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Purplebricks boss says traditional agents have charged too much for too long, for too little

Purplebricks boss Michael Bruce has said that traditional estate agents “have been able to charge people too much for too long for too little”.

In an interview with the Mail on Sunday, Bruce said as a result agent were not incentivised to go out and create technology that would drive down their fees by 70%.

Bruce, who told the paper that Purplebricks is making a sale every 16 minutes, said that customers could save between 50% and 70% using his firm, depending on whereabouts they are in the UK.

He said: “It’s a considerable saving but at the same time they get a much better service. We’ve got over 10,000 rated excellent reviews, and try finding an estate agent anywhere in the world that gets positive reviews. They’re very difficult to find.”

Bruce also criticised the estate agency model which “requires the leads of estate agents to send their troops out to get a property on at all costs, tie a customer into 12 to 16 week agreements, spend the next 12 to 16 weeks chipping them on price.

“If they chip on price they sell, if they don’t they churn in the market. That’s why 60% of houses sold in this country sell with a second or third agent”.

Bruce said that people do not want a totally technology-driven service, but one where someone can advise them. He said the first Local Property Experts hired by Purplebricks “must have been mad” because they had to sign non-disclosure agreements, and were not shown the technology: “We just told them about our dream and how we were going to achieve it,” Bruce told the Mail. “What surprised me is how many people believed in the same dream.”

Purplebricks enjoyed a good day on the stock market on Friday, with its shares finishing at 151.75p, up 7.75% on the day.

The firm also announced that two members of staff last week exercised options to subscribe to options in a total of 600,000 ordinary shares at 0.01p each. Director of marketing James Kydd has been granted 500,000 options and chief technology officer David Kavanagh has been granted 100,000 options under the employee share option plan.

11 Comments

  1. AgentV

    ‘Making a sale every 16 minutes’ and ‘they get a much better service’

    So where are the numbers of completed sales Mr Bruce? And why are you dropping review sites and reviews that aren’t so favourable?

    See #CONmisery invented by PeeBee

    this is a joke to court publicity and keep raising the share price!

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      1. AgentV

        It’s says he has become a multi – millionaire out Purple Bricks though!!!

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  2. Hillofwad71

    A sale every 16 minutes . Not in Aberystwyth!.Admittedly not a fair example to use as a yardstick,I freely admit -a small university town in a sparsely populated area but interesting nevertheless

    https://www.purplebricks.com/search?ref=header#?q&location=Aberystwyth&page=1&latitude=52.41501008087895&longitude=-4.083684025761486&searchType=ForSale&sortBy=1

    7 available, 4 of which have been listed for over a year! One is fast approaching its second birthday so of those 4 who have deffered and saddled with the dreadful conveyancing firm have already had to pay the fee,. Comisery the feeling you get when you have paid a fee and your house hasnt sold.No new listings for over 3 months

    Interstingly enough for those budding Jon Hunts they are looking for a LPE for the territory OTE £45k. They are certainly going to earn their corn since they only have 18 instructions within 20 miles of the town and the Irish Sea is to the west

    Th

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  3. Chris Wood

    Using publicly available data from a major portal (which I am happy to make available to PIE or any other Bona Fide journalist) here is the story for my neck of the world.
    12 months
    Headlines:

    Current (07.01.17 11.39) live stock volume
    32

    Current (07.01.17 11.39) live stock TOM** Av in weeks
    24.2

    Current (07.01.17 11.39) live stock average asking price
    £ 345,057.81

    Past 12 months

    Total new instructions in past 12 months
    54

    Success rate/ New instr to sold
    28%

    Average price
    £ 311,856.39

    Ask to sale* price difference
    -£ 47,259.72

    Total asking price
    £ 16,840,245.00

    Likelihood of a price change
    63%

    Price changes
    34

    Percentage of stock slow mover (8 Wks+)
    44%

    Average reduction
    -£ 25,119.41

    Total amount
    -£ 854,060.00

    Fallen through
    2

    Slow movers
    24

    Average time on the market current live stock
    13

    Av time on the market for slow movers
    29.6

    Withdrawn
    17

    Sold
    15

    Weeks to sold
    12.86666667

    Average asking price at time of sale*
    £ 264,596.67

    *Not necessarily the actual sale price

    For postcode sectors TR3,11,12,13,14,17,18,19,20,26 & 27 inclusive

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    1. AgentV

      Great monitoring Chris! Out of interest have any of the sold properties appeared on land registry data yet? We could then get a feel for the ‘confirmed completion to listing ratio’.

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  4. smile please

    What have PB innovated? ???

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    1. revilo

      Local Property Experts!!

      There are allegedly several in my area and in my 28 years in the ‘patch’ have never heard of any of them!

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  5. Robert May

    Getting well on for £20 million cumulative losses suggests Purplebricks has been charging far too little for far too long.

    To make a profit Bruce said he had to list 3000 properties a month; 36000 in total, 98 properties every day, 4 every single hour. So far in 2017 he hasn’t managed to achieve 1/4 of his own target.

    Instead of advising profitable agents how to run their business he would do well to consider running his own very charitable organisation a little better, he and his investors can’t afford to subsidise every single sale they achieve forever; the volume of unsuccessful vendors isn’t enough to offset the losses.

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    1. AgentV

      Problem is Robert, I am not sure they are as I nterested in making profit as grabbing as much market share as they posssibly can. I may be wrong , but it feels as though that is their main aim….because they think it will drive the share price higher, enabling them to both raise further subsidy money and increase their own personal wealth.

      I think they are in the ‘publicity at any cost phase now’ …. which is why they are creating inflammatory and provocative articles in the press…. and the press are falling for it, giving them free publicity.

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  6. inthefield

    They seem to be motoring on in the stock exchange again. As I look up another 0.33% today at 153.25. Granted, Im no expert on the stock market but why do they keep rising??! I wonder if the two directors that sold stock recently are buying them back to shore it up? Anyone with more knowledge than me on this please post as I just cant fathom it out.

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