The boss of Purplebricks.com, Michael Bruce, has said he is not anti-estate agent.
Michael Bruce told Eye in an interview yesterday: “To be absolutely clear, it is not our intention or desire to attack high street agents.
“I want to make it abundantly clear that we are talking about estate agency and not estate agents – there are a lot of very good people and we want to work with them.”
Bruce, above, said that Purplebricks was merely reacting to customers’ own views of estate agents. “It is what the customer is saying,” he said.
“These are not issues that I have created but have been raised by real human beings.”
He said: “It is clearly the case that customers are expressing their views about estate and letting agents – for example, the rise in complaints to the ombudsman.
“What we are trying to say, at the end of the day there are lots and lots of brilliant estate agents out there – but there are also a lot of unhappy customers.”
Some of the unhappiness, said Bruce, was based on perception and some on fact.
He said that two years ago, in planning Purplebricks, “hundreds and hundreds” of customers were interviewed and their complaints noted.
He said the research flagged up customers’ desire for convenience, plus access to information and more transparency.
As a result, the Purplebricks business model includes a 24-hour service plus the ability to track transactional progress online.
But he suggested that Eye has over-emphasised the role of a call centre in Southend, saying this was only a relatively small part of the operation.
Was Bruce aware of what he claims is widespread dissatisfaction with estate agents when he was running Burchell Edwards – a firm he sold to Connells in 2011?
“Like any CEO, I was aware of what the customer was saying across the industry.”
He revealed that in the year before the sale of the business, he had investigated the possibility of turning Burchell Edwards into a hybrid agent, offering both high street and online services. However, it had not been possible to proceed because of the difficulty of dual pricing.
Bruce also said that local property experts can expect to earn £60,000 to £80,000 a year – as revealed in yesterday’s story on this site.
To achieve this, they would have to bring in 20-25 sales instructions per month.
He revealed that most (90%) of the local property experts are existing estate agents who are licensed by Purplebricks. However, some are employed, earning what he says is an above-industry basic salary plus commission. He said commission is payable on both listings and sales.
Bruce said that there has, as yet, been no customer resistance to paying £599 upfront when there is no guarantee of a sale.
He said the ‘no sale, no fee’ system was unfair, being only advantageous to the person whose home did not sell. It was not fair to the successful sellers who had to fund the marketing of all the properties on an agent’s books.
Bruce went on: “We have had no objections to our fee, but then most vendors are paying an upfront marketing fee of between £299 plus VAT and £599 plus VAT.
“Agents had been earning money from HIPs, and when they were abolished, agents needed to replace that income.”
Although the practice of charging upfront marketing fees varies from area to area, Bruce said that a “significant” proportion of agents do it, including all the corporates. He said that Burchell Edwards itself had charged vendors upfront marketing costs.
Bruce said that there are now over 50 local property experts across the Meridien TV region, which was chosen for launch because 23% of the UK’s housing transactions take place there.
A second region, not yet finalised, will be rolled out over the next two months, and the whole of Purplebricks.com will go national with a year, he said.
The aim is to break even and start making profits within the second year of trading.
In five years’ time, he believes there will still be high street agents: “But the number will decrease, although to what extent I can’t predict. However, the number of agents will not have changed.”
Asked about the choice of name for the company, which is backed by ex-Capita boss Paul Pindar, Bruce said: “I asked the boys and girls to come back to me with a colour that stood for integrity and transparency, and purple was at the top of the list.”
Comments (23)
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Bruce' s last involvement in estate agency as joint owner of Burchell Edwards is well documented – There's only one out outcome for his most recent venture.
Marketing and throwing money at something doesn't work if you have a fundamentally floored business model. The more publicity they generate the better, as people will soon appreciate how useful a good local agent can be compared to online agents who offer very little comparatively.
WOW – I LOVE this new censorship software.
Lets give it a test…
****, ****, ****, ****, *******, *********, ********, and not forgetting *********************!
JEEZ – it's good! That's me ********!
What a pity it doesn't censor the ******* **** that the likes of 'the plum', RR etc **** out in the guise of 'the truth'…
wilko – "Does that translate loosely to "there is no such thing as bad publicity?""
Nope – I said that in response to an earlier comment.
I said (loosely) "If you chuck enough **** at the fan, some of it will stick".
And, let's face fact here – if ****-slinging is an artform, then 'the plum' is a Grand Master.
I'm never quite sure why everyone gets so hot under the collar about something that according to them is doomed to failure. If, as most who post here seem to think, online agency will never take off and the high street is the only way, why worry about it?
