Purplebricks battles it out in Australia as it bids to persuade sellers of the sins of commission

Purplebricks has launched a new PR offensive in Australia, accusing traditional agents of being archaic commission collectors.

However in America, it has ditched its business model and will now charge only when a property sells. The ‘pivot’ was implemented yesterday and brings Purplebricks closer in line with traditional business models.

The campaign in Australia is headed by property expert Barry Du Bois, and while it lacks the wit of the ‘commisery’ adverts, it certainly takes its message straight to the battlefront in what is a very tough market.

The national campaign encourages Australians to question the traditional ‘commission collecting’ model which it says has not changed for 30 years and benefits only agents.

It asks whether agents really deserve to walk away with thousands of dollars by taking a slice of the selling price, as opposed to a fixed fee.

Purplebricks has already had to change its charging model in Australia, so that vendors pay a proportion upfront with the rest of the fixed fee payable on sale.

Neil Tavender, Purplebricks Australia CEO and ex-Rightmove executive, said: “Since launching, we have saved Australians over $50m in commission fees.

“This campaign is about educating Australians about the real estate industry’s archaic business model that only benefits agents.

“We won’t rest until every Australians understands they can sell their home with a fixed fee, get a great result and not fund ‘commission collectors’ lifestyles.

“The market has cooled and as a result Australians are more closely examining every aspect of the sale process.

“The fixed fee proposition is resonating with sellers who want to find different ways to maximise their returns.”

Instructions have been slipping for Purplebricks as the housing market in Australia has toughened.

According to its own website, it had 1,315 listings in October 2017, which climbed to 1,570 last June, but which which yesterday totalled 1,264.

Meanwhile in the US, Inman is reporting that Purplebricks is changing its business model significantly.

Purplebricks will no longer offer a flat fee across America, but charge varying listing fees by region. The publication says it will now only charge if and when a home is successfully sold.

Inman says: “It’s a pivot that brings Purplebricks US closer in line with more traditional models.”

In a statement US Purplebricks CEO Eric Eckardt said: “These changes have been informed by customer and agent feedback and are designed to drive increased market penetration and support continued growth.

“Our customers enjoy even greater peace of mind while still paying well below the national average commission of 5% to 6%  and our agents benefit from more flexibility to build their businesses.”

UK-listed Purplebricks launched in Australia in 2016, and in America in 2017. Yesterday, the share price inched down about 1.3%, to finish at around 161p – a long way down from the height of 511p it hit in August 2017.

Below, how the media is reporting changes to Purplebricks in America, and bottom, the new advertising campaign in Australia

Purplebricks is backtracking on its disruptive brokerage model



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  1. Chris Wood

    “Meanwhile in the US, Inman is reporting that Purplebricks is changing its business model significantly.
    Purplebricks will no longer offer a flat fee across America, but charge varying listing fees by region. The publication says it will now only charge if and when a home is successfully sold.
    Inman says: “It’s a pivot that brings Purplebricks US closer in line with more traditional models.”
    In other words, the business model isn’t working. #purp

    1. GPL


  2. JustPlainSavage04

    I can smell desperation

  3. smile please

    Not working in Australia or America – consolidation of the business about to happen?

  4. JVSOZ

    In Australia, not only are they getting very few appraisals, they’re struggling to sign up new listings.

    I’ve been saying their best move is to pull out urgently, but they won’t.

    It’s not ”academic failure” to them yet.

    Of course, all they need is a calculator.

  5. AgencyInsider

    So they have implemented ‘the pivot’ in the U.S. (‘The pivot’, it follows ‘The shaft’) and in doing so have become just another realty company among the many. Night night America. Oz will follow shortly.


  6. Thomas Flowers

    So if eye-watering conveyancing referral fees are band what will happen to their UK model?

    Do regulators here now have to consider a plan so as to prevent 10,000s of their users from ever losing their money in the future as highlighted by the insolvency of emoov – Mark 1?

    How about insisting that all agents must offer No sale, No fee, once more,  to prevent users from losing £1,000 plus on average or is that too ‘archaic’ in this disruptive world we now live in?

    After all, it did prevent many people from paying two estate agency fees for 30 odd years!



    1. Chris Wood


      It’s a serious point. No company can guarantee a service in perpetuity as I outlined when emoov collapsed in this article.

      1. Thomas Flowers

        Good article Chris.

