I’ve noticed that the industry describes the role of a traditional real estate as “full service” in today’s market place.

This seems to be in response to a number of real estate ‘disruptors’…many of which claim to be the ‘Uber’ of real estate.

One of these companies is ‘Purple Bricks’ and I’ve deliberately not discussed them in much detail to date but I have been questioned a little about them from potential sellers lately so I thought I would share a few comments, experiences from clients about them and media stories…as well as some of their own PR – just to provide the most balanced view that I can.

In case you haven’t seen the television adverts, ‘Purple Bricks’ can assist you to sell your home for a flat fee of $4500. This fee includes GST, photos and internet listings.

In principle, ‘Purple Bricks’ states that they can assist you to sell your own home but you can have them run inspections for you at additional costs and they can also assist in auction sales at an additional cost as well.

From what I can tell from online discussion about their average charge, many of their clients seem to pay around $7500 for their services.

One controversial aspect of their business model is that you are charged the fee irrespective of whether your home is sold.

There has been speculation on whether this statement is true but when I researched the Terms and Conditions on their website, the following statement was crystal clear…

WARNING: A commission or fee is payable under this Agreement even if the sale of the property is not completed.

Certainly ‘Purple Bricks’ has gained notoriety in the U.K.

This includes some unwanted media attention as they received numerous serious complaints that were reviewed by the ‘The Advertising Standards Authority’ in the UK.

These complaints were largely to do with the money that ‘Purple Bricks’ claims that you would be saving when using their services.

Interestingly, almost all of these complaints were upheld and Purple Bricks was ordered to amend their claims.

Despite these findings, the company continued to run the same marketing material for a period of time.

They also gained significant media exposure through the UK television show ‘Watchdog’ where the CEO took the brave move of appearing on the show himself.

See the link below for the story…

They have recently reported significant financial losses and some high-profile economists in the media have suggested that a launch into the Australian market may be a ‘short-term band-aid’ to aid the company’s  substantial financial losses.

‘Purple Bricks’ have stated that they are the Number One real estate sales company in the U.K. although they have since acknowledged that they are actually the Number 1 ‘DIY (Do-It-Yourself) company in the U.K…a market which (in totality) accounts for about 5% of all of the real estate transactions in the U.K market.

On their Australian website, they claim to have a 9.4 review rating (out of 10 stars) on a certain review site although it has been widely reported that more than 1/3 of those that have engaged them would never use them again.

So let me try to obtain a balanced view for you….

Here is a recent promotional video that was distributed by ‘Purple Bricks’ themselves…

Seems innocent enough and a reasonably good video in my opinion.

If you read the comments below, you’ll notice that there is some banter (and scepticism) about whether the video had actually received more than 1.1 million views with no comments whatsoever (until a few days ago) and only 5 ‘Likes’.

This does seem a little unusual.

As an agent that does a reasonable amount of video marketing, I can honestly tell you that I have never purchased ‘Views’ or ‘Likes’ although I’ve heard that this practice is common amongst many corporate entities…and this includes real estate agents.

So how does the ‘Purple Bricks’ model work?

What are the advantages and disadvantages with this system?

Why are other low-cost models riddled with past failures?

If the fees are lower, why shouldn’t everyone switch and use companies like these?

Next week, we’ll pull apart these models and compare them with a more traditional real estate model.

Until next week…Happy Listing & Happy Selling!