Purplebricks is formally launching in the US later today, it announced to the London Stock Exchange this morning.
In line with the region by region roll-out in the UK and Australia, the US launch will start in Los Angeles before extending across California and other key States.
In this morning’s statement, the firm said: “As the 6th largest economy in the world by GDP and the leading US state in terms of both number of annual real estate transactions (442,320, source: California Association of Realtors®) and an estimated commission income of $12bn p.a, California is the natural launching point for US expansion.
“Although California, at 12.6m households has less than half the UK equivalent, the level of commission income in California is more than double that of the UK.
“The diversity and density of the Los Angeles population and broad spread of low to high price properties, will enable us to demonstrate the high quality of service across all demographics and the potential savings that customers can achieve.
“The Purplebricks technology platform and customer offering has undergone a transformation to meet the intricacies of the US market, while staying true to the core customer proposition of value for money and high quality customer service.
“This is delivered through a combination of Local Real Estate Experts (LREEs) and technology.”
The statement acknowledges that the US market is very different from that of the UK, with the use of separate listing and buying agents – although listing agents may also act as buying agents by introducing buyers to their own listings.
It says: “Purplebricks will charge sellers a flat fee of US$3,200 to list their property.
“Sellers will also be responsible for paying a buyer fee on closing. By way of example, using the average LA house price of $560,000, Purplebricks could save sellers as much as $16,400, based on a seller’s commission of 6% and assuming a Purplebricks’ buyers commission of 2.5%. There will also be an option for sellers to defer payment of the listing fee.
“A key attraction of the US market for Purplebricks and a substantial opportunity is the potential to earn buyers commission immediately. From today buyers will be able to go onto the www.purplebricks.com website and view all of the properties for sale in the LA market with all agents on the MLS [multi listing system].
“Buyers will be able to access these properties through our leading technology platform and best in class search functionality, which operates 24/7. Similar to the UK and Australia, buyers will be able to arrange showings, submit offers in real time and negotiate sales on our properties with the click of a button, communicate directly between buyers, buyers’ agents and sellers and, in essence, make deals happen faster.
“For the first time with Purplebricks, buyers will be able to tour properties from the comfort of their living room using 3D virtual reality, through leading provider Matterport.”
Purplebricks says that should this prove successful, Matterport will be used in the UK and Australia.
This morning’s long statement to the stock exchange ends with Purplebricks CEO Michael Bruce saying: “Launching Purplebricks today in the US is the single biggest moment in the company’s three-year history and a proud moment for me personally. It is testament to the quality and dedication of the team that we have achieved this ahead of schedule and expectations.
“We are excited about the opportunity, in this $70bn market, while mindful of the challenges.”
Purplebricks is now in three continents in the space of just over three years.
Bruce said: “We are confident that we are leading irreversible change in the industry and that we are best placed to realise the future global opportunity.”
Two ‘Real Misery’ TV adverts will go out later today, to start wooing the American audience. And they’re very funny.