Purplebricks quietly hikes its prices as it emphasises commitment to fixed fee model

| Rosalind Renshaw

Purplebricks has quietly put up its prices while underlining its commitment to a fixed fee model. The news was exclusively broken by our own readers in their comments on this site on Friday within hours of the change.

The new pricing on the Purplebricks website includes, as before, VAT, photography, floor plans and listing on Rightmove and Zoopla, with accompanied viewings costing extra.

There had been no announcement beforehand of last Thursday’s hike, which applies both to upfront and deferred payment options. However, there had been speculation of price changes, including the possibility of a ‘no sale, no fee’ option. Purplebricks has now ruled this out.

Customers who have had valuations under the previous price have a month to instruct to benefit from the cheaper cost.

CEO Vic Darvey told EYE: “We have increased our fees by £100 – from £899 to £999 outside of London, and from £1,399 to £1,499 in London and the surrounding areas.

“We will honour the previous price for 30 days for customers who have already had a valuation with us.

“We believe Purplebricks still offers customers a great value way to sell their home and we remain committed to charging a fixed fee, which we believe is a much fairer way to sell your home.”

It is understood that Local Property Experts are being paid an extra £40 per listing but this has not been confirmed by Purplebricks.

Last November, Purplebricks raised its prices from £849 to £899 outside London and from £1,299 to 1,399 in London.

At launch in 2014, Purplebricks charged £599 including VAT, but raised its fees later that year to £665 plus VAT.

Separately, a writer on shares website Motley Fool has cast doubt on Purplebricks’ business model, saying that upfront fees should perhaps not be seen as ‘revenue recognition’ if there is further work to do on the listing – for example, a sale.

Tim Worstall says that Purplebricks’ shares could see a bounce now that fund manager Neil Woodford’s big sell-off – which could have been depressing prices – has finished.

However, says Worstall, he is worried about two “basic things”.

He writes: “Firstly, the essential idea itself. Companies work better when incentives are aligned. Payment by results is the way to motivate salesmen and thus a percentage fee on a sale seems to me the right way to be running an estate agency.

“I think this will become more obvious during the next housing price downturn.

“Secondly, that revenue recognition thing. Because of the past movements in that, what is booked as a profit and when, we don’t really know whether the model even works today.

“There could be a Purplebricks share price bounce as the Woodford fund selling pressure lifts. But I’m willing to bet that there won’t be for more fundamental and underlying reasons. Steer clear.”

On Friday, Purplebricks shares closed down 1.7% at 113p.

https://uk.finance.yahoo.com/news/neil-woodford-only-weight-purplebricks-123515325.html

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35 Comments

  1. GPL
    October 28, 2019 at 06:51

     
    FailingBRICKS    
     
     

    Report
    1. Bless You
      October 28, 2019 at 08:54

      Inflation is killing the model.

      Unless you ‘are’  the platform , tech works for no one.

      #rightmove #facebook #twitter

      Report
  2. agent37
    October 28, 2019 at 06:58

    Hiked, the biased way of saying increased.

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    1. PeeBee
      October 28, 2019 at 09:00

      I disagree, ‘agent37’.

      I would think that calling an increase of over 11% a “hike” is quite reasonable.

      Unlike this particular hike – for a toss-of-a-coin (credit: Anthony Codling) chance of selling your home – which I would personally call ridiculously UNreasonable.

      But that’s opinions for you, innit?

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      1. agent37
        October 28, 2019 at 11:25

        Against the average house price in the UK it’s less than 0.05%. Given that another article today suggests the average fee is currently 1.5%, it’s not so big.

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        1. PeeBee
          October 28, 2019 at 16:41

          “Against the average house price in the UK it’s less than 0.05%.”

          But it’s not “against the average house price”... is it, agent37?

          It’s an upfront, pay anyway, fee.

          It’s money out of the homeowner’s bank account whether or not they sell.

          It’s an extra hundred quid guaranteed to PB – for nothing extra – against nothing guaranteed to the person stumping it up.

          I just love it when you lot start spouting off about ‘average’ this and ‘average’ that.

          Here’s the only ‘averages’ that matter when it comes to the subject:

          On average, 100% of their customers pay.

          On average, a tossed coin comes down on the side you don’t want it to 50% of the time.

          Average.

          Some might say it’s the most generous word in the dictionary when used in the same sentence as ‘Purplebricks’.

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          1. Woodentop
            October 28, 2019 at 17:42

            If its spun, apparently it has an 80% chance of always ending heads down (the heavier side) just like someone’s share price did.

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            1. PeeBee
              October 29, 2019 at 11:53

              Like what you did there, Woodentop!
               
              However, in the spirit of fairness, I just tested the theory.
               
              Using a 1994 D-Day +50 memorial 50p piece (I have a few various coins lined up on my workstation – that one just took my fancy), I flipped it 28 times.
               
              It actually came out 14:14.  Honest.
               
