Former Territory Owners have days to decide on new five-year agreements to become LPEs

Former Territory Owners have been given days in which to accept an offer to enter a new five-year agreement with Purplebricks as  Local Property Experts.

According to a letter we have seen which was written to one former Territory Owner, they are being offered a sum understood to be around £4,000 to “facilitate” their entry into a new agreement “in exchange” for their agreement to “this variation of terms” and early termination of the existing agreement on February 21.

The offer is on the table until this time next week, February 19.

Those who agree are being told to accept in writing by the 21st when they will be released from the existing agreement and receive “the payment promptly”.

For those who “choose not to accept, we will consider which other options are available to use under the [existing] Agreement”, says the letter

The choices are given in the letter from CEO Vic Darvey, which also suggests that the business has had to consider a changing “legal and regulatory environment”.

Its recent shake-up includes the reduction of 100 Territory Owners to 43, and the stripping out of a tier of management, that of Regional Directors. Purplebricks has said it hopes to deploy most of the Territory Owners who no longer have a territory.

In the letter, where he repeats the goal of a 10% share of the UK market, Darvey says that Purplebricks has so far been “remarkably successful” in working with its network of LPEs. Darvey repeats Purplebricks’ goal of a 10% share of the UK market.

The letter adds that  there has been a review of the UK operating model “to ensure that it remains best in class and sets up both Purplebricks and its network of LPEs for sustainable future growth”.

Darvey’s letter goes on: “In undertaking this review, we have had to consider the developing legal and regulatory environment for Purplebricks and our network of LPEs to ensure that our businesses remain viable as the estate agency sector, and our model, both face greater scrutiny.

“I am pleased to inform you that we have now completed the review and have a plan that will achieve our aims, and that we would like to facilitate your entry into a new 5 year Local Property Expert agreement with a Territory Owner.

“As part of the review we assessed the performance of all our our territory owners (including your business) and notwithstanding the various termination rights we have available under the Agreement we would like to offer the amount . . . to facilitate your entry into a Local Property Expert agreement operating  under a Territory Operator appointed by us in consideration for your agreement to this variation to the terms and early termination of the Agreement on 21st February 2020.”

In the draft contract for LPEs there is a checklist of duties, together with timeframes where applicable and targets.

These include LPEs having to ensure availability seven days a week, including outside normal working hours. They are expected to convert valuations to instructions at a minimum measure of 45% in Scotland, 40% in Ireland, 35% in London, and in the rest of the UK at 40%.

We have been told that a number of Purplebricks ex-Territory Owners are thinking of not accepting the new terms, citing reduced remuneration – of some £24,000 a year, according to a couple. One also expressed concern about the ‘open all hours’ clause on availability that LPEs must agree to.

Last night a Purplebricks spokesperson said: “Our model gives Local Property Experts the freedom to organise their diary in a way that suits them.

“Although they may sometimes help customers outside normal working hours, they can work flexibly, manage their own time and don’t have to be in an office every day.”

There was no other comment.

Podcasts
x

Email the story to a friend

53 Comments

  1. HonestJohn

    57 TO’s all getting a £4K “payoff” – well there’s another £230K gone. Bravo Vic, bravo!

    Report
  2. GPL

     
    Firefighting Vic?
     
    Days to decide? What’s the hurry Vic ……
     
    HMRC knocking on your door about business structure or shareholder pressure or alarming rate of cash burn……
     
    Whatever is going on Vic you’re not being transparent with your own people.
     
    Not even your own people can trust you …….never mind the consumer.    
     
     

    Report
  3. purplepatchy

    PB have got 11% share of our local market… can’t wait to watch them crash and burn. No matter how good a salesman you are, their marketing is so misleading and penetrating that by the time we’re in front of a customer it’s simply too late and they’re convinced this sham of an outfit will do the EXACT same job as you for a third / quarter of the price. Then they use them, then they’re awful, then they vow never to use them again but by this point it’s too late. And the cycle repeats itself again and again.

    A drain on our local market, scourge to our potential customers who then go on to buy through us… they can’t implode soon enough as far as I’m concerned.

    Report
    1. Agent G

      Absolute nonsense, PB sell more properties than any other agent. I’m sure all traditional agents sell every property in an hour don’t they, that’s why it’s worth paying 4 times as much.

