Transparency, Trust and Turbulence in Real Estate

Intro and REA Group / REIP Discussion

Kasey McDonald: Welcome to Before the Weekend, your go-to real estate podcast where we cut through the noise and deliver what truly matters. I'm Kasey McDonald, and I'm here with my co-host, Peter Schravemade, who I hear has a bit of a sniffle today. How are you feeling, Pete?

Peter Schravemade: A sniffle isn't the problem. It's the burning at the back of the throat. I've got the man flu, and it's terrible. It's the worst.

Kasey: In the first few moments of us chatting offline, all I've heard is complaints about the man flu.

Peter: I haven't been that bad. I'm actually on the upside now. Two days ago, though, you should have heard me. I was definitely complaining then.

Kasey: Should we get you a Mickey Mouse badge, or maybe a violin?

Peter: I'll survive. I think.

Kasey: Well, we've got plenty to talk about today, but one story that landed in our inbox this afternoon caught my attention.

Peter: Yes, it did. The article was published on 10 June and comes from Elite Agent. A big shout-out to Sam and Mark and the team over there. The story centres around REA Group signing significant new partnerships with two of Australia's largest franchise networks in quick succession. Most recently, Harcourts and REA Group announced a new partnership. Just a week earlier, Ray White announced a similar arrangement. This follows previous announcements involving other major groups, so we're starting to see a trend emerge. What I find particularly interesting is the impact this may have on a little-known industry organisation called REIP. Kasey, you've come across REIP before, haven't you?

Kasey: Yes, although probably not in great detail. For listeners who may not be familiar, perhaps it's worth explaining exactly what REIP is.

Peter: REIP stands for Real Estate Industry Partners. I've followed it from a distance over the years. My understanding is that it was established around the idea that the real estate industry shouldn't be completely dependent on REA Group and Domain for data, lead generation and long-term commercial sustainability. The language around REIP has always suggested a collective industry effort to create greater data independence and alternative infrastructure. What's interesting now is that some of the largest franchise groups associated with REIP are signing strategic partnerships with REA Group. That raises questions about where REIP sits today and what its future looks like. I've got to assume these deals aren't purely about portal advertising. The obvious addition is PropTrack and the broader data ecosystem that sits alongside it. Would you agree?

Kasey: Absolutely. One thing worth noting is that every announcement about these partnerships talks about more than listings. There's mention of preferred commercial rates, access to REA Pro products, PropTrack data, and a wider suite of technology solutions. It's becoming much more about operational integration than simply advertising property listings.

Peter: Exactly. The announcements suggest REA is embedding itself more deeply into franchise infrastructure, workflows, events and technology systems. In the Ray White deal, for example, Realtair is referenced as part of the arrangement.

Kasey: And Realtair covers things such as digital proposals, appraisal workflows, contract generation and client engagement processes. Combined with PropTrack's CMA and analytics capabilities, agencies are receiving access to a broad suite of tools under the REA umbrella. My understanding is that many of these products now sit within the overall REA Pro offering.

Peter: Which brings me back to the question: where does that leave REIP? When you look at the organisations involved, we're talking about major groups including Ray White, Harcourts, Century 21, PRD and others. If some of the largest members are entering these agreements, it naturally raises questions about what happens next. I'd genuinely like to get someone from REIP onto the show to explain how they see the landscape evolving. The last person I remember being heavily involved was Sadhana Smiles, so it would be fascinating to hear her perspective. To be clear, I don't criticise any franchise group for making commercial decisions they believe benefit their members. They have an obligation to do what's best for their network. What interests me is the scale of these agreements and what that says about the industry's future direction.

Kasey: I agree. There must be a compelling commercial proposition for these groups to move in this direction. What's important now is understanding what that means for industry independence, data ownership and the future role of portals in the broader technology ecosystem.

Listings Accumulating and Changing Market Conditions

Peter Schravemade: Let's move on to our next story. This one centres around properties sitting on the market longer in parts of Australia. Stock is beginning to accumulate, buyers are becoming more cautious, and vendors are still anchored to peak market pricing. The result is that agents are having to work much harder to secure buyers and negotiate successful outcomes. For the past few years, particularly in Queensland, the market has been very generous to agents. Now it feels like we're entering a period where the market might start testing agents again. What do you think?

