News media in Australia say Purplebricks is the subject of an investigation by a consumer watchdog in the province of Western Australia.
The hybrid agency, which runs a similar business model in Australia to its original UK operation, is being probed by Consumer Protection WA according to the Australia Financial Review publication and the 9News TV station.
Purplebricks charges Aus$5,000 up-front to sell homes in the Perth area; across those parts of Australia where it operates, it claims to have sold over 3,500 homes so far and to have “fantastic reviews”.
This latest controversy follows agency being fined Aus$20,000 in Queensland by a consumer watchdog, the Office of Fair Trading, for misleading customers in that area.
The industry arguments over Purplebricks’ activities in Australia mirror those in the UK - it says it’s disrupting an unnecessarily expensive business model preserved by traditional agents, which High Street operators say is not the case - and that instead, Purplebricks merely gives an appraisal and a listing and then effectively leaves the seller to do the rest of the deal themselves.
In the 9News piece Hayden Groves from the Real Estate Institute of WA says: “Purplebricks agents get paid really just to do an appraisal and then you as a consumer are pretty much left on your own to sell your own property ... There’s absolutely no incentive for a Purplebricks agent - or so-called agent - to sell a vendor’s home.”
In the same report, Purplebricks’ Australian chief executive Ryan Dinsdale says: “We’ve had great dialogue with Consumer Protection in WA. As completely expected they’re asking about a very new business model in their industry [sic] and we’re answering all of those questions.”
9News reports that Purplebricks claims it sells 85 per cent of the homes it lists in the Western Australia province but that the Real Estate Institute of WA disputes that claim.
The report concludes with REIWA’s Hayden Groves saying: “If they’re [vendors] expecting to get a proper agent, then that’s not what Purplebricks is delivering. That’s fine, but they need to tell the consumer that upfront.”
You can see a brief written story from9News and the 97 second TV story here.