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Daryna ZadvirnaThe West Australian Listed WA realtor The Agency says it is benefiting from structural changes in the real estate industry and pressure on franchise business models, with
veteran agents quitting rival businesses because of high overheads. Fair Work Australia last April ordered changes to the way agents are paid, banning commission-only structures for agents
earning under $52,000. Former Real Estate Institute of WA president Hayden Groves said the minimum income threshold rules had led to some businesses shedding staff. “Previously, once you
qualified to be a commission-only sales person, you didn’t need to make any minimum amount,” he said. “But now if you earn less than about $52,000 a year, the employer can no longer keep you
on a commission-only basis — they must either fire you as your commission-only contract would end anyway, or you’d go on to a retainer.” “Going forward, I think a lot of agents running
businesses will have to go back out there and do a lot of the selling themselves.” Agent Michael Keil last year quit his award-winning business to go solo by joining The Agency. “The
commissions are low due to competition, the reps always want more and there’s constant pressure from the rising costs of running a business, so it was just more financially viable to give it
up,” he said. “You can’t carry people now with these changes — people have to produce results and in difficult market conditions. “If you’re a good operator and sales person and can no
longer afford a business and a real estate office, you’ve got to focus on selling and tap into a high-commission model.” The Agency director Paul Niardone said the industry needed to evolve
with the times. “Our model’s performance has shaken the industry and now it’s under even more pressure from the award changes,” he said. “The unfortunate consequences of these changes are
that people who are close to retiring are not able to make a living and it’s also going to make it hard for young people to get into the industry.” WA Department of Mines, Industry
Regulation and Safety data indicates 7 per cent of sale representatives left the industry in the past 12 months. REIWA boss Neville Pozzi said the figures “reflect more the real estate
market that we have experienced over the last four years”. GET THE LATEST NEWS FROM THEWEST.COM.AU IN YOUR INBOX. Sign up for our emails