Kasey McDonald: I agree. This is something Tim Lawless touched on when we interviewed him at AREC. He spoke about changing market conditions and how agents need to adapt their approach as the market evolves. He also discussed Melbourne housing values and how affordability has improved relative to other capital cities, making it an attractive market for buyers. This article makes a similar comparison and suggests that Sydney prices are beginning to soften as well, with a broader market correction underway. Some forecasts are suggesting corrections of up to 10 per cent in certain areas, which aligns closely with what Tim was discussing with us in previous episodes.

Peter: Yes, and what's interesting is that many experienced agents I've spoken to are actually welcoming the change. Not because they want vendors to suffer, but because many of them view real estate as a professional service business. Over the past few years, we've seen people enter the industry who have become accustomed to listing a property, uploading it to a portal and waiting for buyers to appear. In a strong market, that's often enough. But as conditions tighten, agents have to return to the fundamentals. They need to understand: - Who the likely buyer is - Where that buyer can be found - How to position the property - How to market effectively - How to negotiate successfully Those skills become much more important. I'm genuinely interested to see what emerges from this next market cycle.

Kasey: I think you're right. The agents who are already doing those things well will continue to perform because they've never relied solely on market momentum. They're already accustomed to: - Managing vendor expectations - Negotiating with buyers - Identifying target audiences - Building buyer databases - Prospecting effectively The agents who have become reliant on simply listing property and waiting for the market to do the work may find the next few years much more challenging. I wouldn't be surprised if we start seeing some people leave the industry because they haven't developed those core skills.

Peter: It's always fascinating watching these cycles unfold. When I first entered real estate, I started during a strong market. At the time, I didn't realise how much the market itself was helping me. Then conditions changed. Suddenly properties became harder to sell, buyers became more cautious, and I found myself relying heavily on experienced agents around me. I had to learn what real estate looked like when the market wasn't doing all the heavy lifting. It was a valuable lesson. You suddenly realise that the buyer tap can be turned off very quickly. When that happens, the quality of the agent becomes much more important.

Kasey: Exactly. And the best agents are often revealed during those tougher periods. They're the ones who can: - Have difficult conversations with vendors - Adjust pricing strategies - Work buyer databases effectively - Create opportunities rather than simply waiting for them Those skills become incredibly valuable when the market slows.

Peter: And that's why I think this story is worth watching closely. If listings continue to build and properties take longer to sell, we're likely to see a greater separation between agents who can genuinely add value and those who have simply benefited from favourable market conditions. The next twelve months could be very revealing for the industry.

Kasey: I agree. Markets change. The fundamentals don't. And the agents who continue to focus on relationships, communication, negotiation and professionalism are usually the ones who emerge strongest when conditions become more challenging.

Peter: Well said. Now, speaking of market conditions and government intervention, let's move on to Victoria, because there has been another significant development that has generated plenty of discussion across the industry. The Victorian Government is moving ahead with reserve price disclosure reforms. And that's where our next story begins.

Victorian Reforms, Underquoting and Agent Reviews

Peter Schravemade: Let's move on to Victoria. This next story has generated a lot of discussion across the industry. The Victorian Government is introducing Australian-first laws requiring sellers to disclose their reserve price seven days before an auction. They're also requiring sale prices to be published once the property has sold. The intent is clearly to address underquoting, which has been a major issue in Victoria and New South Wales for many years. Most of the auctioneers I've spoken to are strongly opposed to it. They don't like it at all. Do you think this is the right solution?

Kasey McDonald: Probably not. I understand what the Government is trying to achieve. They're trying to create greater transparency and reduce underquoting. But I'm not convinced this is the answer. You and I both know some exceptional auctioneers, including our good friend Warren Tate, and every auction professional I've spoken with has suggested that disclosing the reserve price before auction fundamentally changes the process.

Peter: I tend to agree. One of the strengths of the auction process is that it allows the market to determine value on the day. If you publish the reserve price a week beforehand, you're effectively influencing that process. You're no longer allowing buyers to compete freely and establish market value through open competition. Instead, you've introduced a figure that immediately becomes the focal point. That's my concern.

