Purplebricks boss Michael Bruce has brushed off criticisms of his business model – but said that the experience of appearing on Watchdog to answer criticisms was hurtful. In a new interview, he also said that because sellers never actually see the money they pay high street agents in commission, the money is ‘virtual’.
In a new interview, with the Telegraph, Bruce said that lessons will be learned from the BBC programme, which included criticisms of the firm’s deferred payment model.
The programme, broadcast in early August, suggested that sellers who chose that option were unaware that they were signing up to a credit agreement with Close Brothers.
One customer said their Local Property Expert was based 30 miles away. Another seller said that Purplebricks had promised to hold their hand, but hadn’t.
He told the paper: “It’s absolutely certain that it hurt me, and every single member of our team who was watching that programme will have been hurting. Because they care and they don’t want that to happen. Are there things to learn from Watchdog? Of course.”
In the interview, Bruce defends his view that Purplebricks’ flat fees charges are transparent, charged whether or not the property is sold.
According to the piece, by Isabelle Fraser: “[Purplebricks] charges a flat fee of £849 – and £1,119 in London – regardless of whether the house is sold; it also charges extra for services such as photography and someone to show viewers around. This is in comparison with average fees of 1.3% for more traditional competitors, meaning listing it with Purplebricks could be a quarter of the price than with Foxtons.
“For Bruce, that’s key. ‘Because paying an estate agent is virtual money, it goes through the process, the lawyer deals with it, you never see it – it’s a very different proposition’.”
He told Fraser that attitudes would change if the customer had to hand over commission in cash to high street agents.
The interview underlines that in percentage terms of listings marked SSTC, Purplebricks is now the UK’s second most successful agent.
According to UBS, it has around 5% of total listings marked SSTC. Connell’s percentage is 5.3% and Countrywide’s is 4.6%.
The interview is also revealing on Purplebricks’ attitude to publicity, with Bruce claiming: “I think we keep ourselves to ourselves in many ways.”
Criticism, he says, was always going to be levelled at a business trying to make a seismic change in an industry that hasn’t changed for a long time.
But, says the article, the criticism hasn’t just come from traditional agents but from online rivals, including Nested which described Purplebricks as the Ryanair for estate agency.
But as Bruce admits: “You don’t go out and play with the big boys in the playground if you’re not willing to be knocked around a bit.”
Are those statistics accurate?
“The interview underlines that in percentage terms of listings marked SSTC, Purplebricks is now the UK’s second most successful agent.
According to UBS, it has around 5% of total listings marked SSTC. Connell’s percentage is 5.3% and Countrywide’s is 4.6%.”
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Surely not. Are we really suggesting that 95% of sellers are paying an average of £1000 and not selling?
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As the wimpy swot in the playground I will simply look over the top of my NHS specs and think a quiet thought to myself. ‘The silicon chip inside her head, gets switched to overload…..”
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He told Fraser that attitudes would change if the customer had to hand over commission in cash to high street agents.
I think attitudes towards their model would change far more if they were to reveal their true FACS…..Fee Average per Completed Sale (or sales completed through them compared to number of fees received)…in an open and transparent way to enable potential clients to make an informed decision, before they are charged.
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Just going to leave this here…
‘The company has done all this while not yet making a pre-tax profit; last year it made a loss of £6m. Meanwhile, Bruce, grudgingly, has entered the chief executive lifestyle by buying an Aston Martin – but only after his wife told him he “was a bit miserable for not ever buying anything”.’
Yup, I can feel your pain, Michael… a whole heap of pain as you take money up front from people whether you sell their home or not. No profit, but your wife is right, it’s important little Brucey is happy
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A Brucey Bonus you might say
for losing money
woukdnt have happened in Forsyth’s day!!
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‘Total listings marked SSTC’ does that include ones that PB have had on the market that other agents have sold?
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Isobel agrees that average estate agency fees are 1.3% (including VAT) so why is PB’s default fee comparison on their website still showing 1.5%?
Is that not misleading?
The real disruption to the industry is that 1000s of people are now paying for a service that does not complete and may go on to pay two agency fees?
Is that not the real seismic change to the industry?
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Clients might not see the money but they aren’t stupid, they know in pounds how much will be taken if and when and only when a sale has completed that the money will be taken and as for keeping themselves to themselves! I hardly think a nationwide knocking of estate agents via national television is keeping a low profile!
we all know a new business has to make a splash to get noticed but to throw the water over the competition in such a way as they have done was always going to receive criticism from those of us that got wet and unjustifiably too in my opinion.
