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TODAY'S OTHER NEWS

Purplebricks ex-CEO hits out at "untrue" claim that agency sold only 50%

The former chief executive of Purplebricks UK says the agency completes on over 80 per cent of the homes it lists and a claim the figure is only 50 per cent “simply isn’t true.”

Lee Wainwright, who left as Purplebricks’ UK CEO earlier this year, strongly disputes the claim made in early 2018 by Anthony Codling, who was the working as an analyst at City consultancy Jefferies.

Codling maintained that only around half of Purplebricks’ customers in November 2016 sold their home within 10 months - far fewer than the 88 per cent figure which Purplebricks’ former global chief executive Michael Bruce cited.

Now - in a dramatic and far-reaching video interview with property consultant Christopher Watkin, offered first exclusively to Estate Agent Today readers - Lee Wainwright says Codling’s claim “simply isn’t true.”

He tells Watkin: “I can assure you the numbers that have been shared are accurate” and that over 80 per cent of Purplebricks’ listed homes were sold. He said he “felt very comfortable being the voice of Purplebricks” defending such figures in the media.

In the interview Wainwright explains how he first joined Purplebricks in early 2016 as chief executive officer; despite the criticism the hybrid agency was beginning to receive from within the industry at that time, he says his decision to join was received warmly from colleagues, and that he himself never bought in to the narrative that it was ‘online agents versus High Street agents.’

“I don’t believe in online versus High Street. I believe that estate agents have always competed” he tells Watkin in the interview. 

Wainwright’s first major task at Purplebricks was to address the huge demand from sellers that the agency couldn’t meet in early 2016.

“My stand out memory is … that we had thousands of valuations that we couldn’t attend … and I thought I’d never had that challenge before … Thousands of customers wanting to talk to us about selling their homes and not being able to satisfy that demand” he says.

Consequently he succeeded in recruiting well over 100 Local Property Experts within early 2017 - only to then face the reverse problem of over-capacity in the company as demand, in the third quarter of the year, failed to meet the expected growth.

He says this problem - being appropriately staffed for varying demand - was one that had been a characteristic of Purplebricks, but was largely a result of its success he insists.

Wainwright explains to Watkin about how he joined estate agency and in particular of his highly successful 26 years at Countrywide, including 12 in charge of various brands - at one point he was responsible for 120 branches. He also speaks candidly of how and why he left the troubled agency group during the tenure of Alison Platt as chief executive.

But it is his time at Purplebricks that may be of most interest to many in the industry.

When he moved from chief operating officer to chief executive in the UK - an appointment made to strengthen the leadership team in this country as the agency was expanding into the United States - the firm was faced with substantial criticism emerging from consumers. 

Wainwright speaks of Michael Bruce’s appearance on BBC Watchdog (“a tough one … a very one-sided argument”) and of his own appearance on a BBC Radio 5 Live consumer programme (“without doubt it was a witch-hunt.”)

It’s a fascinating interview and just the first of a number where Watkin will be exploring Wainwright’s views on how Countrywide and Purplebricks could manage their respective futures now that they are in apparent difficulties.

Christopher Watkin has kindly given Estate Agent Today an exclusive preview of this first interview, and you can see it in full below.

Poll: What figure do you believe on Purplebricks completions?

PLACE YOUR VOTE BELOW

  • James Donald

    Yep over 80% of course, easy to get hold of, get stuck in with sales chasing, offer top quality photography not from their mobile phones and really care about negotiating the best sale price for the customer...

    Thankfully the public are beginning to see through all the BS, PurpleBricks no longer have the budgets to go crazy with advertising since investors have wised up and the fact that both founders have now jumped off the sinking ship basically says it all!!

    One day of news without mention of PurpleBricks would be lovely!!!

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    James .. you said "One day of news without mention of PurpleBricks would be lovely!!!" .. yet we all look at the article, watch the video and some even comment ... love them or hate them - its what people are talking about.

    What did you think to what Lee Wainwright saying he knew PB weren't getting it right and the kicking they got on Watchdog?

     
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    Mobile phones?? What are you referring to?

    BTW, what proportion of your stock do you sell? I'd guess it's around 40?

     
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    Lies and Dam lies

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    Peter - do you think it was fair what Lee said about Watchdog in the video?

