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There’s been a massive shift in the way agents see the traditional agency business model since the pandemic reached Australian shores at the beginning of 2020.
The founder and CEO of UrbanX, Dan Argent, has argued that major change is rarely an overnight event, but the Australian real estate industry is currently in the midst of a massive — and accelerating — shake-up.
“Almost two years ago, the traditional career path for agents was still to work for a franchise,” he said.
That structure would see agents giving up their commission to a franchisor, with Mr Argent labelling many of the expenses garnered in the course of an agent’s work as “extremely inefficient”.
Citing fees and restrictions, and considering that “it just didn’t make sense”, Mr Argent said, in the corresponding period since 2020 kicked off, “more agents are realising the inequities”.
“They’re now aware that they’re the primary generator of income when it comes to earning commissions, but they get little support from their employers,” he said.
“Not only that, but agents are marketing themselves in their specialty areas, bringing in potential buyers and pitching for the listing. They are driving to people’s homes (in their own vehicles) to sign up sellers. They are co-ordinating advertising programs and auctions, and carrying out negotiations to bring about a sale. They are also nursing transactions through to settlement.”
According to Mr Argent, with more agents pushing against the traditional ways of working, he’s observed that “the old guard are none too happy” with the changes that have occurred in just a little over a year.
He raised: “Notice that at no point across all these processes is working for a major franchise a necessity.”
From his perspective, it’s more of a hindrance, “because big organisations often restrict the agent’s freedom to market themselves and their properties the way they deem most effective”.
He added that those “people whose established income streams rely on maintaining the status quo will not only repel change, but try to derail it because it threatens their wealth and power”.
It’s also led him to deliver a warning of sorts, citing some of the “big disruptions” that have taken place in the last decade alone: “Uber versus taxis, Airbnb versus hotels, Amazon versus retail.
“All these shifts have created multibillion-dollar businesses built by breaking a traditional mold.
“And it’s not like those industries shouldn’t have seen it coming…”
To illustrate his perspective even more, the CEO offered up the example of a former photography giant: “Kodak had a 27 per cent market-leading share of the digital space in 1999, that dropped to 15 per cent by 2003. In 2012, Kodak filed for bankruptcy.”
Mr Argent’s stance is that “any major business who continues to profit unfairly off their agent’s hard work is destined to be left in the wake of change”.
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