Purplebricks’ woes after two BBC programmes this week have been dismissed as a “storm in a thimble”.
Peel Hunt, the company’s broker, said: “We believe the answers provided to the deferred payment question were clear and the savings example has already been rectified. We don’t believe the issues raised will hinder the group’s future progress.”
Purplebricks came under fire on You and Yours, and Watchdog, for still using a claim that it had been told to withdraw, and for allegedly being unclear over the credit arrangement that customers who choose to defer payment enter into.
Last year, the Advertising Standards Authority told Purplebricks that its claim to save vendors £4,158 could not be substantiated.
The claim was withdrawn from over 1,000 places, CEO Michael Bruce told the BBC.
He made it clear that he had not known until Tuesday night that the claim was still being repeated in emails. The template email was removed within an hour and Purplebricks yesterday apologised in a stock market statement for the oversight.
The fact that the £4,158 savings claim was still being repeated after the ban seems unlikely to land Purplebricks in any hot water with the ASA.
A spokesperson told us yesterday: “While we take a dim view on advertisers repeating banned claims, we do accept that sometimes this can happen due to human error.
“Providing the mistake is swiftly resolved, we see no need to take further action in these types of circumstances.”
Analysts are now asking whether what City A M has called Purplebricks’ “eight-month monster rally” in its share price will simply resume.
Yesterday, the shares traded between a low of 415.50p and a high of 472.75p, and finished 17.75p (4%) up on the day at 456p.
Depends on how California Dreaming takes off . As they arrive with pith helmets they have forgotten the natives are particuarly tech savvy .Their model is a bit like teaching Granny to suck eggs
https://www.redfin.com/why-sell
ttps://techcrunch.com/2017/05/25/reali-expands-it-online-real-estate-service-to-the-entire-bay-area-raises-5m-series-a-round/
Interesting barriers to jump on rollout in the USA too
!The service aims to take the hassle out of real estate transactions for both buyers and sellers and also promises buyers a full refund of the standard buyer’s agent commission. Instead of this commission, Reali charges a flat fee of just under $5,000. The seller’s commission is also reduced to 4 percent. Given the markets Reali is active in, those percentages can add up quickly (though in some states, including Oregon, Kansas and Tennessee, these kind of rebates are actually illegal thanks to the tireless work of the local real estate lobbies).”
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Yes, interesting how the Redfin model still results in a selling commission (1.5%) of more than most traditional, full service estate agents charge in the UK.
It caters for the US real estate agency model (listing/selling agent sides to each transaction). I struggle to see how PB’s model can be adapted. Anyone know how it’s going to work there where’s it’s critically important to motivate the Agents with buyers to view listings?
PB’s model ONLY rewards listing agents as far as I can see. Buyers effectively fend for themselves.
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I’ll be paying close attention to the number of UK listings by PurpleBricks to see if the bad publicity does anything to halt the rise in market share.
My proxy suggests there has been a strong start to August in terms of increasing market share with the number of listings fairly constant.
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I have heard that instruction levels are very strong as well, price has held up well, all a storm in a teacup really!
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Could any of the PB fan base on here tell me why if PB are so good and ‘proper’ estate agents as well, why do they insist on payment upon instruction (be it up-front or a Close Brothers loan) and not get paid on results like the vast majority of agents?
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Property Pundit,
You might want to look at it another way.
Why should somebody who sells their property finance all the marketing etc. for those who don’t?
Why should somebody with a £500,000 property pay twice as much as somebody with a £250,000 property?
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Nice distraction technique there cyberduck46 but it doesn’t work with me. Answer the question I posed please.
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The answer was there for you to work out yourself.
It is a fairer for the customer to pay the same for the service whether they sell or not, whether they have a £250,000 house or a £500,000 one.
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Perhaps the person who disliked my post but liked yours might want to answer my very straightforward question. It would be very telling if I was unable to ascertain a definitive and satisfying answer. Big time.
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I’ve answered your question. You just don’t understand the answer.
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Slippery, evasive. I’ve got the perfect job for you.
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I’ve answered your question. Now answer mine:
1) Traditional Agents don’t typically advertise their normal rate of commission.
