The hidden cost of patchwork compliance in real estate (and how to avoid it)

Australia’s real estate industry is about to face a major shift. Tranche 2 reforms will bring agents and agencies under AML regulation for the first time. But, once again, Australia is the lucky country. Introducing the reforms now presents a rare opportunity.

Agencies here can learn from the mistakes others made. Instead of patch-working together systems or bolting on tools after the fact, they can create a considered AML tech stack from the outset.

The worst mistake seen in other markets? Piecemeal tech that created "Frankenstack" systems. Agencies added ID apps to their CRM, ran screening tools in isolation and relied on email chains and shared drives to manage documents.

It worked - until it didn't. One too many complex ownership structures or an agency acquisition brought everything to a halt. 

Most firms didn’t plan to build a Frankenstein stack – they just added what was missing at the time or absorbed systems their acquisitions already had.

Avoiding legacy mistakes

A CRM might manage your listings and leads, but AML is a separate layer. Without structured workflows and supporting tech for securely collecting documents, verifying identity and escalating red flags, things quickly fall apart.

You don’t notice it when you’re onboarding a local buyer. But when a family trust appears, or a sanctions match comes back with a false positive, your process stalls. Admin teams scramble, deals are delayed or lost and compliance risk quietly builds.

It’s not the passport check that causes problems. It’s the trust deed, the offshore nominee, or the missing birthdate on a sanctions hit.

The typical patchwork

Even in mature markets where AML legislation has been in force for many years, we've seen real estate firms where their "tech stack" includes:

• A buyer submitting ID over WhatsApp
• Source-of-funds documents emailed to an unsecured inbox
• PEP hits are flagged but no one knows who should review it
• Trust structures get stuck because the CRM doesn’t support layered ownership

As mentioned before; it works, until it doesn’t.

Think in workflows, not just tools

Collecting ID is just one step. What happens when a check fails? Who triages a red flag? Where is the audit trail? What happens when regulations change, or risk profiles shift?

Don't fall for the allure of a front-end that dazzles, but the back-end infrastructure crumbles.

Good AML technology isn’t about collecting documents or verifying identities. It’s about enabling your actual workflow while automating the admin so your team can focus on assessing and managing the actual risk. Not to mention, ensuring the commercial side of the transaction keeps moving without unnecessary delays or duplicated effort.

Avoiding the custom-build trap

Some agencies try to DIY compliance; hiring developers to hard-code fields into their CRM, or stringing together no-code tools to approximate an AML process. But that creates operational and technological debt and fragility.

A smarter alternative is to use a configurable AML layer, purpose-built for compliance but flexible enough to reflect your risk-based approach. You still control the workflow, but the system gives you the structure to handle exceptions, record decisions and adapt without starting from scratch.

Individual AML tools give you scattered building blocks that still need to be stitched together—usually by people, spreadsheets or guesswork. Purpose-built platforms give you a solid foundation, so you can build once and scale with confidence.

Conclusion

Tranche 2 is coming; but the panic doesn’t have to. Agencies that start now can build AML systems that handle the complexities of real estate transactions without burdening their team or losing deals. Avoid the patchwork. Build it right the first time.