        Let us do the maths on PB’s exposure:

        PB currently have a cash reserve of say £100 million but are currently losing £1 million per week ie a likely rounded £50 million loss in 2019 alone?

        They listed 64,000 properties in the UK last year and for the sake of argument let us say they list 64,000 in 2019 = 128,000 listings divided by 50% completion rate = 64,000 properties exposed to their perpetuity promise?

        Say they have on average 30,000 for sale listings at any given period.

        So 30,000  listings x average fee of £1,300 = £39,000,000 lost fees if they ran out of cash and became insolvent as emoov did.

        PLUS the financial and perpetuity loss to 10,000s of users who have and will pay for a service which included this PB statement ‘If you don’t sell within 10 months we’ll continue to market your property until it does without asking you for more money.’

        Think they are going to need another £100 million soon if they are bothered or have to cover any such scenario?

        Warning: Fees payable regardless of sale, insolvency or whether you have any viewings!









        1. Thomas Flowers

          O dear PB:

          Clampdown on referral fees: new Trading Standards guidance to be issued

          ‘home buyers should not choose their conveyancers by default, and that this initiative by NTSEAT should bring “excessive” referral fees to an end. “I’m concerned about the current lack of transparency” she told delegates.’

  7. Property Poke In The Eye

    It’s not looking good for them when you have different models in different countries.

    Not too long before funds are depleted.  But hey who cares its not their money they are gambling with.

  8. J1

    Just horrid !!

    First rule of credibility is don’t slag off the competition !!

    Then again I did use the word credibility!!

    Be positive out there ladies and gentlemen.

  9. Robert May

    There’s  a few things thing I learned about Ozzies from  working for and with some for a good number of years.

    First off is they are smart! They are resourceful, they are incredibly competitive and determined and they are very well organised. It is probably the  make up of a diverse population who or whose preceding generations were prepared to  get up and have a go in another land far away from home that makes them that way.  Australians will teach you something long before you’ve earned their respect.

    To this story I will say one thing, good luck!

  10. Woodentop

    So after all this time they are admitting they can’t get it right. So lets be unprofessional and not sell our own services to our customer but slag off our competitors instead which is and always has been their sole strategy. Poor leadership, Poor sales ability, Poor ethics, Poor business operations, Poor results, Poor returns for investors  … the whole thing about PB is Poor, they can’t run their business standing on their own feet. The public are starting to get wise to the constant barrage of what they think of the high street but social media is getting though that they are worse.  
    After 7 years they still haven’t taken over the market in the UK, continue to lose megga £millions without a single penny in profit and refuse to disclose how successful they really are at selling customers homes.

  11. Richard Copus

    Just back from Ozzie and the market is not good.  Residential prices forecast to drop between 8% and 10% in NSW and similar in Victoria.  The last few months’ results has evidenced the forecast trend.  It will be interesting to see how PB fare against the savvy local agents.

  12. AgentQ73

    Not sure how long it takes the USA from listing to getting paid but unless they have come up with some creative finance/loan/facility agreement that is going to put a whole in their P + L.

    Wonder how the LPEs feel about it or if they are getting subsidized i for the revenue gap ?

  13. Hillofwad71

    New York seems to be proving a tough nut to crack for Bricks .This has probably prompted the U-turn in their business model, Beginning of the end of their American Dream ?

    A quick romp thru “RECENT SALES”of their realtors shows very few of them able to pay the rent .Just a few seem to have a few sales Must be very disappointing but not entirely unexpected



    In a chat with Bricks this morning -this was their lame excuse!!  LEGISLATIONS !!!!

    Customer] Sorry, read this morning in the USA its now not pay upfront so assuming that is the case in UK?
    [Eliza] Ah okay! USA works differently to UK. I mean are you looking to sell your property that is in USA or UK?
    [Customer] UK.. Well it hasn’t been working differentally til now! 
    [Customer] Why the change there and not here?
    [Eliza] All of the legislations in US is different. I would advise for you to speak to them directly and you can email them on inquiries@purplebricks.com
    [Customer] Well let me know if you adopt the same model here!



    1. jackobabe70

      Agents have to update Zillow themselves, so may not be an accurate representation of past sales in fairness.

  14. Scottish_Mist42

    Sums it up






  15. jackobabe70

    Aren’t people sick of talking about Purplebricks yet?? The other stories barely get a comment.

    1. Property Pundit


    2. Woodentop

      Certainly not. It cheers everybody up.

