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Purplebricks steps up its attack on commission-based estate agents

Purplebricks has stepped up its attack on what it calls “Britain's antiquated method of buying and selling homes” by describing it as out of touch, out of date and leaving millions out of pocket.

A survey of 1,003 people conducted for Purplebricks in January and released by the hybrid today, is set to renew the argument between backers of the traditional and online models.

The report states that 35 per cent of those questioned say traditional commission-based methods of paying agents are seen as “unnecessarily expensive” while 28 per cent find stamp duty “annoying.” Overall some 26 per cent believe they paid too much in finding and moving to a new home.

Perhaps predictably, the Purplebricks report found that commission, legal fees and taxes were top of the list of charges that prospective buyers and sellers hated the most.

No fewer than 95 per cent saw online marketing as the first port of call when they started their property search.

Forty two per cent said traditional agents represented poor value for money, 16 per cent felt they did not do enough to justify their charges while 10 per cent said they offered good value for money.

When it came to estimating the amount of commission they would expect to pay to sell a £500,000 house, 96 per cent apparently underestimated the cost while one in seven (16 per cent) said they had no idea what the bill would be.

A statement accompanying the release says: “When asked how they would have felt if they had appointed an estate agent to sell their property, only to find they could have purchased the same service for a lot less, almost all - 94 per cent - said they would feel annoyed with six out of 10 saying they would be ‘very annoyed’.”

Fewer than five per cent were concerned with an agent showcasing a property in a high street office while one in 10 said that they chose an agent following recommendation from a friend or a family member.

“This report shows that commission is the charge people dislike paying the most when they sell” according to Michael Bruce, CEO, Purplebricks said.

In its statement, Purplebricks makes a link with the recent price-fixing story involving traditional agents, by saying: “The report comes as the Competition and Markets Authority announced a £100,000 reward to those who blow the whistle on illegal estate agency cartels, after an agent in Somerset agreed to fix their fees at 1.5 per cent.”

  • Simon shinerock

    One of the first things I was taught in business was 'don't knock the competition, focus on the benefits of your service. I have written a riposte to this attack, I have a feeling Purple Bricks are going to find out the wisdom behind the saying that 'people in glass houses shouldn't throw stones'

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    Purplrbricks the online agent buying out venmores hight street agent lettings

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    I wonder when propertymark/NAEA/ARLA/NFOPP are ever going to get round to supporting their members. I pay subs year after year to this bunch of dinosaurs who seem more intent on spending our money changing their branding than coutering the swathe of on-line propaganda!

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    For the last 30 years the support has been minimal and with the introduction of their consumer biased 'propertymark' they now never will. Empire building and staff benifits would seem to be their priority.

     
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    I suspect this is just the start of a long PR press campaign from PB. They've got the funds and the standing to do so now - and unfortunately some people will lap it up.

    The NAEA issue is an interesting one. People have been criticising their position on this (and quite rightly so, in my opinion) for a while now, but they have stayed very quiet. Will they respond to their members who are unhappy that they support firms like Purplebricks?

  • Dan Jones

    Lets see what their numbers look like with their next set of results...
    Sales are Vanity..... Profit Sanity......

  • Peter Hendry

    Purplebricks is only the first step in the necessary process of evolution of how estate agents may more efficiently arrange for house owners to move between different houses. The next stage would be for agents to commence helping buyers (and even start helping renters) to move house economically, for a fixed fee.
    For more info on this simply search for The Hendry Solution.

    Simon shinerock

    Who came up with it?

     
  • Peter Hendry

    Simon Shinerock, I think your question asking "who came up with it" deserves a reply. You can see all about me on my blog pages. I am someone, with sufficient in-depth experience of the problems that have beset the British housing market and which are clearly continuing to do so. The successful person needs to come up with a plan that can take the market, and those whom work within the market, forward in a positive and constructive manner. It is something that is much needed currently.

    Until somebody actually devises a plan that can overcome the problems which the housing market has now encountered, nothing much will improve.

    One of the main issues needing re-tuning in the British housing market is exactly 'how' should prices be arrived at within this market, when it contains houses with unique characteristics and buyers with similarly plentiful unique requirements.

    My answer, in a nutshell, is that house prices should primarily be set and determined by buyer demand.

    To give a parallel example and since today is Grand National day, ask yourself how bookmakers odds are arrived at, for each of the different racehorses, having unique strengths and characteristics?

    Market prices there are certainly not set by the owners. Instead these are determined by the bookmakers, judging the level of demand being shown during the run up to the day of the race and the actual likelihood of the horse in question (or a house for that matter), winning or being sold. These prices are adjusted as may be required, by the bookmakers working competitively but also knowledgeably and in concert with each other.

    This parallel is advanced simply to show the need for new and better methods when it comes to the selling of each unique house needing to be traded on the housing market. It is only loosely similar because as you will see from reading The Hendry Solution, prices wouldn't be calculated in the same way as bookmakers do in horse racing. Houses and horses are very different types of animal of course!

    I hope you find my new and intricate proposals for improving the housing market, interesting.

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    *Deleted question* : Between 1-10 how annoyed would you be if you paid £100's upfront for a service that maybe wasn't provided or fruitful, then had to resort to reverting to a tradition method of selling?

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