Also if their adverts are so transparent and this is in addition to the adjustments made after the ASA advise then why isn’t it said rather than planted in small print hardly visible at the bottom of the screen and in any case the visuals are the people which takes your eyes away from text which is how they are designed to work thus making a mockery of the ASA’s guidance, I can hear laughing and it’s coming our way.
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Look lads, If this is hurting, I think we should give the guy a break for a while and move onto someone else. Any suggestions?
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How about the NAEA….they ignore all calls to stand up against their largest “online lister” members ridiculing the businesses of their smaller long standing members…….so clearly nothing hurts them!
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How about the £12m valuation of doorsteps.co.uk covered extensively in national media last week?
Very surprised it didn’t seem worthy of mention and open comment on PIE.
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Think we should stop referring to people who use them as sellers.
They’re only sellers if they sell.
They are customers paying to list their property on a few websites.
The difference being unlike customers in other industries if they don’t get the result that they paid for there is diddly squat they can do about it.
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They’re only sellers if they sell applies to any agent I would guess?
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Difference being until the property is sold most agents dont receive a penny
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Thanks Matt, well spotted! Someone ought to pick up on that.
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……now, it ain’t so neat to admit defeat, they can see no reasons, coz there are no reasons, what reason do you need?
((((.01 + 3.39 +18.6 + 46.71)*1m)/1034)*0.88)*279,892= errrr oh! Please sir, how come I don’t get the same answer as you?
Hums another tune quietly to himself; “look at the king, look at the king, the king is in the altogether, the altogether as naked as the day that he was born”
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Was there a bit of boomtown rats there Robert?
Adding poison to the well, for the rats of course!
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Slightly surprised at the lack of suggestions coming from ‘conventional’ agents as to how to fight back. I think one of PBs main weaknesses is their reliance on ‘independent’ reviews (and possibly the way those reviews are invited and moderated). Just compare their own reviews with those on Google – and suggest your potential clients who are considering them to ask ‘Why are you not inviting people to post reviews to Google?’
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How to fight back as a conventional agent? Keep doing what you’re doing – giving a brilliant service pre-sale & post-sale. Improve your service where you can. Collect & publish reviews. Sell for a good but reasonable fee and tell any potential client you’re not just a listing company that sticks it on rightmove/zoopla. No hidden/unexpected extras, no bill till the end and, only then, when you have delivered a result for the client.
Sites such as this will keep the call-centre listers to their boasts of transparency and honesty and we can all do our part by participating. Just this morning Global Radio broadcast the radio advert for purplebricks. I listened to the end expecting somebody talking really quickly (like on the car ads) and pronouncing that you paid a fee whether you sold or not. Nope, it wasn’t there – STILL MISLEADING!
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I came across this new review site the other day.
https://www.aspokesmansaid.com/complaint/55c85e442e12ae0fd81a15bd/paid-for-failure
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Not another invisible reviews site – why would that PB customer choose to write their review there (and not to Google)?
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Because everyone has freedom of choice….
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Same reason you get lots of ‘reviews’ of them on mumsnet. When you see these other places where people write about their experiences with the call-centre lot, they’re rarely positive. Why is that?
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One of Bruce’s aims when setting up the company was “to make estate agents proud to be estate agents … to create the environment for someone to go into a bar and say I’m an estate agent and be proud about it.”
They went about this in a very strange way with their marketing putting down and ridiculing their industry rivals.
I am proud to be an estate agent, but I always tell people I am a “full service agent”…..personally making sure the process goes from starting marketing to completed sale before I get my fee. That, in my humble opinion, is the part to be really proud of!
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There’s a ‘Ratner’ moment just waiting to happen here.
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Bruce claiming: “I think we keep ourselves to ourselves in many ways.” …We wish you would.
…and buying an Aston Martin? …really, that speaks volumes.
Wake us up when you finally make a real profit, not just by cashing in your Aston.
The only “seismic change” I see is Purplebricks relieving Homesellers of an average £1000 upfront regardless of “Sale or NO Sale”!
The “purple elephant” in the room is those “SSTC” figures… they dare not mention how many have actually “SOLD/Exchanged” It’s a business built on Magic Numbers!
Bruce… buy a Fez to go with your Aston… it completes the look!
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Purple Bricks fee is more expensive than any other agent in the UK. You only pay them to put your property on the internet and wait for a buyer to see it, regardless if it sells or not. Its time Bruce was held to account as to why agents who charge slightly more, have to cover High Street presence and associated costs, more employment, pension contributions, licencing and support local retailers with supplies, local advertising and more internet advertising and not forgetting they are available to every customer, internet user of not. If you take that into account and compare PB are horrendously expensive to just advertise and still can’t make a profit?
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