Kasey: Exactly. Real estate is ultimately worth what a buyer is prepared to pay. As agents, we use: - Comparable sales - Market data - Buyer feedback - Local knowledge To establish an estimated value range. But at the end of the day, it's the market that determines the final price. The auction process exists to test that. Publishing a reserve beforehand changes the dynamic entirely.

Peter: And the REIV has come out strongly against the proposal. They've commissioned independent research suggesting that 94 per cent of vendors would reconsider their selling strategy if required to disclose their reserve price beforehand. If that happens, we may see fewer auctions and more private treaty transactions. Ironically, while the reforms are designed to improve transparency, they could potentially reduce it.

Kasey: That's exactly the concern. At least with an auction, buyers can see what everyone else is doing. They can see the bids. They can see the competition. It's a very transparent process. If sellers move towards private treaty sales instead, much of that transparency disappears.

Peter: That's one of the biggest points for me. Buyers often complain about underquoting, and understandably so. But one thing buyers dislike even more is not knowing what they're competing against. In an auction environment: - Every bid is visible. - Every participant can see what's happening. - Everyone knows where the market is sitting. With private treaty negotiations, none of that exists. Everything happens behind closed doors.

Kasey: And I think governments sometimes make decisions without fully consulting the people who work within the industry every day. There are experienced practitioners, industry bodies and auction specialists who understand how these processes operate. The concern is that legislation is being introduced without fully understanding the practical consequences.

Peter: I also can't help wondering whether some of this is politically motivated. The Victorian Government isn't exactly enjoying widespread popularity at the moment. Perhaps these reforms are designed to appeal to frustrated buyers ahead of future elections. I hope that's not the case, but it's difficult not to ask the question.

Kasey: There are certainly a lot of changes happening in Victoria at the moment. I was speaking with Hayley Mitchell earlier this week and she mentioned another reform involving early release of deposits. Historically, under certain circumstances, vendors could access deposits before settlement if both parties agreed. That's changing as well. So there are multiple reforms being introduced across the Victorian property landscape simultaneously.

Peter: And it feels like the industry is constantly having to adapt. I certainly don't envy the job facing people like Toby Balazs and the REIV team right now. They seem to be responding to new changes every other week.

Agent Reviews and Pricing Accuracy

Peter: Now let's move on to another Victorian story. This one comes from a Sydney Morning Herald investigation. The article looked at some of Victoria's least accurate pricing agents and found something quite surprising. The investigation suggested that agents whose properties regularly sold significantly above their advertised price guides were still maintaining near-perfect online ratings. In fact, forty-nine of the fifty agents identified in the report had ratings above 4.9 stars. That raises a pretty obvious question. If buyers are consistently frustrated by inaccurate pricing, why are these agents still receiving such glowing reviews?

Kasey: I think part of the answer lies in who is actually being asked to leave those reviews. Most agents actively request reviews from their sellers. They're often sending links through systems such as RateMyAgent and encouraging vendors to provide feedback. The people leaving reviews are usually the people who achieved a successful outcome.

Peter: Exactly. And that's one of the key findings of the article. The reviews are overwhelmingly coming from vendors. The people most affected by inaccurate pricing are often the buyers. Yet buyers generally don't have an equivalent mechanism to leave meaningful feedback about their experience.

Kasey: And if you sold my house successfully, achieved the price I wanted and delivered a good result, I'd probably leave a positive review as well. That's perfectly understandable. But it doesn't necessarily reflect the experience of every person involved in the transaction.

Peter: That's the issue. An agent may have fifty disappointed buyers who feel they were misled by pricing. But they only need one happy seller to receive a five-star review. The review system doesn't necessarily capture the full picture.

Kasey: That's true. While anyone can leave a Google review, many agents are actively directing vendors towards review platforms that are specifically designed to collect seller feedback. As a result, we're not necessarily getting a complete representation of the customer experience.

Peter: One aspect of the article I found particularly concerning was the allegation that some agents are using legal threats to suppress negative reviews. One buyer reportedly received a legal demand seeking significant damages over an online review. We've seen similar behaviour in other industries, but it's disappointing to hear those allegations appearing within real estate.