     
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    Pathological liars are usually paranoid about being lied to

     
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    Hi Lee. Good interview. Made me late for work and i didn't even get a mention. LOL.

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    Lee is a good guy should have been head of EA and had a none EA head of the UK company that would have really worked someone from an outside industry like apple, amazon, google. I agree about the number of sales too we were consistently selling 89% of all we list and remember it makes sense as you have already committed to pay the fee you will just keep chipping away at the price till you find a buyer. I must admit I was not based in London so dont know how sales % are down there.

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    I asked some even harder questions about sales progression, online reviews and pay up front model of PB .. these will released in the coming weeks

     
  • Simon Shinerock

    He tells Watkin: “I can assure you the numbers that have been shared are accurate” and that over 80 per cent of Purplebricks’ listed homes were sold.

    Yes, we and many other agents helped reach this figure 😂

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    So what's your point Simon?

     
  • Ashley  Sorensen

    Maybe 80% of those properties owned by vendors who got that weekly PB phone call - “Do you remember when I called you last week and recommended we reduce the price of your house...?...which you agreed to...well, this week we are recommending a further reduction. Be assured, we’ll call you again next week to have the exact same discussion” 🙄. Most agents could sell the majority of properties that are down to their bare bones, whereas selling property at value in a flooded market does deserve a pat on the back.

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    I'd be interested to hear what it is you do differently Ashley. How do you achieve your premium prices in a "flooded market?"

     
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    lets be honest now -80%-is a internet based agency going to achieve a better hit rate than teams of fully trained estate agents in a high street office. Maybe PB will be successful maybe it wont but its really time they started to stop the b sh.t. Sales rate of 80% just can not be true-if it is publish the hard facts=-why wouldn't you.

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    Major Tum. By fully trained, do you mean experienced? PB LPE'S only work with experienced estate agents. We've all worked with these people on the past; they gained their experience with us.

    Your online tag for the business is incorrect. PB is a regular estate agent business that just happens to have online support that most of us wished we had but can't afford. They work with experienced agents and they don't have your overheads.

    Agents have always competed. You've lied, cheated, scratched and kicked your way into winning an instruction without having anything different to offer the customer. But you all now seem to be united with one common enemy. An enemy you can't defeat. An enemy you may one day be working with (if you're lucky enough to be asked)

     
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    No way did they sell 80% ,not a chance ,..all bull. They're good at that that's for sure.

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    And what's your YTD ratio Victoria? You agents are great at calling BS bit you're not so great when asked about your performances

     
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    Christopher please ask about the lettings business. That's where the real deep s*** is.

    Staff unable to make a living, having to cover enormous areas, huge pressure to get good reviews (suggested we took reviews from multiple viewers even if they didn't take the property). Little to no support. Property management a shambles, accounts a nightmare.

    To give you an idea of how bad the renumeration is, a letting agent working as a 'licensed business partner' would be paid £75 to do one tenant-find let. That would include viewings, photos, floorplans, weekly marketing updates etc. and these properties could be over 150 miles away. You would make a net loss doing these sort of deals purely on petrol costs! For a company who evangelises about the 'Purple Family' and putting people before anything else, they should be ashamed.

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    AnonAnon .. this is the first of a series of video topics with Lee Wainwright. I have challenged him on the pay upfront model, the charging method, reviews and a number of other PB things (which will be released in the coming week or so) .. yet sorry - I didnt ask him about Lettings

     
  • Andrew  Estate Agent

    On the 18th of October 2017, I proved that Purplebricks converted only 48% of listings to completed sales, the full article is on my website estate-agency-insights-strategies for anyone who is interested.

    I was in contact with Anthony Codling at that time and sent him my analysis plus a comment that using PB was the same as same as flipping a coin, ie a 50% chance of losing your fee paid upfront. Anthony also did his own analysis based on tracing a sample of instructions and seeing what amount completed as recorded at Land registry.

    Despite requests from Purplebricks, they have never disclosed their conversion rate, but the failure of Emoov (1) last year does give some interesting insights into the online model.

    I also posted a comment some months ago that ...

