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TODAY'S OTHER NEWS

Purplebricks tries 'pay half upfront, half when home sells' model in Australia

Purplebricks has introduced its second price rise of the year so far in Australia, and is pioneering a model under which half the fee is paid by vendors upfront and the rest when the home is sold.

A report in the Australian Financial Review says Purplebricks customers in that country will pay a $8,800 fixed fee from October 1 - that's around £4,800

“While Purplebricks says the $8,800 fee is all-inclusive, it is almost double the $4,500 fee Purplebricks charged when it launched in Australia two years ago and does not include the cost of an auction, which adds another $600 to the price” says the report.

“Cash-strapped Purplebricks agents, who earn just over $1,000 a listing, will be able to double their money if they negotiate a successful sale” the report continues.

The AFR claims that in some areas it would appear, at first glance, to be cheaper to sell a home via a High Street agent - many charge a one per cent commission rate or even less - but Purplebricks is quoted in the piece as saying that comparison is unfair as traditional agents charge further marketing fees whereas the hybrid’s charge includes marketing.

The AFR goes on to suggest that Australian vendors could pay Purplebricks up to four times the price that UK vendors would pay to list a home.

Purplebricks global chief operating Neil Tavender, who is based in Sydney, is quoted in the piece saying that the higher fees in Australia reflect the fact that it was a "very different market" to the UK or the US, where Purplebricks also operates.

"We are excited about the changes we are implementing, which are a natural evolution of a business that has really captured the imagination of Australians," he says. 

"In a short period, Purplebricks has sold over 4,000 homes and saved sellers more than $49 million in 'traditional' real estate fees and this is just the start of our journey in Australia. People will still save money by using our service."

You can see the AFR’s latest online article here.

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    'but Purplebricks is quoted in the piece as saying that comparison is unfair as traditional agents charge further marketing fees whereas the hybrid’s charge includes marketing.'

    really? because here in the UK Purple Bricks charge plenty of 'further marketing fees' unless accompanied viewings doesn't count?

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