I have no doubt that we all claim to do things better or differently to our competitors, and the only things in Purplebricks 'comparison' I would take particular issue with are the 'local expert' 'post sale support' and 'honesty'. the rest is just their sales pitch, and is really no different to what happens anywhere, in any competitive industry, so what's the problem, particularly as it will never catch on!
I totally agree with Mr Bruce that no sale-no fee is not fair on the consumer, and is also a nonsense as a business model. I worked that one out within minutes of sitting at my desk in my first job in agency 30 years ago!
It's perhaps worth pointing out again, that everyone refers to no sale- no fee as the 'traditional' model, but you only have to look back in my lifetime to find that the norm was to agree an up front marketing fee with your client, and a commission on completion, so that is what is really the 'traditional' model, and makes far more sense from a business point of view.
I believe it was Owen Oyston in Lancashire who first started offering no sale- no fee, and if property eye had been around at the beginning of the eighties, I can guarantee it would have been full to the brim with other agents saying 'it will never catch on, it's just a marketing gimmick' 'things will never change' etc!
The rest, as they say is history, but it proves the point that things do change, so it's worth keeping an eye to the future, you never know, in this increasingly technology driven society we now live in, online agency might just catch on.
I don't think people are hot under the coller about this agency setting up….other online agency stories/launches often go un commented on and, like you yourself agree with, it is not acceptable to promote your business peddling lies about competitors.
It's got nothing to do with an online agency Hound. Mr Bruce's business practices are shoddy it's as simple as that.
"I want to make it abundantly clear that we are talking about estate agency and not estate agents…"
Wonder if he also subscribes to the opinion that 'bombs are bad things – but the people who set them off are good'.
Seems like his train of thought runs along these lines.
Agree with Wilko… an ASA complaint coming up if these false statements/claims are not removed soon. You wouldn't want that against you so early on
Hi, you can do an asa complaint quickly and efficiantly online.
I brought their attention particularly to the "tick and cross section" of services that they claim they offer and traditional agents dont.
Imagine the big story …."new online agent found guilty by the asa!".
I would urge all like minded professionals to do the same and get other collegues and companies to do the same.
"Imagine the big story …."new online agent found guilty by the asa!"."
Yes, wilko – but imagine the deluge of hype produced by 'the plum' (thank you, surreymac for that… ;o) ) to ride on the back of such a wicked judgement and turn a negative into a positive!
This guy ain't daft.
I applaud Mr. Bruce for speaking to the eye and in the hope that he may be reading some of the comment that we have made over the last week or so. If this is the case then;
Can you please remove the lies from your website (eg tradidional agents do not have local property experts, traditional agents do not give after sales service, traditional agents are not honest or transparent etc etc….you know the comments that are not true)
You will never get off the ground trading on pure negativity, no company in any industry ever has. Most would be customers want to hear what YOU can do…..not what others CAN'T.
Hi wilko. I don't applaud him at all. He is getting his name – and that of his company – back in the media. Hype – pure and simple. SEO.
I applaud EYE for publishing it – as it gives us an opportunity to add our own 'side' of a) what they do or don't do that is different; and b) likely or not to make a difference to customers' chances of selling or renting their properties.
THAT is the level ground. Compete on the same level, and let service and success win or lose you instructions. But, like many of our High Street competitors, this shower doesn't like playing – or simply CAN'T play – on that level field.
Can't seo go against you sometimes, if a report is negative for example?
Absolutely – but if enough brown, nitrogenous waste material is propelled towards an electrically powered air circulation device, an indeterminable proportion of it will adhere, due to its viscosity overriding the centrifugal pressures exerted against it.
If you get my drift. ;o)
Does that translate loosely to "there is no such thing as bad publicity?"
eZie is not a new invention and Mr Bruce knows it. It's doomed to fail as he well knows.
I have just been on Rightmove and cant find any Rightmove accounts for 'Purpurowecegły' (Polish for Purplebricks) .. lets all keep an eye when they do get their Rightmove accounts up and running.
I have a feeling these guys might have the online model but with local agents just right … watch this space
I love property industry eye but you really are giving too much coverage to this plum.
surreymac – the 'plum' you are referring to is MAKING IT HAPPEN. EYE are simply reporting it – which is in OUR interests to see what is being claimed.
He is achieving his goal – for all the wrong reasons – but at the end of the day some other plum once said that there is no such thing as bad publicity. He obviously subscribes to that idea.
So – do your bit to keep him out of the press – MAKE IT HAPPEN YOURSELF! ;o)