    ' If you look very closely at this independent analysis commissioned by Purple Bricks by the data experts twentyci which cover the financial year 2017 to 2018, available online on the Purple Bricks website under investors on the title page, there seems to be some contradictory claims.

    In the twentyci report, and I quote 'Purple Bricks were looking for a reliable, respected and independent data source to establish answers to a set of questions about their performance in the financial year 17/18′ And Purple Bricks are … ‘No1 at selling houses: 81% of listings sold within 12 months’

    Then there is a helpful graph in the same report which shows an annual picture of Purple Bricks results, it shows 64,000 new instructions, 48,000 properties sold subject to contract and it shows 38,000 properties exchanged. Now the ratio of exchanges to new instructions 64,000 to exchanges 38,000 is 59%, so Purple Bricks are not selling 81% of the instructions.

    But the worrying thing is, if the company gets 59% of vendors exchanged, it fails to get 41% sold or exchanged but still charges them on average £1,100 as an upfront non refundable fee, which is 41% of 64,000 vendors at £1,100 or 28.86M of fee for nothing.

    Readers of this are going to say the figures are wrong and skewed etc, but twentyci also did a similar report on Emoov and Tepilo, post the recent failure of these two online companies. And the WHICH organization recently had sight of this twentyci report and said that the conversion rate of the online pay upfront company was 53% of instructions to sold subject to contract, if you then discount the 53% by 30% the usual industry fall off for cancelled sales you get to an exchange rate of around 37%.

    This is available on the WHICH site online. In this piece by WHICH, it is stated that the ‘Major online estate agent Emoov, which also owns Tepilo, has gone into administration, potentially leaving thousands of home-sellers out of pocket by as much as £2,995. James Cowper Kreston, the firm appointed to act as administrators for Emoov, says the company currently has 5,000 properties listed for sale or sold subject to contract. Of this total, around 80% have paid upfront for the service and are at risk'.

    The big story is that instead of focusing on the financial sector and banking and PPI, maybe Trading standards Powys, should be looking at PBI - and looking to refund the 50% of clients who paid fees upfront in good faith and got a cake in the face.

    By my reckoning their are tens of millions of pounds paid by vendors in good faith that has been squandered on 20M plus a year media advertising on the brand alone, which should have been used to 'market' and successfully allow vendors to complete. This money should go back to all clients who received no sale.

    I think Chris Watkin is a top boy - and he injects debate into the property arena, what beguiles me is that the property bodies, and regulators sit on their hands whilst misery is being dealt out to vendor victims.

    I make my living out of analysing all aspects of the property world, but in a former role I personally oversaw the marketing of over 8,000 instructions, thousands of which I personally listed, and the conversion rate was always the same, list 10, sell 7 subject to contract, of which 2 fall through prior to exchange, 5 exchange - 50% conversion. In a very hot market, you might sell 8, but 28% are always going to fall through.

    So, if Mr Wainwright has any figures that he wants to show me, that contradicts the industry norm, please give me a call.






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    You seem to shape facts to fit opinion. Leave it to the qualified professionals Andrew Stanton and enjoy your retirement.

    The analysis of your own sales data is floored. Is there no resale of those that have fallen through? Also, you say the conversion rate was always the same but you then report a differential between hot market and not so hot?

    "Always the same" also highlights that after years in the industry, you didn't improve. It was the same, year in, year out. Same business model, different day.

    Perhaps that's why Purplebricks is bothering you as much as it does. You didn't think of it first.

     
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    • 25 June 2019 12:55 PM

    I'm proud to say whilst working with PB I sold 87% of my stock in year 1 and 93% year 2. How did I do this? I was an honest valuer. I lost listings to agents over inflating prices to gain business often, but local people knew that if they came to me they would get honest advice. I know how hard the everyone works in that business and unless you have done it first hand then you really haven't got a clue how much dedication goes into it. Amazing to see whilst you are clocked into your 9-5 jobs you have time to comment on posts like this when you should be servicing your customers

    Steve James

    Nonsense and you know it and you can't prove it

     
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    Steve James. How very rude!! Why would you call someone a liar without proof. Can you prove what he says is nonsense?

     
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    Mr Voice.
    Bull s---
    We just don't work 9 till 5ve.
    OMG.
    You have been in the business 5 mins.
    Tell me after being in business for over 20 years that we don't look after clients.
    FRO.
    Mr.

