Purplebricks could “face an uphill struggle” in America, a US realtor has said.
The warning comes from Matt Fetick, who runs successful Keller Williams franchise operations in the USA and is also managing director of Keller Willliams UK.
Fetick said that the American market is attractive, with agents earning record amounts last year.
But, he emphasised, it is a very different market.
He said: “2016 was a landmark year for the American real estate market – more consumers than ever utilised professional realtors, resulting in the highest pay-out of commission in the country’s history.
“As a company, we always welcome competition and support the idea of consumer choice.
“However, we know that the buying and selling of residential real estate is a complex process.
“For example, in the US, licensed realtors are held as fiduciaries in the transaction, so they are personally, legally obligated to assist their clients at the highest level.
“As a result, buyers and sellers require professional services that extend beyond basic online marketing; they require strategy and advice on how to protect their interests.
“There will always be a group of customers who seek price over service, but it is a very small segment.
“On the whole, the US standard of customer service is high, and people are willing to pay for it.
“Limited service and flat fee brokers are not new to the States, and there are many similar products out there.
“To date, and as far as we are aware, we’ve never seen them grow beyond a 1% market share.
“Based on this, we envisage that Purplebricks will face an uphill struggle in a market currently inundated with new technologies and property products.”
Still wonder if they intend to spend all the £50 million raised on America or just dip their toe in the water….too hot….we’ll carry on subsidising our UK operation instead.
Having raised the money for the specific purpose….are they obliged to use it so? Does anyone know?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I think thats a very good point, is it all smoke and mirrors. Having said that, at some point i presume they will have to show their investors what they are spending their money on. Cant wait to see the US TV campaign
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Me too!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
It will get wrapped up in general costs, but will get referred to on the balance sheet and in cash reserves at the bank. I’m sure they will throw alot at it as it is the only way it can work, as the 1 thing that everyone forgets about with the USA, is its sheer size…geographically speaking. TV and radio will have to be poured in. Love the insight from a franchise agent into a call centre agent though! That’s what I call online agents, it has much more impact when discussing their merits or otherwise with potential clients who ask….
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
“There will always be a group of customers who seek price over service, but it is a very small segment.”
Altough I agree Bricks will have their work cut out isnt the US such a big market that they only need a small segment to become a success however limited.?
Back in Blighty Bricks advertising and marketing consultants clearly think that segment is a larger as as it forms the focus of their whole TV advertising campaign . All you need to do is watch the property programmes on TV to become a homespun expert !
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
‘Similar services already exist in US – but have only 1% market share’ – same as here in the UK then.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register