Purplebricks has allegedly run a competition in Australia where its local agents were incentivised to pressure sellers into cutting their asking prices by between 5% and 20%.
The agents, in New South Wales, had to secure reductions on three properties in order for their names to go into the NSW Raffle, which offered a $500 prize “generously supported by Kenny Bruce”.
Any further reduced properties secured the agent another raffle ticket.
The claims are in the Australian Financial Review, which says that an email it has seen described the promotion as an “awesome opportunity to get our customers’ homes realigned with the market place and make sure we get the job done for them”.
The publication reports also seeing a spreadsheet showing how one vendor agreed to cut their asking price from $1.2m to $1m.
Altogether, over 100 vendors cut their asking prices.
The Australian Financial Review says that Purplebricks “battled an increasing number of unsold homes and angry vendors who paid between $5,500 and $7,000 upfront”.
It also quotes a former territory owner who said: “We were told that they wanted to clear residual stock ahead of Kenny Bruce coming here and bringing in a new way of working.”
Bruce, co-founder of Purplebricks along with brother Michael, is in Australia following the departure of its sales director.
The Australian Financial Review alleges that it was threatened with an injunction to prevent publication of the vendor-discounting competition.
However, COO Neil Tavender later said: “[It is] entirely normal for any professional real estate agency to incentivise and reward their people to achieve realistic sale prices in a fast moving and ever-changing real estate market.
“At Purplebricks, we constantly assess market conditions and continuously review every house on its merits. The seller is involved and engaged in these conversations and ultimately it is their decision.
“More broadly, what’s clear is that we have a small group of disgruntled former agents looking to sensationalise and paint the company in a negative light at any opportunity.
“This minority has a clear agenda and are using the media as a vehicle to publicise their views, but we will not let this distract us from offering Australians a cost-effective way to sell their homes that cuts out commissions that are in place to benefit traditional agents, not sellers.”
EYE did approach Purplebricks for comment on the claims in the story.