Purplebricks is not revealing details of the different pricing strategies it is testing “in the field” early this year.
Last month the firm announced that it had conducted a pricing exercise involving what it called “four different pricing methods”; at least some of these are now to be tested in real-life in the early part of 2020.
Estate Agent Today asked Purplebricks for details but was told: “This is commercially sensitive information.”
In October Purplebricks increased both its upfront and deferred payment prices by £100; for new customers this rise meant £899 went up to £999 outside of London, while the London-and-surrounding-areas fee of £1,399 went up to £1,499.
For these fees, which include VAT, vendors receive a valuation, floor plans, listings on Rightmove and Zoopla and the services of a Local Property Expert. Most other services, such as accompanied viewings, involve additional fees.
At the time of the increase, Purplebricks stated the new fees remained reasonable given the industry’s typical commission for conventional agents of some 1.2 per cent plus VAT.
However, this was the second rise within 12 months - in November 2018 prices rose from £849 to £899 outside London and from £1,299 to £1,399 within.
The agency’s latest trading statement to shareholders says: “An in-depth pricing exercise was conducted [in 2019] ... to answer three fundamental questions: How much headroom do we have in our pricing?; Can we increase our addressable market by evolving our pricing structure?; Can we better incentivise our population of Local Property Experts to improve customer outcomes?
“The pricing exercise saw the deployment of four different pricing methods into the market to gather data and as a result, a series of in-field tests will be conducted in early 2020 that will examine different pricing strategies, with some reducing the level of up-front fee and splitting the payment between publication and completion.”
Speculation from one Local Property Expert that contacted Estate Agent Today - and who asked for anonymity - suggested that different pricing strategies, possibly including a No Sale No Fee model, will be tested in different areas, and that final choice may be made in time for the firm’s full year results, in the summer.