  • Andrew  Estate Agent

    Mr Voice - try 70 hours plus a week , and try since 1986 - then you will get some idea how much industry knowledge there is on these comment threads.

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    So what do you think the average experience a Purplebricks LPE has?

    Does anyone know or are you doing a Donald Trump and a Boris and just sprouting opinion??

     
  • Simon Bradbury

    What a really excellent interview - thank you both for the insight!

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    Lets start with the good bits. Well done Chris for getting the interview, Well done EAT for publishing it. As for Lee decent chap.

    However the narrative Lee spouts throughout his time at CW and Purplebricks makes me think he either has not got a clue or is in complete denial. As for other agents popping up on here saying they have a 93% sold rate is frankly laughable.

    Anybody that has any industry experience knows the crap these people are speaking.

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    What exactly was wrong with the narrative as you failed to say? Im not referring to the figures.

     
    Simon Shinerock

    Once a person has done a thing they tend to defend the thing they have done, even when they have nothing to defend it with. In binary terms, up front fee without any incentive equals classified advertising

     
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    I have no time for PB either but unless you've worked with Lee you are not qualified to diminish his CW achievements. For every knocker i could show you 100 who would have nothing but praise for his contribution to their success. Lee is neither clueless or in denial in that regard. Best keep any criticism to his PB era. Preferably when you've listened to all the interviews.

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    Like it or not they're here to stay even if they go bust because someone else will pick them up. Their most valuable asset is there sales team and as long as they are their they will be here many years to come. Don't underestimate them I can see easily how to fix their problems and the departure of the original founders will allow this to happen. I for one will not turn my back on them in complacency.

  • Steve James

    I worked for Purplebricks for almost two years and without doubt I can say that the 50% figure is accurate. There is no way on earth that PB sold anywhere near 88% they claim and I'm not sure why Lee Wainwright is piping about this but PB is based a lot on hype to get the stock up. In addition how can they prove it? If they can sell 88% of what they take on then they could change their model to a pay on completion and be amazingly successful. I'm guessing Lee still had options that he wants to increase on. No sugar with my tea Lee! Failed in Australia, USA because of the hype and more BS being spewed out by an ex CEO who was forced out by management who didn't like him.

  • Simon Shinerock

    The sales completion claim may be explained by the numbers of properties that are temporarily withdrawn by the seller, Ive heard there are a lot of them and they are excluded from the figures

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    No they're not Simon. Who told you that?

     
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    I must say, I'm a little disappointed Simon. You're previous comment about PB simply listing with no incentive to sell isn't like you. Surely you've worked out by now what the incentive is?

    You were a trailblazer once Simon. You were the first agent in the areas you operated in to advertise your fee (to the horror of every other agent). Other eagents mocked you and we're very critical of you. But your employees believed in the business and you managed to deliver the same service as the competitors that charged almost double.

    So I would have thought you'd have figured it out by now. What do you really think is Purplebricks' incentive to sell their customers houses? Be honest.

     
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    Quite frankly I don't care what PB say/do or did or anyone else for that matter. We should all focus on what we are doing here and now with the market we have to deal with. The online agents will do what they do and we on the high street do what we do. A client chooses which model they want. It isn't all about the fee. Boards breed boards and sold by's breed more sold by's. For the 31 years I've been doing this job I love it has always been the case.

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    Glad to hear. But on the whole LA and EA charge stupid high fees hence government clamp on LA. To Tenant Find Only and sign up should be no more than £200. To sell should be between .0.5% and 0.75% as it is with the "good" offices in Portsmouth, we forget the rest rip off Flash 4x4 and silly socks street traders.

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    What if the house you are selling is only worth 70k.
    Utter nonsense Steve.
    Please let us get on with doing a good job.

    Steve James

    How many houses are at 70k? Whatever your taking keep taking it.

     
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    You cant buy a property for £70k in our area Stop charging rip off nonsence fees.

     
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    Cheers Steve.
    It's Bonnie Scotland Mate.

  • Ben Hollis

    I didn’t have the time to research the whole of the uk, but based in RightmovePlus and ZooplaPro data for Hampshire the original 48% claim seems accurate.