  16. Anthonyw

    Hi jackobabe,

    In answer to your question, I think the articles that get the most comments are those that are closest to the problems faced by the posters. If you do something good or right no one really talks about it, do something bad or wrong and the word is spread like wildfire and it fires people up to respond. So at the moment agents are concerned about online models taking business away and also the fees charged by portals – those two things always generate responses and very raw feelings/emotions.

    I personally don’t have a problem with PB as think there is space for all of us and we can learn from each other to improve. It is funny, I was talking to a friend of a family member over the weekend. They were telling me that they had put an offer in on a property selling through Yopa (on south coast so not our area). They were telling me because they said the experience was dreadful. Basically the sellers were a young couple who bought the property 2 years before, they were selling up to go travelling and then settling in Europe. They used Yopa because it was cheap. On both sides they have had a nightmare experience. Firstly, the buyers put in an offer through their yopa online system but Yopa rep just ignored them. The buyer and seller then as a last resort communicated via whatsapp. The only yopa assistance they got was some call centre who not only new nothing about the property but had no idea where the location was. This is just this couple’s experience and sure not everyone who uses yopa.

    The cash buyers pulled out because there was no negotiation on their offer and they thought it was rejected. 3 months later the seller contacted the buyer direct saying they where just about to list their property with a local high street agent but wanted to check if they were still interested. Anyway, thankfully they worked out a deal between them and the seller dropped the new agency. They had paid Yopa so that money was gone.

    They both tried to initiate the process with yopa rep again as their agency (people are still expecting traditional agency service here which I think is a crucial insight!)  – no response, so they are trying to move the sale through now by themselves, dealing with solicitors etc. They are doing it all through whatsapp and email and phone.

    I asked the buyer if they provided feedback on yopa service. Their response “No, I wouldn’t even know where i would do that, but I am just glad the whole episode is nearly over” they said it had been very stressful.

    I asked if they would sell their property through a yopo style agency in the future. NO they said, it was a dreadful experience as a buyer and they couldn’t  go through that as a seller. I know yopa are not pb but it could easily be.

    Online models need work just as much as traditional does. I think eventually we will all be offering both but a better service. I think we need to be watching and learning.

    The key thing I took away from this conversation was that contrary to what we think, the public still expect high street services with these online models i.e. the hand holding, the keeping people in the loop, negotiating etc. etc.

    1. Woodentop

      When you mention  call centres the public immediately step back, it was a dirty word for poor service decades ago and even had a TV satire make a right joke of all things wrong with these type of operations. Still conjours up the same feeling today with the public and hated by any company that has to deal with them and that phone response … “please select from option 1 ot 4, now option 1 to 4 again, now option 1 to 5 or just hold for the next available rep … and your number 99 in the waiting list …” and here is some awfull music to keep you occupied. Bring forward today and these on-liners are using a call centre under the disguise of LPE who from their PR machines would have us believe wouldn’t have the time to take a viewing, let alone chase a sale in their busey workload of listings.  
      the public still expect high street services with these online models i.e. the hand holding, the keeping people in the loop, negotiating etc. etc.  
      That is core high street estate agency.

    2. PeeBee


      “So at the moment agents are concerned about online models taking business away…”

      Sorry – but you’re pretty off-piste with that comment.

      The concerns of the most prolific posters on here – me included – have nothing whatsoever to do with whether online model Agents “take business away” or not.  They can have the business… IF they win it fairly, and THEN they perform.

      Seems to me that you need to read back a long way, both here and down t’other pub, to inform yourself of the true concerns and issues.

      1. Anthonyw

        Hi PeeBee,

        point taken – maybe wrong choice of words/lack of understanding/history on here? I am a new reader of pie and all I have seen since I started reading the articles on here is that every time PB or another online agent is in the news it fires people up and my assumption is it does that because of the fear of losing business to cheaper online models. Maybe you can bring me/us up to speed as to what the real issues are? I have only read current stuff as don’t have time yet to go through historical. Maybe one day…

  17. Cheesybiscuits

    I’ve seen a massive fall in the amount of PB’s boards recently. Perhaps word is finally getting around that they really are just property listers.

    1. Woodentop

      Companies that charge upfront with no refund, have no incentive to sell the property at the end of the day or get the best possible sale price (if so, breach of Estate Agency Act and TPO code of conduct). Just keep rolling out PR to suck in more lemmings.


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