      Report
      1. J1

        Sarcasm so early in the day?
        I think you’ll find that Rightmove sell Purple Properties – it’s all they’ve got …………

        Report
        1. Agent G

          So what do the traditional agents do other than putting it Rightmove? Please don’t say the shop window 

          Report
          1. Estate_Agent_Memes

            @Agent G – erm… proper agents only get paid when the property is sold. They progress the sale through to completion, they don’t make their clients pay hundreds more if they use their recommended solicitors, proper agents don’t charge £360 to carry out viewings that may not even happen – need anymore?

            Report
            1. El Burro

              Plus they have to sell property (hence the term negotiator) to waiting buyers not just wait for someone to come to them (which isn’t a problem when you’ve already trousered the sellers money) and get the best price for their client.

              Report
            2. Agent G

              Progress the sale ha ha amazing! It’s £300 for viewings, don’t forget they’re paying another agent thousands more so price shouldn’t come into this should it? They don’t pay anymore to use PB solicitors

              Report
              1. Jon

                Agent G – Sellers might not pay to use PB lawyers, but they do pay, £360, if they want to use their own lawyers!!!!  How can anyone justify this amount for exercising freedom of choice?  Maybe you will enlighten us………

                Report
              2. Estate_Agent_Memes

                @Agent G – you have no idea what you are on about – if the seller decides to the deferred fee option they HAVE to use PB lawyers at a huge expense to them!

                Report
                1. Agent G

                  Huge expense? Probablya couple more hundred pounds than it would locally. Don’t forget they probablysaved about 3 grand on fees so not a bad deal that is it?

                  Report
                  1. Jon

                    C’mon Agent G – give us a response – just above Estate Agent memes – you know you can’t but at least try!!!!

                    Report
          2. Property Pundit

            New here aren’t you?

            Report
            1. Woodentop

              An LPE.

              Report
              1. HonestJohn

                Aka a former TO

                Report
          3. surrey1

            Call a database of suitable buyers having properly vetted their requirements and budget? Just an idea.

            Report
        2. DG

          Oh dear, if you have to ask that question you’re obviously not a real agent.

          Report
          1. Agent G

            Believe me I am, I’ve seen both sides of this 

            Report
            1. purplepatchy

              – 3 negs calling out total 10 hours a day

              – professional photography

              – daily sales progression

              – local solicitors

              – qualified bank of applicants

              – relationships with local developers and investors

              – accompanied viewings by an actual sales negotiator

               

              vs

               

              a bloke in a car, a call centre, £900 fee + £1,000,000,000,000 worth of marketing.

              Our conversion rate is 84% listing to completion… remind me of PB’s again?

               

              Report
              1. Agent G

                All I see from this is,

                negs – waste of time and money

                sols – do they need to be local these days?

                Not that many have professionalphotographers in my area, they’re quite poor really

                 

                I have the relationships with investors etc

                viewing by me, the guy that valued the house, not Lisa who likes to negotiate

                bloke in the car is quite a personal service isn’t it rather than a busy office

                our region is currently selling at 110%

                Report
                1. Property Pundit

                  You forgot to mention you work out of your back bedroom rather than a busy office.

                  Report
  4. AgencyInsider

    I hope we hear today from a former TO what they think of this. Taking it, or leaving it?

    Report
  5. smile please

    Hardly sounds like a self employed contract, sounds like slave labour.

    Why would any individual work under those conditions?

    Report
  6. The Future Is Tech

    What about the territory owners who have grown the business and in debt by paying extortionate recruitment fees and hotel costs? There doesn’t seem to be an reimbursement of this?

    Also, some territory owners have been offered a 3 month commission due sum to leave and not be an LPE.

    What about the territory owners who have been off the road and not valued a house in a few years? You expect to dump them under an incompetent new territory operator who has no idea on how to run a business. They must be feeling really sick about this right now.

    Report
  7. Blondage

    1 person converting over 40% & keeping up back office service (basically running a branch) 7 days a week. Never been sustainable.

    LPE’s drop off at an alarming rate, they’ve just saved on recruiting short term.

    Although this is karma for the TO’s who wouldn’t last a day in an employed contract due to their misconduct & lack of experience.

    Report
  8. htsnom79

    Seriously, what competent agent with even a modicum of self respect wouldn’t do a Pelosi on receipt of that?

