Purplebricks has told Estate Agent Today it is more open about its business than almost any other agency and stridently rejects criticism about its failure to publish numbers of completed sales.
Yesterday’s ruling by the Advertising Standards Authority - effectively banning two Purplebricks TV ads because of what the ASA called their “misleading” statements about fees - prompted renewed criticism of the hybrid agency by investment bank Jefferies.
Under the title “Purplebricks - misleading again” the Jefferies equity analyst Anthony Codling issued a note to investors criticising the agency’s failure to provide completion statistics on the number of properties it has actually sold.
Codling said that the ASA ruling once again prompted a key question of Purplebricks - how many homes does it actually sell, as opposed to list?
Codling told investors: “So far Purplebricks have always chosen not to answer this question, despite the fact that according to chief executive office Michael Bruce ‘Purplebricks is firmly on the side of the consumer’.”
The note continued: “As Purplebricks is committed to increasing levels of transparency, we look forward to it adding its completed sales statistics to its adverts to help its consumers make a fully informed choice between paying Purplebricks irrespective of success or paying a traditional agent only if they are successful.”
Now in a statement to Estate Agent Today, a Purplebricks spokesman has hit back at the accusations about the firm’s transparency.
“Purplebricks provides more information about its business than virtually any other estate agency. In our latest audited results we reported that the UK sold and completed on £5.8 billion of property, with a further £3.7 billion sold subject to contract” he says.
“We sell houses. Traditional agents also do not report the conversion rate, though we would imagine customers who are keen to sell their houses quickly would be keen to know whether they were locking themselves into a 12 week contract with an agent with a poor sales record” he continues.
“Purplebricks is far more transparent in its charging. Our fees are fixed and published on our home page, unlike traditional agents, whose rates aren’t published at all and will vary even on the same street depending on the negotiating skills of each customer.”
Jefferies has in the past acted as an adviser to Countrywide, LSL Property Services and ZPG.
In a separate analysis - here - by Andrew Stanton, who heads the Estate Agency Insights and Strategies, it is revealed that Purplebricks had around 28,000 properties listed on Rightmove in a snapshot of listings taken early this month.
This far exceeds the number of properties listed on the portal by all other major online players put together - but it does not indicate how many properties actually go on to be sold through the online operators.
Media analyst Mike DelPrete, who has already written extensively about Purplebricks, has analysed the agency’s first month’s operation in the US.
“He says: “At the core of Purplebricks’ business are the local property agents, called Local Real Estate Experts in the U.S. After one month in the market, Purplebricks currently has 24 licensed agents operating in the launch market in Los Angeles, California. This compares to over 650 local property experts in the U.K., and over 100 in Australia.
“After one month of operation, Purplebricks U.S. currently has 12 listings, nine of which are for sale, and three of which are pending. Of its 24 agents, nine agents have one active listing each. Sixteen agents currently have no listings.
“Yes, in isolation 12 is a small number, but remember that this is a new business. Getting a new listing every 2.5 days isn’t bad for a new entrant in its first month. But let’s see how it grows from here.”
You can read his full summary of the US operation here.