Kasey: Reviews are incredibly important. Consumers rely on them. Whether you're booking accommodation, choosing a restaurant or selecting a real estate agent, reviews influence decision-making. But no business is perfect. What's often more important than the review itself is how a business responds. I've always advised property management businesses not to hide from negative feedback. Instead, acknowledge it professionally and demonstrate how you're addressing the issue. Consumers pay attention to that.

Peter: I completely agree. Property managers probably deal with this better than most because they're constantly exposed to criticism, whether it's justified or not. The way an agency responds to criticism often tells you more about the business than the criticism itself.

Kasey: Absolutely. Transparency and accountability are what build trust over the long term.

Peter: Well, speaking of accountability and regulation, let's move into our next story. Because this week we also saw one of the first major AML/CTF enforcement actions connected to the property sector. And that's a discussion every real estate professional needs to be paying attention to.

AML/CTF and Property Fraud

Peter Schravemade: Let's move on to AML/CTF. Unless you've been living under a rock, you'll know that anti-money laundering and counter-terrorism financing obligations are coming to the real estate industry. Registration requirements are approaching, and it's becoming a major discussion point across the profession. Historically, banks and legal practitioners have been subject to these requirements, but this week we saw a significant enforcement action that highlights exactly why these reforms are being introduced. A 32-year-old Sydney solicitor has become the first legal professional charged under a major fraud investigation known as Strike Force Middleton. The investigation reportedly began with fraudulent vehicle loans before expanding into alleged large-scale mortgage and property fraud. Authorities allege the scheme involved a banker, a mortgage broker and a solicitor working together. AUSTRAC and law enforcement agencies have reportedly restrained approximately $95 million worth of assets linked to the investigation. Many agents continue to ask why real estate needs AML/CTF obligations. To me, this case demonstrates exactly why governments and regulators are concerned. Property has long been identified as a potential vehicle for money laundering and financial crime.

Kasey McDonald: I think the important thing to understand is that these measures are ultimately about protecting everyone involved in a transaction. If I put my property management hat on for a moment, we already deal with situations where we hold money in trust and transfer funds on behalf of landlords. Think about something as simple as a landlord emailing and saying: "Hi Kasey, I've changed my bank account details. Please send future payments here." What processes do we have in place to verify that request? How do we know the instruction is genuine? AML/CTF is simply another layer of protection designed to verify identities and reduce opportunities for fraud.

Peter: Exactly. Some agents have said to me, "What does it matter if something slips through?" Well, here's a real-world example. The allegations suggest that proper identification and verification procedures may not have been followed. When that happens, money can move through the system without the appropriate safeguards. That's precisely what these reforms are trying to address.

Victorian Rental Reforms and Cover Letters

Peter: Let's move into property management. We've already spoken previously about Victoria's rental reforms and the move toward a more standardised rental application process. This week I came across an interesting social media discussion. A prominent property manager was frustrated because prospective tenants had submitted the official rental application form but had not included a cover letter. The property manager suggested applicants should be providing one. My understanding is that under Victoria's rental reforms, tenants aren't required to provide a cover letter. They can certainly choose to do so, but agents cannot require it. What's your understanding?

Kasey: I think that's correct. There may be ways of suggesting additional information could be helpful, but it certainly can't be compulsory. You couldn't refuse an application simply because a tenant chose not to provide a cover letter.

Peter: That was my understanding as well. The interesting part was that the tenants pushed back and said they weren't required to provide one. The property manager was clearly frustrated by that response. It raises an interesting question about how quickly legislation changes and how difficult it can be for practitioners to stay across every reform.

Kasey: Absolutely. It reinforces the importance of ongoing education and professional development. That's one of the key roles of the Real Estate Institutes and industry training providers. Professionals need to remain informed about legislative changes so they can operate within the current framework.

Peter: That's a really important point. The property manager involved is knowledgeable and experienced. I suspect this was simply a case of legislation changing and industry practice evolving. The reality is that there is now so much regulation that staying current is a challenge for everyone.

