Purplebricks

lol @ dem window frames and the sky above the back fence.

 

Have one house on the street outside using this service to advertise.

IMHO this system might have a few hiccups at first, but in the long run, it could get more and more market share as more and more people get used to selling and just using lawyers to exchange contracts.

There will always be a portion of the market whereby the owner has a home that is reasonably new and in good shape and in a high demand suburb, all they gotta do is just clean the home up nice, get it valued and listed at an attractive price point, couple of opens(just open the door and answer some questions about the house) and it will sell easy.

Especially with an online system where the buyer and seller can just negotiate and come to an agreed price by just a few mouse clicks. Seller could probably run their own "dutch auction" legally if there are many buyers since they are not REAs and aren't bound by industry rules and ethics. There is also potential for more transparency for buyers such as things like buyers being able to see what bids or offers have already been made on the property and are pending consideration or rejected. This could attract many buyers ****** of by REA tactics. Sellers also often know more about their own house than the agents.

Lawyer details can just be exchanged and paperwork done by each party signing at their respective lawyer office anyways. So really only need an REA to do opens if one is not free.

Depending how well they model their software to the needs of buyers and sellers, this could become the UBER of real estate.

I reckon they just need to grow enough to get a "critical mass" amount of listings to become the next RE portal and take business not just from REAs but also realestate.com and domain.com. With such low fees, they must be subsidizing the REAs working for them quite a bit.

 

I recently purchased a property through purple bricks. Mixed feelings about it.

Their online system is terrible. Property was listed on a Saturday and I wanted to inspect as soon as possible. Did not get a response or an opportunity to view until the following Sunday.
The owners were on site so at least it gave me an opportunity to chat with them also. The house was pretty poorly marketed which was great for me (didn't even mention the land size which was 1200m2, or that it was a corner block with side access, no mention of solar 6.2kw system less then 2 years old, no mention of a brand new 5000l water tank). The agents are not local so you really need to know where you are buying, which once again from a buyer's perspective is not too bad but from a vendors I would be concerned if my agent didn't know the area inside and out.

The for sale sign was still up and I had to remove it myself, still sitting out the back, they didn't even put an under offer or sold sticker on it. The property was not changed to under offer on RE, and when someone from purple bricks called me they had no clue it had already gone unconditional, even though settlement was in a few days.

From a sellers perspective they had only great things to say about them but I personally wouldn't use them. I know 2 other local agents that said they could have easily achieved another $25k of the sale price if the property was marketed correctly and if proper open homes were held.

 

They now have like 100 listings in QLD and growing I presume. From point of view of getting some buyers to them in QLD, those annoying ads must be paying off.

We need some good stories from some experienced investor sellers.

 

The PB model doesnt recognise that few homes are purchased because the buyer sees a specific ad and asks to see that property. The other 80% are due to agent initiated effort. The PB ads overlook this and assume buyers just bombard the listing agent for inspections. If it was that easy agents wouldnt be needed at all.

PB vendors are low cost focussed but want the highest sale price. That issue makes very poor negotiation and allowing them to take control of offers can lose sales. Nine out of ten "final offers" are increased with agents.

 

Is that increased final offer worth the agent's commission through?
Is the the real estate market's version of the active vs passive managed fund debate?

 

The issue only illustrates that agents dont accept what people call a final offer. A inexperienced vendor lacks the objectivity and experience in dealing with buyers and knowing when to accept and when not to.

 

Another Purplebricks sale. Sold at auction 29/4/17 50-52 Statham Avenue, North Rocks NSW 2151 - House For Sale - 2013512191

$1.14m - was it cheap?


Maybe... Maybe not

 

I think the market will fragment.
You will have the traditional full service model for high end properties - the free standing houses, etc.
I think that discount models like this will be more common on the lower end - in particular the cookie cutter apartments coming out. There's little to distinguish them from the many other in the large complexes that many are in and if the glut does happen - owners will be trying to cut costs every which way they can if the are under water and have to sell.

 

In the U.K. it is common for the vendors to manage inspections and negotiations themselves even to the extent of buyers knocking on the door if they see a for sale sign.

 

That agent is hopeless, dealt with him a couple times

 

Looks like he works for Raine and Horne Gawler as well?

 

It looks like that wardrobe doesn't have doors. Looks neat and tidy otherwise. I've seen worse.

 

It has been argued that even with "regular" agents they're not too fussed to try and squeeze the maximum out of a buyer. (After a point) This is because the agency gets the main share, and their part of the commission on extra is small, they'd rather finalise a sale fast and move onto the next deal.

 

"If it was that easy agents wouldnt be needed at all." - maybe that's what they're going for?

 

It will be interesting to see what happens.
20 years ago, stockbroking was mostly the old school full service brokers like JB Were, etc and look at the landscape of that now. Now with the rise of index funds, you are getting a similar disruption of the funds management industry.
I don't think the real estate industry will come out unchanged.
These people may not get it right but I think that someone at some stage will.

 

Last three properties I have purchased have been me finding property online and then inspecting.

PB are far from perfect, but they will evolve. The world is a changing place and traditional agents are likely to be impacted if they don't change too.

 

Change is inevitable in all industries - look at Kodak, Nokia & Sony Ericsson's fall from grace when then didn't embrace change.

Agents spruik the size and quality of their databases - is it going to lose relevance? What of their network? It brings in the listings?

Are we comfortable enough to let the call centre do a listing presentation to win our business or a local who knows the it's and outs of the area?

Was it Domain and RE.com that drove the adoption of internet or the owners (newspapers seeking a new source of revenue)?

 

We are looking to sell an IP and initiated conversations with Purple Bricks.
I liked it at first because of the fixed rate pricing and it was easy to book an initial appraisal on line- the whole thing was systematised. The agent came out at the agreed time (although was quite late) and provided an appraisal the following day. I actually got all the way to the point of appointing Purple Bricks (twice) in the system but there seems to be a glitch in the system and they didn't get the notification. The agent then texted me (spelling my name right in the text and then correcting it with the incorrect spelling in a second text) asking me about it- he was quite unhelpful. At this point I started to think about the whole model and how you pay upfront regardless of whether the property sells- where is the incentive for them to even try to sell your property given they already have your money?- and also came to realise that given the relatively low price of the property we are looking to sell (~$400k) that we wouldn't even save that much in commissions.

I think in a booming market where everything sells and for a high price, they potentially have a place but overall, I wasn't impressed.

 

What I love about Purplebricks is the negotiation part. Help some friends and family secure two property in Brissie market couple months back, and they have no deep knowledge about local market.

After securing the property, we organise three different REA local agents to take a look and give us estimate sale price and according. Their estimate sale prices is higher in avg $40k-50k (around 10%).

Even heard stories on the ground that Purplebricks agent is not interested to get higher price as they already got the money.