Victoria when the auction market changes were announced by the Victorian government. Thank you very much. we did research with renowned back to the public in terms of how they felt that they were going to react around the auction market. And we were able to share those insights with the industry. So, you know, I can't give you one big thing, but I can give you lots of little things that we are doing that collectively, when you put them all together. Bring value back to our members. Kasey McDonald (1:09:49) Okay, so yeah, I think you know what I've heard is why REIP was created and how and which, or what your focus is now is really around that benchmarking, the insights to allow agencies to understand how they can be performing better rather than the play on this is what's listed and sold in the market. However, there could be some of those data aspects that might will be coming available. Sadhana Smiles (1:10:06) 100%. 100%. And Kasey, if I can add to that, you know, and I don't I don't know who your audience is or how wide your audience is, and I'm and I'm happy to share this within my network. You know, I look at this industry and I think it is a bit at a bit of a crossroads. and you look at all the changes that we're going through, and I and I constantly say to the industry, now is the time for industry leaders to collaborate. Sadhana Smiles (1:10:40) Now is the time for the industry leaders to come together and say, when we look at our industry, you know, putting listing data aside, when we look at all the other data that is available to us in our businesses, how do we as an industry make sure that we have ongoing facilitation of that data to bring the best of those insights and value and information back into the industry? Without also giving it away and buying it back where the profits of that go to shareholders rather than back to the industry. And I and I think that is a critical piece that as an industry we've got to sit back and say, crossroads, now's the time to make choices. And when we talk about this broadly within the industry, you know, it's not about REA needs to go or domain needs to go or the portals and over it's it's not about that. It's about self determination of industry data. And if we don't do it now, if we don't do it today, then we will we will lose the opportunity. We've got 40% of the industry on the journey. We get another 40% of the industry on the journey and what a different world we're gonna have. Peter Schravemade (1:11:47) So no, if I mean I l I love I love that. I think that all resounds with everything I agree. Like from a industry perspective, you know, I d I don't know how much of our podcast you listen to, but in episode two we were in I was I was off at the National Awards for Excellence and the Ostros, and there appears to be a groundswell of unification as far as the real estate institutes are concerned. And so if you were talking you know, about some kind of data play now, i it you know, there's there's been no better time. I think Queensland's been an offsider there for many, many years and now they appeared to be unified and there's a fresh approach and moving forward. So it'd be interesting to see if you had a chat to them. but one final question, I sorry. Yeah. Hm. Sadhana Smiles (1:12:32) Just to sorry, just to jump in, sorry, just to jump in there, Peter. We are talking to two REIs at the moment. We have no intention and never ever had any intention of replacing the REIs. Our goal would be to partner with every single REI in the country and help them bring revenue back into their businesses. And that is the conversations we're having with two REIs around the table at the moment. And that is what we want to do with every single REI around the country. We do not want to put Peter Schravemade (1:12:48) Mm, nice. Sadhana Smiles (1:13:04) Them out of business, we don't want to compete with them. We want to partner with them to bring them revenue so they stay relevant, particularly at the moment. You just got to look at what's happening with all the legislation changes around the country. the REIs at the moment play a really critical role in the representation of the industry and our customers. Peter Schravemade (1:13:23) Yeah, I wasn't inferring that you weren't you weren't playing with them. I was just saying that their direction is onwards and upwards. but if I'm a proptech, if I am a property technology company and there are a few of them that do listen to this podcast, how what incentive or why should I what's in it for me? Why should I join the REIP? why would I do that? Sadhana Smiles (1:13:28) Well, first of all, feel free to give me a call. I get calls from proptechs all the time, in particular a lot of startups, and they come to me for a number of reasons. First of all, they come to us because they're interested in obtaining data. So if they want listing data, they will come and have a conversation with us. they have a conversation with us because they want to be able to have access to our marketplace. So, you know, our 40% of our members and more, so they want to have access to a marketplace. And they also want to collaborate with us and you know, work, they believe in our cause, they believe in our direction, and they want to be able to collaborate with us to ensure that we achieve our goal and at the same time they achieve it as well. I mean, I had a conversation with a Prop Tech yesterday, and you know, he was quite surprised. We don't charge you to become a member. That's not our model. You know, we don't make money out of a Prop Tech because they have an REIP logo on their website. we look