              Up to the point of 14:12, ‘heads-up’ was never the lesser of the two scores.
               
              I may try again later, to see if tossing later in the day gives a different outcome.
               
              Watch this space…

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  3. smile please
    October 28, 2019 at 07:07

    Their prices are comparable with some of the lesser agents round my way and they offer viewings and sales progression.

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    1. AgentQ73
      October 28, 2019 at 07:25

      Think that will be true for large parts of the country, especially if you add in the £300 for viewings and the cost of a premium listing. Not to mention no sale no fee.

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  4. Hillofwad71
    October 28, 2019 at 07:36

    I guess they had to do something  to compensate for the drop in the  number of instructions this financial  year. Perhaps they need to concentrate on  introducing new  revenue streams .Could of course have the opposite effect

     

    Surely it must be worthwhile  offering an inhouse conveyancing service rather than take a cut from partners where the majority of customer complaints arise

    Bricks are appearing very stale ,very short on new ideas

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    1. Woodentop
      October 28, 2019 at 14:28

      Interestingly this move has been done with a month to run up of the next declared business results which could be showing little growth (been forecasted) and new meaning of ““We will honour the previous price for 30 days for customers who have already had a valuation with us”. Or jump in now and make our dismal figures suddenly look good!

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  5. The Future Is Tech
    October 28, 2019 at 08:22

    Under this new leadership team it is all about the money and not about the people.

     

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    1. AgencyInsider
      October 28, 2019 at 08:34

      Bricks was only ever about one thing – making the founders very rich indeed. In that respect Mission Accomplished.

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  6. J1
    October 28, 2019 at 08:32

    Doomed

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  7. GPL
    October 28, 2019 at 10:03

    Do we have a Purplebricks Formal Statement explaining the reason for the 11% hike in their Pay-up-front Property Listing Service? Vic & Co have been happy to spout pr/opinions recently so why not explain the £100 increase, and why cheap seems to be getting more expensive?!

     

    Have they done away with their Viewing Service Add-on? or their “Financial Penalty” when someone chooses not to use a Solicitor approved by Purplebricks? ……or have they changed from Pay-upfront regardless of success or as we often see ……failure! I took an ex Purplebricks property on where that client paid a figure for Purplebricks failure to sell his home – of circa £1800!!! Approaching a year of “commisery” for that client, with no result!

     

    So, we assume in the absence of Vic confirming publicly …..that Purplebricks are either limiting losses, or propping up some perception of profit …..if so, it further undermines their “cheap” business model where they mimic estate agency yet charge for failure.

    I get that there will always be clients who want “cheap”, and that’s fine. However it’s NOT cheap Estate Agency that is being bought, it’s an expensive Property Listing Service that you pay upfront for – Sale or No Sale Purplebricks Customers Pay.

     

    Purplebricks are welcome along with other Onliners to serve those that want a cheap property listing service ……however let’s just be clear, they are light years away from being professional Estate Agents.

     

     

    Until they & their “others” move to “No Sale – No Fee” business model it’s difficult to see what credibility they have, other than the “superficial credibility”  which they have paid millions for through their marketing, to try and fool the consumer.

     

     

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    1. EA123
      October 28, 2019 at 14:02

      “No SaLE NO Fee BuISNess MoDEL MeANS We ArE MoRE CreDIBle”

      Ridiculous statement. Makes you laugh the amount of hate Purplebricks get from “Traditional Estate Agents”

      The worlds moved on you dinosaur. Focus more on being positive and winning business rather than coming on PIE to bash Purplebricks just because they done something for the consumer which saves them thousands of pounds.

      Consumers don’t use Purplebricks because they are cheap. They use Purplebricks because they perform better than you

       

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      1. Woodentop
        October 28, 2019 at 14:54

        EA123 = Deluded.  
         
        “They use Purplebricks because they perform better than you” Does PB perform better? Lets recap FACT; They don’t provide anything like the same service as the high street and they refuse to confirm the number of completitions to instructions speaks volumes.  
         
        Dinosaur, why? because they have been around much longer, do more and offer a better service than PB!  
         
        New age according to you EA123 is: to offer and do less, charge more in realtime comparison (now gone up more), don’t confirm results (it may confirm to people you aren’t that good), blow away £Meggar millions on losses of other peoples money, no real incentive for employees, no incentive to get your customer the best price (a legal requirement) and always charge your customers for failure.

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        1. EA123
          October 28, 2019 at 15:05

          What you say is an assumption. Have you worked as an LPE? Most LPES have been at Senior/Manager Level on the High Street so offer a great service and know what they are doing
          You hate because they disrupted an industry which needed changing for years. Why should a homeowner pay thousands of pounds to sell their property and what do they do that offers less?
          What do high street agents do that is such a better service than what an LPE does?
          They work Monday-Sunday, Phone is on 24/7, Deal with sales, viewings, property adverts, valuations, sales progession, survey access, key handovers & the list goes on.
          They do everything you do but you feel you are above becuase you charge a higher fee and have been office based for years. Do me a favour! You are a dinosaur becuase you dont beliee in change and dont think change is good.
          Estate Agency is one of the least trusted professions because of the lack of transparency involved. Down there with traffic wardens & politicians. Purplebricks came along have changed that and now all “Traditional Agents” hate because the industry has changed. The truth hurts

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          1. AgencyInsider
            October 28, 2019 at 15:15

            Why should a homeowner pay thousands of pounds to sell their property and what do they do that offers less?