Kasey: Particularly in Victoria. There are already further changes coming around compliance and minimum housing standards. It's a lot for agencies to keep up with.

Peter: Three Victorian stories in one episode. Sorry, Victoria.

Agents Giving Investment Advice

Peter: Let's move on to another topic that has caught my attention this week. Following my recent conversation with Antonia Mercorella, one observation really stuck with me. She expressed concern about the amount of investment advice being handed out by real estate agents. And to be honest, I've noticed the same thing. This week alone I've seen multiple agents publicly advising people whether they should buy, sell, hold or invest. Some are saying: "Don't sell your property." Others are saying: "Now is the time to sell." The problem is that every client's circumstances are different. What concerns me is that many of these opinions are being delivered as though they are personalised financial advice.

Kasey: I think this one is fairly straightforward. If you're not a licensed financial adviser, don't provide financial advice. There's nothing wrong with referring someone to a qualified professional who can help them assess their circumstances. That's exactly what should happen.

Peter: I agree. Agents are absolutely entitled to have an opinion. An appraisal itself is effectively an informed opinion about a property's likely value. But there's a difference between saying: "In my opinion, this is what the property may be worth." And saying: "You should buy this." Or: "You should hold this investment." Those are very different conversations.

Kasey: Exactly. Even economists are struggling to predict market movements at the moment. Interest rate expectations seem to change every week. There's no reason for agents to place themselves at risk by stepping into areas outside their expertise.

Peter: That's really the key point. Share your opinion if it's relevant. But make it clear that it's an opinion. Don't present yourself as a financial adviser if you're not one.

Real Estate Advertising and Social Media

Peter: Let's finish on a lighter note. The ABC's Gruen team has been having some fun with real estate advertising recently. And, to be fair, we make it pretty easy for them. I saw a campaign from my hometown of Rockhampton this week where an entire sales team had used AI to enhance their appearance and make themselves look like bodybuilders. The slogan was essentially: "We're the strongest real estate team in town." It was certainly memorable.

Kasey: It definitely got attention. And that's probably the point. We might laugh at it, but if people are talking about it, then from a marketing perspective it has done its job.

Peter: That's true. The Gruen segment was poking fun at some of the clichés we see in real estate marketing. But the reality is that agents are constantly looking for ways to stand out. Some campaigns work. Some don't. But visibility matters.

Kasey: And whether we love them or hate them, those campaigns often generate engagement. The reel itself attracted thousands of likes and comments. People are talking about it. And here we are talking about it too.

Peter: Exactly. Years ago, one of my mentors encouraged me to run a newspaper advertisement that said: "Everything I touch turns to sold." Now, was that entirely accurate? Probably not. But it got attention. And sometimes that's exactly what advertising is designed to do.

Kasey: I don't think I would have bought anything from you based on that advertisement.

Peter: Fair enough. But plenty of people did. And importantly, it generated listings.

Closing

Peter: Well, thankfully this week hasn't been quite as dark as some of our recent episodes. We've had a few more positive stories to discuss. And despite Kasey's lack of sympathy, I think I'm surviving the man flu.

Kasey: You were never going to get sympathy from me.

Peter: Probably not. Well, that's Episode 5 done. If you're listening and enjoying the show, don't forget to subscribe wherever you get your podcasts. The easiest way to find every episode is by visiting: beforetheweekend.com You'll find links to all major podcast platforms there. We'd also love to hear from you. Send your feedback, story ideas and guest suggestions to: hello@beforetheweekend.com Kasey, what have you got planned for the weekend?

Kasey: I'm heading up to your neck of the woods. No, I'm not visiting you. I'm heading to the Noosa Eat and Drink Festival to enjoy some fantastic food and wine.

Peter: That sounds like a great weekend. It's practically around the corner from my place. Very well played.

Kasey: And I'm bringing my husband.

Peter: Excellent. As for me, I'll be preparing for a family wedding next week. I'm heading down to Melbourne and really looking forward to it. To everyone listening, wherever you are this weekend: Happy hunting. Happy selling. Happy listing. And thanks for joining us for another episode of Before the Weekend. Kasey, have a fantastic weekend.

Kasey: You too, Pete.