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Purplebricks’ former chief executive Lee Wainwright has made a stout defence of the controversial agency’s sales progression process and its local property experts.
In his latest video interview with property consultant Christopher Watkin, Wainwright is asked head on whether there is a genuine sales progression process in the agency he worked for until earlier this year, and whether criticism of it has been unfair.
“Operationally, that [sales progression] wasn’t as good as it should have been when I joined the business [as chief operating officer, in 2017]. But it was recognised as being under pressure, that it was suffering from the growth pains, and there has been significant investment into the sales process capability” Wainwright tells Watkin.
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He then adds that in his opinion Purplebricks is further down the road than most traditional estate agents in thinking how to “digitally enable” sales progression by communicating with consumers and other parties in a transaction, including particularly conveyancers.
In what may be the critical question in the interview, Wainwright is asked by Watkin whether it’s fair that some traditional agents tell their vendors to reject an offer if there is a Purplebricks-instructed property in a chain, for fear of it stalling the entire transaction.
The interview also looks at other key elements of Purplebricks’ activities.
Firstly its pricing policy: this rose from £545 to £899 for many of its customers, and Wainwright and Watkin discuss whether there should be further increases to improve the agency’s performance.
Secondly, Wainwright is drawn on the success of Local Property Experts - a concept he says was challenging at first, when the relative scarcity of them meant they were not particularly ‘local’.
“In the early days when you were covering the whole of the UK with 100 Local Property Experts then it obviously wasn’t as possible for people to be as ‘local’ as they are today” says Wainwright. He accepts that a well-told story in the industry of a LPE doing a 300 mile round trip for one valuation may have been true “back in the day” but he insists absolutely that: “That’s not true in 2019.”
The interview is as candid and provocative as the first in this series (which you can still see here). But we have this latest instalment at the bottom of this story, with thanks once again to Christopher Watkin for sharing it exclusively with Estate Agent Today readers.
Not overly sure why this is even important news. Just did a scroll through of Estate Agent Today's latest 50 headline news feeds and 7 of them hold the PB banner, providing 14% of all news coverage. Really?
Interesting that he still talks as if he is still the CEO, why is that I wonder. I’d like to throw some light on the claims Purple Bricks make in the key areas of sales price, sales ratio and sales speed, all of which they say beat the industry and are either the best or amongst the best across the board. There’s a reason they say there are lies dam lies and statistics, I know more than most having studied the subject at University, not to say academic knowledge necessarily means understanding but I pride myself in having a bit of both in this area. In order to evaluate Purple Bricks claims and whether they are fair and comparable it would be necessary for them to open themselves up to scrutiny, something they resist but will eventually be forced to do in my view. There are so many ways the figures can be twisted and misrepresented by omission for example. There is also another more subtle point which may be lost in the noise, I’m not even sure if Lee appreciates it. I have an insurance background so I understand the concept of customer bias, it why life insurance companies don’t want enquiries for big life assurance policies direct from potential clients because statistically they are much more likely to claim than those sold to by brokers. In the case of Purple Bricks there is a definite bias in play because only sellers who are more confident of selling their properties tend to list with them. This would explain the apparent good performance and the apparent paradox between a service that lacks incentive and follow through and the apparently great results. Put a different way, every agent gets a few easy to sell properties, some in the middle and a few hard to sell ones. This phenomenon applies to most things and is called a natural distribution curve. However if Purple Bricks is appealing predominantly to the easy sellers it’s not fair to compare their performance to the average or even great high st agent. To do so would be a bit like having a fishing competition with two lakes, one full of big fat fish and the other containing a variety of sizes. Of course the fisherman fishing in the lake full of big fish will win but it doesn’t make them a better fisherman. Of course you can’t expand much on a model like this because you probably only appeal to about 20% of sellers in any real way and most wont use an agent that isn’t on the high st and has no direct incentive to sell. My theory is that if it looks like a duck, it’s got feathers and it quacks then it’s probably a duck. In the case of Purple Bricks it looks like a turkey to me and Christmas is coming soon. Finally as a PS, the technology angle is understandably overplayed by Purple Bricks and is in reality a big red herring
Is a property more likely to fall fall with PB ? Yes, Yes it is.
We have seen from Lee and others that PB do not proactively chase a sale they leave it to their solicitors who as (in my opinion) anyone in the industry will tell you are the absolute worst. They have cost me many a sale and added far too much grief to chains.
It was the same when i worked for Countrywide, we were forced to sell CCS (In house solicitors) which we were told sped up the process. Again complete rubbish. CCS probably accounted for 50% of the falls throughs i had during my time at CW.
What annoys me is someone like Lee, who has been in the industry for many years thinking the rest of the industry is stupid and things he says he must know are not right.
Either that or he has become institutionalised and does not know good from bad as never experience good service in the companies / roles he has held.
Beyond a joke, just a blatant Liar. One of my vendors is buying through PB. They sent him this (I have the screen shot to verify it's genuine) 'Please read the following important information to help progress your sale as quickly as possible. We find that sales proceed quicker when the seller and buyer communicate with each other directly. A direct request from a buyer to a seller or vice versa can often get their conveyancer and mortgage broker to do things faster. Here are your seller's contact details.....'
