Purplebricks boss Michael Bruce has brushed off criticisms of his business model – but said that the experience of appearing on Watchdog to answer criticisms was hurtful. In a new interview, he also said that because sellers never actually see the money they pay high street agents in commission, the money is ‘virtual’.
In a new interview, with the Telegraph, Bruce said that lessons will be learned from the BBC programme, which included criticisms of the firm’s deferred payment model.
The programme, broadcast in early August, suggested that sellers who chose that option were unaware that they were signing up to a credit agreement with Close Brothers.
One customer said their Local Property Expert was based 30 miles away. Another seller said that Purplebricks had promised to hold their hand, but hadn’t.
He told the paper: “It’s absolutely certain that it hurt me, and every single member of our team who was watching that programme will have been hurting. Because they care and they don’t want that to happen. Are there things to learn from Watchdog? Of course.”
In the interview, Bruce defends his view that Purplebricks’ flat fees charges are transparent, charged whether or not the property is sold.
According to the piece, by Isabelle Fraser: “[Purplebricks] charges a flat fee of £849 – and £1,119 in London – regardless of whether the house is sold; it also charges extra for services such as photography and someone to show viewers around. This is in comparison with average fees of 1.3% for more traditional competitors, meaning listing it with Purplebricks could be a quarter of the price than with Foxtons.
“For Bruce, that’s key. ‘Because paying an estate agent is virtual money, it goes through the process, the lawyer deals with it, you never see it – it’s a very different proposition’.”
He told Fraser that attitudes would change if the customer had to hand over commission in cash to high street agents.
The interview underlines that in percentage terms of listings marked SSTC, Purplebricks is now the UK’s second most successful agent.
According to UBS, it has around 5% of total listings marked SSTC. Connell’s percentage is 5.3% and Countrywide’s is 4.6%.
The interview is also revealing on Purplebricks’ attitude to publicity, with Bruce claiming: “I think we keep ourselves to ourselves in many ways.”
Criticism, he says, was always going to be levelled at a business trying to make a seismic change in an industry that hasn’t changed for a long time.
But, says the article, the criticism hasn’t just come from traditional agents but from online rivals, including Nested which described Purplebricks as the Ryanair for estate agency.
But as Bruce admits: “You don’t go out and play with the big boys in the playground if you’re not willing to be knocked around a bit.”