Purplebricks has launched in the US with advertising aimed at recruiting local property realtors.
The US has so far proved a burial ground for UK agents trying to break into the US market.
But will this prove different?
Let us know what you think.
https://www.youtube.com/watch?v=2D9Bieh6PVY
Comments (18)
I suspect the Americans will treat Purplebricks the same way as they treated the east india company and throw them in to the sea, just like in the history books; Boston Tea party !!!!!
I would suggest that Americans Realtors considering the offer speak to Agents over here first, to hear the other side (the truth) about the operation. Here they have been able to get away with the most spurious and misleading claims and does their advertising imply that there is no cost to selling? Let alone the claim that they are ‘real estate agents’ offering a ‘better service than others’. Does anyone have connections with any USA Realtors? With the fees they earn, they could probably afford to make their own ‘propaganda film and tell a few truths about the set up.
>does their advertising imply that there is no cost to selling?
No. Not to the average person selling a property.
So how much will PB charge either way in the USA ?
The OZ version launched at around 3 times its previous average fee of £900
Does this mean that the US version will launch at 6 times PB’s last quoted average fee of around £1000?
Could that be $7,500 including any taxes?
Presumably, the US version will not wish to use the Multiple-Listing Service (MLS)?
Is that the same as not being able to use RM?
As the yanks charge say 3% for listing and 3% for selling should PB charge say $3, 750 to list and $3,750 to sell as I cannot see them getting away with a full charge whether they sell or not in the USA?$3,750 USA dollars is still more than they charge either way in Australia.Perhaps the UK and OZ offering is proving to be a very expensive pricing experiment?
But that is 135 hours more that it takes to become an estate agent here
That isn’t actually correct; the contractual duties of agency set out by precedent are an onerous barrier to entry. The duty of care and skill alone means someone acting as an agent is taking on the responsibility of knowing what they are doing. I’d estimate at least 1000 practical hours for someone supported by a 10,000 hour veteran, at least 2000 hours for a basic stand alone agent.
I appreciate it’s possible to look up a stab at present value on the internet, thump x 1.2 on smartphone and come up with an asking price, but that isn’t estate agency. Suggesting it is is what the looky likey internet listers rely on for their deceit. “We do what estate agent do but much cheaper” is their sales pitch but scratch through the lacquer to the paintwork and there is a world of difference between internet listing and estate agency.
True but they’re self employed over there. I imagine it’s like Lawyers in Florida, plenty of licensed ones struggling to earn a living. My point being that recruiting Agents might not be the biggest problem with breaking the U.S.
It doesn’t sound hard to become a licensed Realtor in California.
Essentially you have to be 18, do a 135 hour course and take an exam.
I may be wrong, but I am not 100% sure the ‘we’re British and we are going to show you how to do it’ attitude will go down that well in America.
With nearly 500,000 licensed realtors in California, I’m sure they will sign up enough of the less successful to create some brand awareness.
500,000……how many properties sell in California each year?
Notice they put both their UK TV adverts claiming ‘it’s the same as agency but no commission’ in the video…….they are obviously very proud of them……even though many people are led to believe this means the service is free.
It will be interesting to see what they can come up with for the American public and how Redfin will react.
Has Property Eye looked into how it will work there? What numbers are they giving to the realtors that they are looking to sign up?
I lived in the USA for 12 years. Portals over there are controlled by the real estate business. Each realtor is an independent freelance contractor. They share the commission received by their brokerage (i.e. their office) on each closed transaction (whether it’s their listing or buyer – or both) with their broker (their office). Usually, the realtor’s share of the sales commission is the lion’s share (50 to 80% ish). The sales commission charged to the seller is typically 5 to 6%.
Therefore a realtor who closes only 2 deals a month (say 1 side of 2 closed contracts) is making very good money (say $10k/month +) for actually delivering value in terms of results (actual closed transactions!)
Sellers are not used to paying one cent for listing and marketing a home. In fact, each individual realtor is expected to invest significant personal money in marketing the home. On the last property I sold, there, the realtor redecorated the kitchen at her own expense to improve its appeal!
I cannot see how the PB business model (UK version) would appeal to any of the realtors that I’ve ever known. I’d love to know the numbers they are giving them. Rosalind, have you done some digging?
LovePropertyBiz
it would be really good to talk with you about your experiences in America. You may well have some insight that will help the ideas network. If you are happy to, can you contact me on in@agentv.co.uk
If the Trump administration did real estate agency…
VERY impressive video!
Given that realtors are regulated and licensed in the USA, I hope that the regulators and ASA equivalent in the USA will have the balls to do what, in my humble opinion, the portals, ASA, NAEA have failed to do for the UK. Happy to compete on a level playing field but ours is not level.
I cant actualy watch it..i was bought up to be honest . PB have just thrown out the ethics handbook. If they were a not for profits company i would believe it…but,,,they aren’t,,they are simply the lowest of the low.
PB staff need to be careful in America… you charge someone for doing nothing they sort it out with guns..not words.