Might as well say 'don't call us'!
Completely contravenes TPO guidelines on the 'service' agents should provide, what this guy is saying, and what is a good helpful service to the client. But wait, they have their money, what do they care about actually progressing the sale!
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 most 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.
Andrew -PB as a listed company can’t just go about making false claims which gives them an unfair competitive edge surely-isn’t that against some sort of rules and sort of illegal ? If not why wouldn’t all agent manipulate stats claiming they are the best in their town etc
Well that's a thousand pounds I have lost - let us see Major Tom. I will let you know.
And it is not just about an unfair competitive edge - think of all the shareholders who bought shares thinking that they conversion rate was over 80% only to find it is under 50% - that would be a real cake in the face -
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Not overly sure why this is even important news. Just did a scroll through of Estate Agent Today's latest 50 headline news feeds and 7 of them hold the PB banner, providing 14% of all news coverage. Really?
They are the articles that get most readership and comments - so obviously its a topic the industry is interested in Lenny
Interesting that he still talks as if he is still the CEO, why is that I wonder. I’d like to throw some light on the claims Purple Bricks make in the key areas of sales price, sales ratio and sales speed, all of which they say beat the industry and are either the best or amongst the best across the board. There’s a reason they say there are lies dam lies and statistics, I know more than most having studied the subject at University, not to say academic knowledge necessarily means understanding but I pride myself in having a bit of both in this area. In order to evaluate Purple Bricks claims and whether they are fair and comparable it would be necessary for them to open themselves up to scrutiny, something they resist but will eventually be forced to do in my view. There are so many ways the figures can be twisted and misrepresented by omission for example. There is also another more subtle point which may be lost in the noise, I’m not even sure if Lee appreciates it. I have an insurance background so I understand the concept of customer bias, it why life insurance companies don’t want enquiries for big life assurance policies direct from potential clients because statistically they are much more likely to claim than those sold to by brokers. In the case of Purple Bricks there is a definite bias in play because only sellers who are more confident of selling their properties tend to list with them. This would explain the apparent good performance and the apparent paradox between a service that lacks incentive and follow through and the apparently great results. Put a different way, every agent gets a few easy to sell properties, some in the middle and a few hard to sell ones. This phenomenon applies to most things and is called a natural distribution curve. However if Purple Bricks is appealing predominantly to the easy sellers it’s not fair to compare their performance to the average or even great high st agent. To do so would be a bit like having a fishing competition with two lakes, one full of big fat fish and the other containing a variety of sizes. Of course the fisherman fishing in the lake full of big fish will win but it doesn’t make them a better fisherman. Of course you can’t expand much on a model like this because you probably only appeal to about 20% of sellers in any real way and most wont use an agent that isn’t on the high st and has no direct incentive to sell. My theory is that if it looks like a duck, it’s got feathers and it quacks then it’s probably a duck. In the case of Purple Bricks it looks like a turkey to me and Christmas is coming soon. Finally as a PS, the technology angle is understandably overplayed by Purple Bricks and is in reality a big red herring
Is a property more likely to fall fall with PB ? Yes, Yes it is.
We have seen from Lee and others that PB do not proactively chase a sale they leave it to their solicitors who as (in my opinion) anyone in the industry will tell you are the absolute worst. They have cost me many a sale and added far too much grief to chains.
It was the same when i worked for Countrywide, we were forced to sell CCS (In house solicitors) which we were told sped up the process. Again complete rubbish. CCS probably accounted for 50% of the falls throughs i had during my time at CW.
What annoys me is someone like Lee, who has been in the industry for many years thinking the rest of the industry is stupid and things he says he must know are not right.
Either that or he has become institutionalised and does not know good from bad as never experience good service in the companies / roles he has held.
This guy has to be on a retainer !!
Beyond a joke, just a blatant Liar. One of my vendors is buying through PB. They sent him this (I have the screen shot to verify it's genuine) 'Please read the following important information to help progress your sale as quickly as possible. We find that sales proceed quicker when the seller and buyer communicate with each other directly. A direct request from a buyer to a seller or vice versa can often get their conveyancer and mortgage broker to do things faster. Here are your seller's contact details.....'
Might as well say 'don't call us'!
Completely contravenes TPO guidelines on the 'service' agents should provide, what this guy is saying, and what is a good helpful service to the client. But wait, they have their money, what do they care about actually progressing the sale!
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 most 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.
Andrew -PB as a listed company can’t just go about making false claims which gives them an unfair competitive edge surely-isn’t that against some sort of rules and sort of illegal ? If not why wouldn’t all agent manipulate stats claiming they are the best in their town etc
Well that's a thousand pounds I have lost - let us see Major Tom. I will let you know.
And it is not just about an unfair competitive edge - think of all the shareholders who bought shares thinking that they conversion rate was over 80% only to find it is under 50% - that would be a real cake in the face -
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