    Report
  9. Fawkes

    All of the obvious things aside, I think it speaks volumes of the culture and strategy at PB when a business that is, one assumes, at its core, set up to sell and let property, is happy with a 35% valuation to instruction conversation rate, but demands a 100% conversion rate on both legal and financial services referrals.

    Report
    1. AgentQ73

      I may have missed it but I cant see any targets for instructions to completions ? Think that tells a lot. 
      Will be taking this with me next time I go up against PB

      Report
      1. The Future Is Tech

        They have been told to list list list at any cost

        Report
        1. surrey1

          Just been on a valuation this week. Started listing at over £700k on PB LPE advice. Two years ago. Now on at £550k. Perfectly straightforward house, no notable change in market conditions. Cost the bloke a grand for nada, probably cost him more as the house is now stale as they come.

          Report
          1. AgencyInsider

            Those who list with cut price outfits, fail to sell, and then come to a full service, no sale-no fee agency should be charged double – because it will likely take longer and a lot more effort and advertising to shift the ‘damaged goods’.

            Report
            1. Property Pundit

              Good point.

              Report
  10. AgentQ73

    If i were an LPE I would be asking myself where and whose patches the TOs who are being demoted are going to take ?

    Report
  11. Hillofwad71

    45% conversion rate from appointment to instruction in Scotland ? They must be thinking they are home and hosed there  for supporting the Scottish rugby team

    That sounds like a big ask. Who in their  right mind would sign up to such an onerous condition. I guess if Bricks are looking to oust an incumbent all they need to do is become agents provacateur and make up some bogus  valuation appointments  to break the condition

    Report
    1. Tyrion Lannister

      I guess if Bricks are looking to oust an incumbent all they need to do is become agents provacateur and make up some bogus  valuation appointments  to break the condition

       

      No need – the ‘quality’ of ‘leads’ from head office will take care of that in itself…………

      Report
  12. Londonbound

    “As part of the review we assessed the performance of all our our territory owners (including your business) and notwithstanding the various termination rights we have available under the Agreement…”
    Veiled threats, typical for PB.
    This business is slave labour. Nothing more. Wake up TO, LBP, and LPEs you’re being used and abused.

    Report
  13. J1

    Doomed

    Definition: A company that turns on its workforce and treats them like a commodity……..

    Report
  14. MortgageStu19

    Vic Darvey AKA Noel Edmonds …. Deal or No Deal….! Being offered £4000, to sign up for 5 years of 7 days a week, when losing £24k a year, is like being offered the penny when the £50k, £100k & £250k prize is still available (so maybe Vic is the banker?!) most of these TO’s were successful agents, offering a great service, before joining Purplebricks – know your worth and take your skills elsewhere

    Report
  15. PaulC

    All LPEs need a tattoo on their heads that reads “Mug”

    The working hours expected for the renumeration is a joke.

    The impact on their health and lifestyle cannot be underestimated.

    PB have built their business on the back of these TOs and existing LPEs now the numbers are not stacking they are reshuffling the deck.

     

     

    Report
  16. Knowitall

    So some more truths: Some territory owners have been offered more along the lines of 4k a postcode…
     
    If telling someone when they have to work isn’t a breach of IR35 then what is??? I mean that is clearly not self employed.
     
    Many T.Os will take the option while searching for something more suited. They have to do this out of need not want. I can assure you most will leave and when they do it will be payday leaving a trail of destruction behind… rightly so (yes unfortunate to the customer)
     
    Most good LPE’s refer their mortgage leads elsewhere for the customer to have a better service then a call centre look after the most important finacial transaction of their lives! 
     
    If you are losing anything to PB at current with the changes, staff retention, negative press and upfront fee with plenty of clauses then I suggest you start looking at another career…..  

    Report
  17. GPL

    ” follow the Purplebricks road “ …..to nowhere.

    It’s like watching a form of “Reverse Engineering” where Purplebricks started by shouting “We’re just like estate agents, but cheaper” ….however, they were just cheap but NOT like estate agents.

    Now they are throwing random component parts into a bowl, mixed in with a design that they think resembles successful estate agency …….all in the hope that popping out of the other end is an actual estate agency.

     

    It’s been a sham from the outset, and what we see unfolding now just confirms that it is a House of Purple Cards.

    When your employer can’t be trusted, it’s all over.

     

     

    Report
  18. Woodentop

    Sign of desperation … Confirms that PB business model was never working and needs to do something fast. When you have to do things fast, it is a sign of impending doom. Treating your staff unfairly makes the end in sight arrive faster and inevitable. There are only so many lemmings in this world and once the word gets around they stop jumping over the cliff.

