Purple Bricks vs Traditional Agents
Nobody Expects a Spanish Inquisition.
PB: With PB, you always pay. The minute a seller signs the PurpleBricks sales agreement, they are financially liable for the $2400 - $4400 service & advertising charge. No matter what happens, you owe them. Sell or not sell, you will always have to pay the PB fee.
Traditional Agent: If you property doesn’t sell with traditional agents, the only thing you pay is the advertising fee.
Agent Property Work load:
PB: PB agents get paid far less per listing than the traditional agent. To compensate, they have to run with far more listings (many have 30 or more). As such, their focus is solely on listing as many properties as they are able. The majority of their time is consumed preparing and undertaking property appraisals, with far less time to service existing sellers. Considering most have large service areas encompassing many suburbs, trying to provide full service for 30 properties is a HUGE ask for an agent focusing on a single suburb, let alone the PB agent trying to cover a multitude of scattered suburbs.
Traditional Agent: run with far less listings, often specialising in a particular suburb, giving them time to fully service your home.
Quality of Agents:
PB: Fact: The low pay structure of the Purple Bricks model does not attract quality realtors. However, despite plenty of evidence clearly demonstrating current PB agents performing poorly in previous traditional real estate careers, PB advertises the agents it attracts are of the highest possible calibre. This is simply not the case. I’m not claiming these guys aren’t good people and won’t do their best to sell your home, many seem to be as much a victim of PB spin as the vendors, but successful agents would NEVER join PB as the financial incentives are simply not there. You may notice a few exceptions to the above rule: a few “high flyers” amongst otherwise unknown agents at PB. Rumours have circulated citing substantial bonuses for these agents to join PB in order to promote the brand.
Traditional Agent: The traditional real estate model attracts the industries best performing, and most capable agents.
Agents as Local Area Experts:
PB claim their agents are local area experts. However, PB agents are assigned a large service region, making this claim unlikely and impractical. A number of independent review sites openly discuss how little some PB agents know of their assigned locations.
From a UK article on the subject:
In the case of Purplebricks, there is an ongoing issue of whether their self-described LPEs (Local Property Experts) are classed in law as local or, indeed, as ‘experts’. Purplebricks have since removed this claim (from the UK web) but were only recently advertising for new LPEs’ to join the firm with an immediate start but with “no experience required”
Does this sound like PB are employing highly successful, experienced local agents?
Traditional agent: tend to specialise in one particular suburb with a few surrounding pockets. These are the true Local Property Experts.
PB: It appears PBs are under no obligation to open your home continuously should it fail to sell. From the PB web: “Following the end of the Marketing Period, your Local Real Estate Agent will be available to conduct Private Inspections, and if considered reasonably necessary, additional Open Homes.” This is wobbly talk for “price your home to meet the market, or we will no longer open your home”. Given the high number of listings PB agents need to run with, seller’s home opens will be many weeks apart at best, and will eventually stop all together.
Traditional Agent: often open homes fortnightly (even weekly in hot market).
PB: agents have little direct involvement in the settlement process. The online portal provides document transfer and storage, but the majority of the settlement process must be handled by the sellers and their lawyers. Many complaints exist online regarding the impersonal nature of this aspect of their service model, with many sellers expressing a feeling of abandonment. Additionally, sellers are contracted to use the PB settlement service if the selling fee is not paid at the start of the sales process. If you pay up front you can choose your own settlement service. PB get a 15% referral fee from their recommended settlement service.
Traditional Agent: Walk you through the settlement process and handle everything. Choose whichever settlement agency you wish.
PB: One of the most consistent online complaints regarding PB is agent communication. A buyer must place a request with PB call centre in order to contact the agent. Buyers are never given the agent’s mobile number. Buyers claim calls are never returned, and agents simply never turn up. Others resort to knocking on the seller’s door out of complete frustration. This inability to contact agents directly is seen as a substantial issue for buyers. This is unheard of in the traditional industry.
Traditional Agent: always available. You’ve got their mobile.