at a product. We want to make sure that it brings value back to the industry in whatever form it looks like. we wanna make sure that they're the right partner for us and then we go down the path of helping promote them to the marketplace that we have access to. Peter Schravemade (1:14:57) But that 40% that you keep mentioning, they don't by default have access to that. They're there's still choice amongst your members as to whether they use this product or not. Yeah. Sadhana Smiles (1:15:05) Absolutely. Abs absolutely. But you've got to have choice. I mean, otherwise it's anti-competitive behaviour, right? Everybody's got to have choice. All we're saying is that we've assessed eight products that do the same thing. Here is the two that we part and it's not because they're paying us any money, and that's we're very clear on that. It's because we believe that these two have the best products in the marketplace at the moment. Now just because REIP chooses a partner, that does not mean every member or every shareholder has to select that partner. That is not our model. you know, we our relationship is with our members is very much around we'll do the investigation, we'll do the research, here is our recommendation, but you don't have to use it. This is just a recommendation. Peter Schravemade (1:15:46) Yeah, but I guess I come back to that same question. Like I always thought the reason for joining REIP was that look, you know, we it once assessed, we would put you in front of our members. But like if in Valocity's instance, for example, where they're a data provider and three of your majors have now gone to PropTrack or through the REA Group, w is there you know, is is that a of benefit? Like is it is it something that Sadhana Smiles (1:16:13) Valocity through REI Valocity through REIPP still provides data to all of those three. So, so yeah, so again, you know, and I'm I've always said this whether you're a partner, whether you are REIP, whether whoever you are, you've got to earn the right to win the business. You've got to bring some value to the table. and, you know, with the three that you've spoken about, they all have a form of data deal with REIP. Peter Schravemade (1:16:18) Okay. Where are you? Sadhana Smiles (1:16:41) As well as other incumbents in the marketplace. So it's we're not just talking about we're only gonna do a deal with REA. I think that's an important thing to remember. And Valocity being our partner is part of that data deal. Peter Schravemade (1:16:52) Okay. I appreciate your time. Sada, thank you for jumping on and saying good day this morning. Is there anything else that you want to say to our listeners before we jump off? Sadhana Smiles (1:16:59) No, really, I mean if people listening, particularly the proptech and real estate agents, if you want to find out more and you know you've liked what you've heard, feel free to give me a call because you know, it's not an easy mission to be on. Peter and Kasey, you'll understand that. but I think it's an important one for the industry to understand and participate in because as I said earlier, if we don't do it now, then I think we might have lost a really good opportunity. Peter Schravemade (1:17:25) Yeah, I appreciate your time. Thank you so much, Sadhana, and it all the best in building REIP. Kasey McDonald (1:17:26) Yep. Thanks, Sadhana. Sadhana Smiles (1:17:31) Thank you. Kasey McDonald (1:17:36) So Peter, we have just finished our interviews with both Adrian Knowles and Sadhana Smiles. some great takeaways for us to be thinking about. I'd love to kind of hear, you know, what are your initial thoughts on what they both shared? Peter Schravemade (1:17:43) Yeah, look, I mean the referring to Adrian straight up, there's I have more probably more questions than the time allowed for Adrian and I won't I won't speculate on those you know, he's he's obviously generously given me the time this morning, but there are you know, there are a few things that don't make sense to me as a former operational real estate agent. And one of those is the rush towards propensity marketing. Like a lot of this Seems like a rush to propensity marketing. And now I've heard I've heard great things about propensity marketing. Don't get me wrong, it should actually sit in every agent's wheelhouse. But like let me let me drop on you some statistics that have been handed over. They're American. They're from our friends at the NAR, but our industry is not more You know, that much different from theirs. And in fact, I would say theirs is better on the lead generation side than the Australian side. But some statistics that dropped last week from the National Association of Realtors who were having their legislative meetings, 46% of sales volume comes from repeat business. That's just under half. Forty-four percent comes from referrals. That's a ninety percent combined has come from the per a person that the agent already knows. You know, I feel like we're in a market at the moment where we're placing too much emphasis on propensity. And I kind of get why the big brands are doing it. you know, Ray White has been particularly dominant in running out there and saying we've got NurtureCloud, we've got NurtureCloud, we've got NurtureCloud. You know, not yeah, NAR released a stat saying that ninety percent of sales are coming from somebody with a connection to you. That doesn't require propensity. It only requires propensity if you're not doing your job as a realtor or as an agent. So, you know, a lot of a lot of this race to that, I don't actually get. I don't understand why there's such a rush. what there should