Purplebricks is said to be putting up its prices in October to London customers.
EYE has been told that the charge will rise by £200, to include professional photography.
Currently, the package listing in London is £1,199, compared with £849 in the rest of the UK. Both in London and outside, photography is included in the current packages – taken care of by the Local Property Experts.
In London we are told that the Purplebricks territory owner gets £300, and between £225 and £250 of that goes to the Local Property Expert, with the cut being at the discretion of the territory owner.
From October 1, we understand that the package in London will rise to £1,399 to include professional photos.
We are also told that as well as the £300 commission, an extra £45 will be paid on London completions.
Outside London, we understand there are no plans to launch professional photography yet.
A listings fee of £200 will continue to be paid to the territory owner, of which £150 goes to the LPE.
According to Nestoria yesterday Purplebricks has 1,717 properties in London.
Purplebricks declined to respond.
Their employment model sounds like a glorified pyramid scheme akin to Amway. The fatcat territory owners who were first through the door sitting back and trousering the biggest part of the fee with the expert getting breadcrumbs for all the heavy lifting . These territory owners and further sub-owners in the best spots will be keeping a very tight rein and control .
The poor expert right at the bottom of the food chain pedalling like mad just to get by in some of the duff postcodes servicing layers above each taking their cut
Can’t see this working out in the best interests of vendors and shareholders alike
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Hillofwad71 you are right it is Pyramid selling. Was this not made iilegal?
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Not quite as I understand it hillofwad, on fairly good authority, outside London territory owners get 250 per listing and it is at their discretion how much of that they feed to the lister ( I refuse to call them experts, they’re not ) so get a good TO and you might see 200 of it, a greedy one 125 etc, there are further uplifts for selling viewings packages and kick back from deferred conveyancing, like any business your direct boss influences your experience, self employed my AR$$e
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Main difference of course is that in most estate agency businesses young Smithers at least gets a base salary so he can pay his rent and probably at least he has got a career path and some proper mentoring to tap into.
Just imagine how difficult that must be commission only in certain areas.New recruitment now into peripherals .The bottom feeder relying on the goodwill of Bluto the TO who will be exploiting the situation for all its worth and hanging onto the decent territories for dear life .
No wonder there is huge churn
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Did they not have professional photos before?
It doesn’t cost £200 For professional photos??
PB model cant work long term. In order to keep the so called Property Experts or failed ex agents they have to keep pushing prices up. Before you know it, they would have priced themselves out of the market.
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Agreed, I can’t see PB working long term along with other online agents. There is no added value working with online agents and soon to be no trust, if they keep changing the goal posts. This is why buyers and sellers are coming back to independent estate agents. I do believe the future is bright for traditional estate agents they just need to adapt to technological changes and they can take control again.
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PropertyWebmasters – you say “traditional estate agents can take control again”?
For clarity, High St estate agents still retain the largest share of the property market
Online Only just create an illusion of market share with their TV ads
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GeorgeOrwell – “For clarity, High St estate agents still retain the largest share of the property market” – yes and that’s fantatstic. Im talking from an online perspective. The first place people look now is online… most likely google. Unfortuatley they will be faced with lots of online agents.
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“…and they cant take control again.” Seriously, is there any town or city or postcode where the so-called “onliners” are actually “in control”?
Seriously…anywhere?
I’m not saying that the online estate agent model isn’t a challenge to other more sophisticated approaches such as the “High Street model”. I’m just not aware of an “online agent” being “in control” or even a market leader in any geographical location at all… anywhere.
I understood that the best estimate of market share for “onliners” is still at about 8% across the UK… hardly taking control!
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From the PB KPIs recently published:
The instruction revenue per listing has fallen from £762 to £666 (less than the min. fee of £707.50 plus VAT). This dramatic fall has not really been explained – it may be refunds to unhappy customers.
PB claim they are making more ancillary revenue per instruction (up from £326 to £502 per listing), but they clearly have an underlying problem according to their own KPIs.
The London LPEs must be really struggling as they do not have enough instructions to feed all of them – hence the increases.
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So now we have a LPE – Leading Photography Expert to take over where the LPE – Listing Photography Expert has failed. Got it.
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Dear Dom (and Ducky of course)
You recently stated that there were no verified Purplebricks whistleblowers, with the implication being that the information about Purplebricks I and others are posting is manufactured or invented. Here’s a brave soul in Australia who echoes what has been said before on here and elsewhere.
Link to story bit.ly/PURPAus
“Mr van Straalen spent 13 months as a local territory owner for (PURP) but quit recently after earning less than half the $150,000 to $180,000 a year he was told he would make despite working 80-hour weeks and securing 67 listings”
“Internal reports obtained by the Financial Review showed very few agents were meeting this target with national listing volumes in June less than 30 per cent of a target of 650.”
Adding to his dismay was the issue of Purplebricks share options, which he says he was promised when he signed up but which “never materialised”.
“We were all told we would get share options after six months. But then this changed and they said share options were at the discretion of state directors, and that you also needed a 40 per cent closing rate, which would only ever be achievable if we promised a very high price to vendors to secure their listing,” he told the Financial Review.
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In the interest of bringing some balance to a PB story;
The LPE headcount has been reduced by around 100 to aid with increasing the average LPE income levels. And as a gesture of goodwill to less wealthy investors the share price has been reduced by over 200 points.
PB UK leading the way for AU?
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Hi Room101
So are they down to 500ish LPEs ?
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It positively should have said, reduced by X since peak levels. I’m sure that those that should mind, won’t mind in a whats good for the goose is good for the gander arrangement.
658 LPE showing earlier
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Thanks
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Chris,
>Dear Dom (and Ducky of course)
You recently stated that there were no verified Purplebricks whistleblowers
You are misleading people. I have never said anything remotely like that.
And if you look over on the LSE forum you will see that I posted a link to the very same article at 7:20am this morning.
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I would have thought for PB to actually make any profit on a single listing they would need to charge the same as a high street agent between 1 & 1.5%
Oh Hang on
High street agents do that already and not all are making profit either !!!!
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