For years, trust accounts have been treated as a compulsory, labour-heavy part of agency life. Lucas McEntee, CEO and founder of Riverstone Partners, believes that assumption is no longer necessary.
Through Riverstone’s Agency Settlements platform, he argues agencies can remove a significant portion of trust-related admin and reduce operational risk.
“Agency Settlements helps remove the need for a sales trust account,” he says.
“We collect the deposit securely, issue the trust receipt, notify the conveyancers, and then at settlement the funds go to the vendor in one payment, we then pay the agency its commission.”
“The agency pays us for our services when they get paid,” Mr McEntee says.
Cutting the process from twelve steps to three
The traditional deposit process involves around twelve points of manual handling; Agency Settlements distils this into three steps.
“The first step is sending the request for payment,” he says.
“Agents can display a QR code on their phone or send a multifactor-protected email or text. “The buyer pays the deposit in the safest way possible, with no buyer daily transfer limit issues.”
Next, the admin person confirms whether the full or part deposit has been made and enters the disbursements. “That’s the only manual part the agency has to do,” he notes.
“The final step is already familiar – we send the release order from PEXA so the agent can hand the keys over.”
The hidden cost of “the usual way”
Mr McEntee says many principals underestimate the admin load tied to marketing invoices, deposits, reconciliation and supplier payments.
“We calculated that the administrative person doing this work is somewhere around $800 to $1,000 a listing,” he says. “We can reduce that to a few hundred dollars.”
Agency Supply Pay aims to streamline supplier payments.
“All admin staff do is tick a few boxes and we pay the suppliers directly at settlement,” he explains. “It removes the need to lodge invoices or chase amounts owing.”
Why principals are comfortable handing it over
Despite expecting some initial resistance, Mr McEntee says principals have welcomed the shift.
“When principals see the reduction in reconciliation, the removal of buyer daily transfer limits and the fact that adjustments can be handled in PEXA without them, they just say, please take it,” he says.
One Queensland principal told him the biggest change was psychological.
“They said they could take a holiday for the first time knowing a settlement wouldn’t fall over or be neglected. All securely managed by us”
The cost of maintaining a trust account is a further driver.
“Running a trust account can cost eight to ten thousand a year,” McEntee says. “As long as the agency never takes funds in trust, you don’t need to run one.”
A safer way to receive deposits
Riverstone’s use of PayTo and BPAY means agencies can verify exactly who paid the deposit, an issue that will become more important as AML requirements expand.
“If Catherine buys a property but Xu pays the deposit, you need to know the relationship,” he says. “With the old system, you often can’t tell who made the payment. With PayTo, you can.”The system, he adds, positions agencies well for next year’s AML changes.
“Agency Settlements gives agents a safer, cleaner process and removes a large amount of administration. It also sets them up for the AML changes coming next year.”