be, in my opinion, is more of a an effort to clean up the CRMs and the contact resources that you have at the moment. you know, is that healthy? Is that talking to each other? Because any old artificial intelligence plugged over the top Of a data set will give you that propensity marketing that you're so desperately running out there and seeking. And you know, I've shown time after time in front of audiences how we do that attached to a data source like RP data. So, you know, I'm I'm a little bit mystified as to as to you know what all the ruckus is about and why that's worth three, no less than three, four exclusive announcements if it's just about the data and the propensity marketing. So, you know, that's That's my take on it. but you can call me an old cynic. Kasey McDonald (1:20:37) No, look, I agree. I think, you know, the most of the data that's inside of CRMs, let's say it's dirty data, right? You know, it's we've got agents not entering the email address in, not putting a phone number in, they're putting a first name, not a last name. You know, so it's k comes back to how do we collect it and how are we managing that first party data and what processes have we got in place to be continually connecting Kasey McDonald (1:21:07) With the people that we've already done business with andor that have approached us to, you know, at open homes, for example. So I think, you know, I'm with you on a bit of old school real estate transaction processing. And I think I'm gonna draw back to something that Tim said a few episodes ago, is that now where we are in the marketplace, it's gonna draw out the agents that are that don't have these types of practices in place and actually Kasey McDonald (1:21:32) Operate and know how to operate as an agency without the use of technology. So I think yeah I don't know why we're we're focused on that piece. When we've got the data right there, it's are we actually utilizing that data effectively? And like you said, a layer of AI over the top of that. Peter Schravemade (1:21:38) Mm, yeah. I mean mm. I think it's even Kasey McDonald (1:21:52) And I've seen what you've done, you know, and how you've delivered that through sessions to show people how they can be pulling this kind of data out from their own data and other third party suppliers without the use of big major deals. Peter Schravemade (1:22:05) Yeah, my look, you know, I I also wonder whether it's a recruitment was saying we're Harcourts saying we're we're keeping up with the Joneses, if you wanna if you wanna say that. So maybe part of it's that as well. But you know, interesting and I really appreciate Adrian jumping on. As for Sadhana and the REIP, look, I you know, a lot of what Sadhana said in there resonates with me. I agree with that. you know, I'd just I'd like to see I'd like to Kasey McDonald (1:22:22) Absolutely. Peter Schravemade (1:22:35) See some way that this was impacting the industry or being shown some way that's imp it's impacting i the industry in a bigger way before I understood. You know, like if I if I was a proptech going there now with those three announcements, whether I'd I'd be particularly skeptical about what the benefit would be. And I did ask her those questions and she responded to that. So, you know, I take Sadhana at face value and that's the way you know that would be You know, if that response if you're a proptech and you're happy with that, then you know, th there's a there's actually a really good cause defined behind Sadhana and I commend her on that and I certainly hope that she progresses that cause along. I don't think the announcements helped to the REIP but I'm glad she came on here to actually announce what they still stood for and how those would work. And as we heard from Adrian, he referred to the fact that even though it's clearly labelled as an exclusive deal, his members will have their choice to do whatever they wish under those arrangements anyway. Kasey McDonald (1:23:44) Yeah, yeah, look, and I agree. I really appreciate both of their time. I think it's important that they've that they've, you know, shared their views and given us those additional insights around the deal and what it actually means as well for REIP moving forward. Peter Schravemade (1:23:48) But we have gone exceptionally long today. Kasey McDonald (1:24:04) We have. We've had some great we've had some amazing things to chat about though, So Peter Schravemade (1:24:09) Yeah, and I apologize if you're still listening at this point, you deserve a medal. you can pick them up from Kasey's house. but look, you know, definitely thought-provoking. It's worth asking these questions of what is actually going on in the industry. And so both Kasey and I appreciate you listening to our humble podcast. If there's something you've heard, if you think this information is a benefit, hit subscribe down below in any of the services that you wish. we're on all of them at the moment. You can email Peter Schravemade (1:24:39) Us at hello at Before the Weekend dot com. We're also both on all of the social media profiles out there except for the dating ones. Both of us are off the market sadly for you guys. But it's it's really good to have you on with us. I hope you've gone long today and look if you're out there and hunting on the weekend have a good one. I hope it's a happy hunting weekend for you and Melbourneites. If you can do something about this weather that would be appreciated. Kasey McDonald (1:25:00) Yeah, ha happy selling and happy leasing to everyone across the weekend. And that's a wrap on Before the Weekend.com. Peter Schravemade (1:25:14) Ciao.