The word ‘Disruptor’ has been one of the buzz words of 2017 and real estate is not immune to this terminology.

Like many facets of commerce, consumers have more choice with plenty of discounters ready to capitalise.

But one of the hardest things for a seller to determine is that if ‘cheaper’ is always ‘better value’…and here’s the toughest part of the real estate industry, it’s a very hard question to answer even once you’ve sold as every property is unique…even a unit complex might have identical layouts but a small variance in its’ position can change the value by a reasonable margin.

One of the biggest misconceptions of sellers is that “every agent achieves the same price in the market place”.

In fact, I truly believe that 70-80% of sellers (even if they recognize value in engaging a quality agent) still underestimate the magnitude of how much money a good agent can place in their pocket at the end of a transaction.

So let’s apply this to my current topic of self-proclaimed disruptors ‘Purple Bricks’.

At the time of writing this blog, ‘Purple Bricks’ have so far made 873 sales in Queensland (which is over a period of around 18 months I believe) – certainly not a number to be underestimated!

According to their website, they have 35 ‘Local Property Experts’ employed throughout the State.

Working these numbers, each agent must have averaged approximately 25 sales per year (or around $27,500 in income).

Presuming that their agents may sell around 50% of the properties that they list (this is purely a guess as I have no idea of the real numbers given it is very hard to track), then there may be another $27,500 in fees per year plus some income earned for extras such as open homes, auctions etc.

I’ve seen statistics showing that some of their agents are averaging a ‘list to sell ratio’ of less than 20% but I’m trying to give them the benefit of the doubt here.

On the surface, the average ‘Purple Bricks’ agent may be earning a little more than the average real estate’s wage in Australia.

But here’s the kicker…carrying around 50 listings per year without any possibility of an assistant (as it’s simply not financially viable) would mean the quality of their service would almost certainly be compromised.

From the feedback I’ve received directly from most sellers that have engaged them to date, this has almost always been the case.

Here’s the biggest problem with this system – If an agent has buyers that want to inspect a property or they have a potential new seller to see, which appointment are they more likely to prioritise?

Remember  – they primarily get paid to list a property for sale rather than sell it.

And what incentive is there for the agent to negotiate hard and achieve a top price, especially when they’ve already been paid?

Of the three most ‘local’ ‘Purple Bricks’ agents to my main area that I work, they have (according to their website) sold 31, 17 and 7 properties respectively since they each started with ‘Purple Bricks’.

They currently hold 18, 19 and 11 listings for sale respectively.

I took the liberty to ‘mystery shop’ them as a buyer exactly 48 hours before writing this article and right now, I can report that I’ve only received a reply from only 1 of the 3 agents.

Some might argue that this is not too dissimilar from a traditional agent (and in many cases, they’d probably be correct) but this is hardly assisting the seller in achieving a top price for their property.

Let’s put this into perspective…

Imagine you decided to engage a surgeon that was charging an upfront fee (before the procedure occurred) that was a fraction of the regular price.

To make a living, he would have no nurses or assistants in the operating theatre and he’d have to commit a fraction of the time to the operation that it would take a regular surgeon.

Would you really obtain the same outcome?

I’m not trying to come down hard on them as I can honestly report a client of mine had family members use them and state that they were very happy with them.

They interviewed the local ‘Purple Bricks’ agent and said that it took them around 2 minutes to determine that this agent wasn’t going to give them the best outcome…even considering the discount.

Perhaps in your area, a discount agent may be a good alternative.

I can tell you that of the discount agents I’ve studied in my area, I can easily demonstrate that my team are achieving prices that are at least 4% higher than those of my competitors offering cheap deals.

If the difference in commission rates are around 1-2%, I would think that we are certainly better value for money….but I’m not the judge and jury of this argument.

On a completely separate note, this blog will be the last of 2017.

There won’t be a blog next week but you’ll hear from me again in the first week of January.

My team and I will be working every day over the Christmas break (with the exception of Christmas Day and Boxing Day) so feel free to contact us if required.

I’d like to take the time to wish all of our valued clients a very Merry Christmas and Happy New Year in 2018 – if you’ve ever purchased a property or sold a property through us…or even just had a property appraised by us or maybe just attended one of our open homes, we’re humbled that you chose us (or simply met us along your journey) and we’re so fortunate that our lives have been touched by many of the wonderful people we’ve helped over the years.

To all of our long-suffering families, thank you for your support as we know it’s not easy being married to someone that works incredibly long and very unpredictable hours.

To all of our staff, thank you so very much for the incredible level of excellence you deliver each and every day – we’d be lost without you!

And finally, to my fabulous team of Tom, Simon and Isabelle, thank you so much for all of the hard work and dedication you bring to the table.

Being on my team is not an easy job but you dedicate yourselves to providing the highest level of customer service and exceptional results, and for this reason, I’m truly blessed that you’ve chosen to work with me.

Finally, to you…our valued readers, I’d like to take the time to wish you all a very Merry Christmas and a wonderfully prosperous New Year in 2018.

I consistently receive so much positive feedback about my blogs from you all. I’ve been writing these blogs for almost 7 years now and I’m always humbled (and very grateful) when I receive acknowledgement from you personally.

I’m touched that many of you have chosen to continue to read my blogs from the very first one I wrote and for this, I’m very thankful.

Again, Merry Christmas and Happy New Year to you and your families…and see you all in 2018!

Until then…and as always, Happy Listing & Happy Selling!