            What do Purplebricks do less? How about taking the fee up front and then not selling the property? That’s quite a lot less.

             

            p.s. It’s nearly halloween. Are you the ghost of Ducky or Dom, come back to haunt us?

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            1. EA123
              October 28, 2019 at 15:36

              Great joke Dinosaur.
              My turn. Whats the difference between AgencyInsider and a tampon? They’re both stuck up C.*T*

              Report
              1. smile please
                October 28, 2019 at 16:05

                EA123 showing the class of a PB agent.

                 

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                1. EA123
                  October 28, 2019 at 16:20

                  I’m not a PB agent or associated with PB. Hence most of my comments saying They. I just dont agree with the bashing they take on here. 

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              2. Hillofwad71
                October 28, 2019 at 16:25

                Sounds like an LPE with a couple of chips on each shoulder.  First  “Is Vic there” turning the screw on the customer to lighten their  pockets and no doubt the LPEs are next for a little squeeze too .Especially those first footers who have subdivided their plots like some glorifed “Amway” scheme

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                1. Woodentop
                  October 28, 2019 at 17:50

                  An LPE or not, his ignorance of what estate agency work involves speaks volumes and as usal once a TROLL is exposed with their pants down, shows disgraceful behaviour, something that a high street agent worth their salt never does.  
                   
                  Clearly EA123 you need to get a job in a successful high street office to know what is what before you make wild, inaccurate and idiotic statements.
                   
                  Clearly Rodney needs to understand that High Street charge more as the overheads are more, the service is more and the risk is considerably more.
                   
                  NEWS FLASH. Hang on Rodney…. now that PB have put the price up, they charging the same as high street agents in many parts of the UK. Oh my the truth does hurt EA123. 

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              3. GPL
                October 28, 2019 at 20:38

                Let’s just pause for a nanosecond on your comment below EA123

                EA123
                OCTOBER 28, 2019 AT 15:36#20
                Great joke Dinosaur.My turn. Whats the difference between AgencyInsider and a tampon? They’re both stuck up C.*T*

                 

                 

                Safely assessed on any level as a filthy comment – NO Class, No Manners, NOBODY.

                 

                Shuffle off EA123 and crawl back down the filthy toilet you came from.

                 

                 

                 

                 

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              4. Property Pundit
                October 29, 2019 at 08:29

                Purplebricks threads always bring out the comedians but this one is a bit potty-mouthed.

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  8. brokerofexcellence
    October 28, 2019 at 14:23

    Now they are in this sort of price bracket, where if you add on viewing packs and other optional extras they are very close to smaller independent agents price point in the vast majority of the country, it will be interesting to see what service improvements they will make, if any.

    Before, they were cheap, but clients could accept the poor service as a result. Now, surely at these prices there will be some “service equity” expected in return. otherwise, why wouldn’t average Joe just list with the full service high street agent? Or, is the increased fee some padding ahead of the calendar year end numbers, where they will be able to explain away poor performance to the city by saying “ah yes, but we’ve increased the fee so please give us more of your crowdfunding!”.

    Interesting times……

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    1. Woodentop
      October 28, 2019 at 14:59

      They have succeeded to date because their own adverts say they charge less. That is the fundamnetal foundation of their business model with customers … no longer.
       
      The telephone is going to get hot at the ASA, if they continue with the same adverts.

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  9. Woodentop
    October 28, 2019 at 18:06

    Anyone seen end of todays share price graph from the stock exchange for PB. It looks like a heart monitor screen with a single beat and then just flat lined! I wonder if it was hooked up to Prophet ‘n Loss (credit to PeeBee).

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  10. Knowitall
    October 29, 2019 at 10:17

    At least give me the credit if you’re going to use my comment as news!

    Report
    1. PeeBee
      October 29, 2019 at 11:38

      Knowitall

      You have the distinct personal pleasure of knowing it was you.

      Enjoy the warm, fuzzy feeling of being “it” while it lasts, mon ami – it wears off after a while but the fact remains.

      Report
      1. PeeBee
        October 29, 2019 at 14:15

        And now you have it – immortalised on Tw@tter!
         
        twitter.com/PropIndEye/status/1189182933501825026

        Report
        1. Knowitall
          October 30, 2019 at 09:08

          And I don’t have twitter 🙁

          Report
          1. PeeBee
            October 30, 2019 at 11:57

            You’re not daft there…

            Report
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