Selling with Purple Bricks – ‘A thousand-pound coin toss.’
Steve Moir Chairman of Westcountry Estate Agency group the Experts in Property reflects on recent claims and counter claims about internet only estate agents.
City analyst Anthony Codling of Jeffries, has given Purplebricks a damning ‘underperform’ rating in a report made public at the end of last week.
In the report, Codling put forward his view that Purplebricks shares should be worth 94p, rather than the 453p that they had closed at the previous day.
Codling made very clear the reasons for his rating at an agents’ conference where it is reported he told the delegates that using Purplebricks is a “£1,000 coin toss – you have a 50% chance you will have saved on fees depending on where you are in the country, or a 50% chance you will have spent £1,000 and not sold your home.”
He cited the Jefferies report saying “Our research sample found that it had sold 51.6% of the homes listed in November 2016 within ten months, a similar success rate to the overall market, but below the company’s claim of 88%. Unlike the traditional market, those who don’t sell still have to pay PB’s fees.”
Purplebricks immediately made an announcement condemning the research and Lee Wainwright, Chief executive of Purplebricks in the UK and formerly of Countrywide was given the opportunity to dispute the report when he was interviewed for a BBC Radio 5 live investigative report on Sunday.
The 5 Live Investigates program was billed as ‘An investigation into online-only estate agents and whether their cut price, up-front fees really do offer value for money.’
During the interview the presenter Adrian Goldberg put forward the premise to Mr Wainwright that his firm were “taking the instruction, putting it online and walking away”.
Wainwright said the Jefferies’ allegation that Purplebricks sells only 51% of listings was “a very big claim – and it is not true”.
Some case studies were included on the programme, with one couple claiming that after their initial Purplebricks contact left the company, they heard nothing. They were tied into a contract and “felt stuck”.
They also criticised the conveyancing service they had to use as part of their deferred payment contract and said that the 12 months that it took to sell their home was “a year of hell”.
The programme also heard, from independent industry commentator Kate Faulkner, who stated her view that the “honeymoon” with online agents is now over.
She went on to say people should understand that many properties – she put it at 40% – do not sell, regardless of the type of agent they are on with.
She said: “Getting from offer to completion is a minefield – the resources and the skillset needs to be in place.”
Goldberg put it to her that with an online agent “The risk is that you have paid for a service and get nothing”.
Faulker responded that there were both bad online and high street agents: “With a traditional agent who is not very good, if they do not sell, you have paid nothing. That is where the reality is beginning to set in.” In the programme this was asserted to be a key difference.
The Advertising Standards Authority was represented on the show by Miles Lockwood, who said that one issue was that online agents were “not comparing like for like” when promoting their fees against full-service offerings.
He warned that the ASA is now proactively monitoring the “output of estate agents as a whole”.
As a representative of an independent group of Estate Agents who differentiate ourselves on service, personal contact and continuing training it is good to hear arguments put forward that explain why the apparently cheapest option is not always the best option.
You can listen to the full program which is well worth a listen on catch-up on BBC i-Player –
The Experts in Property animated video ‘Listing Call Centres versus Full Service Estate Agents’ can be viewed at –