Norwich MD on Purplebricks: '£899 doesn't buy much expertise'
PUBLISHED: 11:36 06 July 2019 | UPDATED: 12:41 08 July 2019
The boss of a group of more than 30 estate agents said it was "no surprise" that Purplebricks had pulled out of the US because the low cost of its service "doesn't buy much expertise".
His brutal assessment comes as Purplebricks, which will sell your home for a fixed fee of £899, announced pre-tax losses of almost £56m. As a result of these dire financial results the firm is quitting both the US and Australia. However, shares still went up and the company stated revenues of £90.1m and an operating profit of £5.3m in the UK.
But rival estate agents are almost universally scathing about the firm.
Nick Taylor, chairman of the 32-member Norwich & District Association of Estate Agents, and managing director of independently-run Hadley Taylor, said: "Online-only estate agency is nothing new. Agents who provide a nationwide online service operating from a call-centre type operation have been around in various guises since the dawn of the internet.
"None of them have really worked because most consumers want more than they offer. When selling one's biggest financial asset, most sellers want to employ a fair degree of expertise and the truth is that £899 doesn't buy much expertise."
Purplebricks operates an 'online-only' model meaning it does not have the overheads of high street offices but did invest heavily in getting experienced agents after criticisms when it first started.
Martyn Baum, group residential manager at Arnolds-Keys estate agency, with seven branches across Norfolk, said: "Online estate agents have only ever accounted for up to 5% of property transactions in the UK with recent research stating that this sector only accounted for 3.8% of new houses being placed on the market at the end of June.
"Purplebricks have been a useful disruption adopting modern online communication methods however its downfall has come about by concentrating on only a small section of the house buying and selling process, the online marketing. People need help and guidance when selling what for most is their largest asset. The hard work really begins once an offer has been agreed between a seller and buyer. Many online agents just do not offer this service. The issues that Purplebricks are experiencing come down to the missing parts of estate agency that they just don't cover rather than the ones they do."
In May the CEO and founder of Purplebricks, Michael Bruce, quit. But the firm has grown in Norfolk, with around 300 homes for sale ranging from £1.6m to £79,995.
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