  • Andrew  Estate Agent

    Stanton’s £1,000 Purplebricks Conversion challenge.

    I have never been frightened to put my money where my mouth is, and in response to Lee Wainwrights ex-CEO of Purplebricks statement that Purplebricks completes on 80% of instructions they list.

    I Andrew Stanton – property analyst, consultant and journalist, from estate agency insights and strategies – throw down a £1,000 prize gauntlet to any former or present employee of Purplebricks, who can prove this statement to be true.

    Since 2017, from my own in-depth analysis I proved that Purplebricks only completes on 48% of the instructions they list or less. And I have repeatedly asked for proof that this is incorrect and found no takers.

    I can give you an up to date example, on Rightmove 27th June 2019, Purplebricks had in one area Meridian, a total of 3,159 properties showing as either for sale or under offer.

    1,844 listed for sale, and 1,315 listed sold subject to contract, so only a 58% conversion rate, which allowing for a 28% cancellation rate on the 1,315, gives 946 completions or a conversion rate of only 29%.

    I am willing to lodge £1,000 with EAT, for 28-days, and the first person from Purplebricks, who can show the EAT team proof that Purplebricks does complete on 8 out of 10 instructions they list, will receive the £1,000.

    The only rules are that, the conversion rate must be over a 12-month period, and if any LPE seeks the £1,000, they must have listed for more than 12-months.

    So, Jan to Dec 2017, 96 properties are listed by an LPE, Stanton would require verification that 77 of these addresses completed having been sold by Purplebricks; at any point after they were listed.

    Purplebrick’s in their company annual statements have been stating that they have been completing at a rate in excess of 80%, and some months ago I contacted National Trading Standards Estate agency team, querying this. Stating they probably only completed on 50% or less of property listed.

    Which meant over £35M was paid out in upfront fees from vendors last year, who failed to achieve a sale. The response was that that until the public complained no action could be taken.

    I am not singling out Purplebrick’s about completion rates on property listed, this is just an industry norm that agents only complete on 50% of the properties they are instructed on.

    Given this ‘truth’ perhaps there might be merit in charging a marketing fee on all instructions, based on services rendered.

    Any person wishing to claim the £1,000 reward, please contact Graham Norwood who can act as referee, if I am incorrect I am more than happy to pay up and shut up. The clock starts ticking today the 29th of June.

    I will let you all know if I had to pay out.

  • Simon Shinerock

    Michele Lockwood. I’m sorry you are disappointed with my stance on Purple Bricks but I am in a very good position to judge their model because before I started Choices I was a Seekers Franchisee, they were known as ‘The no commission estate agent and operated a local model identical to Purple Bricks. I started Choices with the formula Commitment + Incentive = Effectiveness, charging an upfront fee in return for a reduced commission on sale. We also offered a money back guarantee if we didn’t perform and another agent did. What I’ve learned since them is there is so much more to being a great agent than fee and there is 0% chance of a no commission model ever coming close to providing the kind of service being provided by the best agents. As I said in another post, if you have a fishing competition and one fisherman is allowed to fish in the lake with the big fish while the others fish in the lake with all different sized fish the fisherman with the advantage will win but not because they are a better fisherman. Some people have houses that are easy to sell, many choose a cheap route to market, it’s not a scaleable model beyond where it is and the costs are prohibitive. Past that you obviously don’t know what I’m up to right now Michele or you wouldn’t use the past tense for my trail blazing :)

  • Andrew  Estate Agent

    Simon - some excellent points - and having been trolled by Michelle - who said that I should enjoy my retirement - I also think she should do her homework.

    Simon Shinerock

    Thanks Andrew, well one of the other advantages of experience is thick skin :) I have been giving some thought to why online has stalled at 4% market share. I have a theory it’s linked to The Pareto Principle, otherwise known as the 80/20 rule. So applying this rule 20% of vendors might consider an online agent, those in the fourth quartile of saleability on the distribution curve. But only 20% of those will actually use a cheap online agent giving 4%, food for thought if nothing else, don’t tell the investors!

     
    Simon Shinerock

    I didn’t respond to Michelle’s attempt at being enigmatic about PB’s Incentive to sell but whatever she is referring to is irrelevant if the staff aren’t on board, it’s all about human nature

     
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