2) Why do they insist on making those who sell pay for the marketing costs of those that don’t sell.
3) Why do they insist on making those who have higher value properties pay more than those with lower priced properties?
Let’s see who’s slippery and evasive.
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Cyberduck
You’re clearly not daft so why act as though you are.
Firstly, PB are no different to traditional agents in as much as they’re charging people who don’t sell to help fund those that do. If the rumoured numbers are true, about two thirds of unsuccessful vendors are subsiding the minority that do sell. At least with the traditional model, unsuccessful sellers pay nothing.
What really irks me with the online brigade as their brazen deceit into kidding the public that selling is easy “just sign here”. That’s total sharp practice and what they should really be saying is “sign here, give me a grand and then flip a coin as to whether what you’ve paid for actually delivers”.
In the interest of Bruce’s transparency, will they be doing this anytime soon?
Secondly, the fee structure that results in owners of more expensive property paying more is also obvious. The higher the price, the thinner the market so the agent often has to invest more time, money etc to find a buyer.
I’ve just spent £600 on photography on a property (elevated/drone/twilight) along with a £400 specifically targeted social media campaign.
That alone is more than PB’s fee, so please don’t spout this “one size fits all” nonsense.
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Thanks for your input Shaun77, You didn’t mention why Estate Agents don’t typically publish their normal fees.>the agent often has to invest more time, money etc to find a buyer. So you charge based on work done and that’s why you charge nothing to those that don’t sell?The argument that you do twice as much work to sell a £500,000 property over a £250,000 property just doesn’t work.So all in all I think the one fee model with optional extras (e.g. £600 on photography on a property (elevated/drone/twilight)) is fairer and a good business idea.
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Why dont plumbers , builders etc publish their costs??? because every job is different . If every one tried trading on our good service like onliners there would be no money in it for anyone… you are just disruptive because you are trying to be first to the gold rush…. like all gold rushes once the first have been and owned the land the industry dies…
stop trading on fee and start providing a real service….no? ….you cant offer much from your lounge can you…
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Dear cyberduck46
You make an interesting point about people paying more commission on higher priced property.
As a trad agent I will simply say two things
A: it’s as fair as paying higher income tax because you earn more, not going to like the answer but true however
B: If you have a higher priced property you can negotiate with the agent to pay a capped amount, the agent doesn’t like it, true, but it happens,
Also cyberduck46 you have to remember two things about PB
A: They are a volume business offering a flat price for a fixed service
B: If their fixed service isn’t up to the job they won’t be around for much longer. Storm in a thimble ?
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cyberduck46 – the Owen Jones of http://www.propertyindustryeye.com.
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Property Paddy,
So traditional Estate Agents are like a variation of Robbin Hood. Take from the rich and keep for themselves 🙂
>If you have a higher priced property you can negotiate with the agent to pay a capped amount, the agent doesn’t like it, true, but it happens,
Can you show me where this is advertised?
>They are a volume business offering a flat price for a fixed service
That’s right but I would expect PurpleBricks to offer more options over time and even other companies to offer services. Perhaps even an insurance product where you get your fee back if you don’t sell.
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In my experience….. PurpleBricks are simply awful.
That should be their Tag Line……
PurpleBricks…. Simply Awful!
…….sadly it’s not in their small print.
Large Lettering……. SIMPLY AWFUL!
One of my staff bought a house that PurpleBricks were selling…… we submitted a silly/low offer….. Hey Presto! Accepted by PurpleBricks albeit it was a car crash process that barely resembled any kind of recognisable property sales related transaction. Better described as throwing an offer onto a pavement and a random passerby picked it up, muttered yes, threw it back onto the pavement and we waited until another random passerby came along, picked it up and then we staggered along a little further.
If you want to experience what PurpleBricks is like….. in my opinion….. go along to a local Carnival/Circus/Sideshow and at one of the stalls which has the airgun/target thing….. fire away with the wonky airgun and you might just win a cheap toy!
If nothing else someone is going to have a laugh using PurpleBricks in my view….. most likely the buyer!
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