     

    LPE’s/TO, investors and the Public are getting wiser. PB can no longer claim to be ‘new idea’. They have demonstrated for years and the words is out as to what they really mean to these people and isn’t a five star rating.

    Report
  19. Andrew Stanton Proptech Real Estate Strategist

    The term – Legal Referral on the form that has caught my eye.

    So is the model, pay now, and have a choice if you use financial and conveyancing services?

    But if you go for the 10 month pay later option – your consumer right to choose which conveyancer you want is stripped away, it is PB’s conveyancing or no loan?

    Also, the loan is actually monetised within 24-hours by Browns who pay Purplebricks, so really you are in debt to a third party, nice work if you can get it. Do not pay now, Purplebricks gets paid anyway, and down the road if you do not pay it will be a complete stranger with hobnail boots at the door.

    This to me is reducing the rights of the consumer – anyone have further insight?

    Also yes, the solicitor at the national trading standards estate agency team NTSEAT in Powys said some time ago that LPE’s were probably employees, so maybe HMRC are about to spring into action.

    Lots of holiday money, and contributions from Purplebricks if that comes on top, and tax possibly owed from its self employed LPE’s from all of its worldwide  forays. Things are clouding up for the Olympic hopefuls – maybe rain is forecast for the opening ceremony.

     

     

    Report
  20. Knowitall

    Recruitment should be fun going forward for them….

    The internal recruiter that takes that on needs a 6 figure salary!

    Their head of recruitment is incompetent too so its really just not looking bright.

     

    Maybe the Bruce brothers buy it back at this rate!

    Report
  21. JimCricket

    So you go to work for a company albeit under the guise of self employment and you are locked into a contract where you are guaranteed to be paid a fraction of what you are worth if the job is done properly with zero benefits of being employed. Why would anyone want to do this? It must be the most unsatisfying job in the business?

    Report
    1. Knowitall

      but but you get to work from home…..

      Report
      1. GPL

        ……..but ……..you’ll be working 7 Days a week

         

        Notify Home Insurer re using part of home for business. Car Insurance, business use obviously (transporting viewers? extra liability). Mortgage Lender – part use of home for business? ……and the list goes on?

         

        So, they’re employed but not employees, they have a contract yet not a full employee contract, their “contract” can be forcibly changed at short notice…..

         

        The list of “benefits?” that must be in their Vacancy Adverts …..and people still say Yes?

         

        As an LPE? if you value nothing else? ……value yourself! TO’s – you just keep quiet and hope they don’t realise that you are just skimming the cream.

         

        Report
  22. let4more

    This may throw a further spanner in the works

    https://inews.co.uk/inews-lifestyle/money/ir35-changes-explained-hmrc-tax-rules-2020-self-employed-1386468

    Report
  23. GPL

    ……..and the 2 LPE’s that have by far exceeded their own expectations?

     

    Ladies & Gentlemen ……. be upstanding and show your appreciation for MR’s Michael & Kenny BRUCE.

     

    You can usually hear them nearby just by the tune they are whisting (The Great Escape theme tune!).

     

    You just have to polish the “t*rd” long enough until you can sell it to someone else.

     

    Report
  24. Knowitall

    Joining Purplebricks as an agent right now is the equivalent of taking a holiday to Wuhan, China.

    Report
  25. agent37

    I hate to disappoint but the huge word DRAFT may be a clue that this isn’t actually the agreement…

    Report
  26. Paul

    Reading between the lines they are terminating legacy contracts in order to insulate themselves from ir35. They will determine that the territory operator is a company, operating in its own right, with ability to appoint substitutes (lbps) and match many of the other criteria for being outside ir35, and actually the territory operator will then be outside ir35. But all the lbps will be inside ir35 under the territory operator. The territory operator therefore will burden the kick in the **** from hmrc and the administrative burden of deducting paye and financial burden of paying nic employers contributions on behalf of the lbps, their employees. Genius way to comply with a changing regulatory framework that they have been flouting for 5 years.

    Report
X

You must be logged in to report this comment!

Leave a reply

If you want to create a user account so you can log in, click here

More top news stories

Conveyancing market ‘nose-dived’ in final quarter of last year as transactions dwindled

Continue Reading ...

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.