A former agent with Purplebricks in Australia, where property prices are falling at their fastest rate for five years, has released apparently damning documentation to a number of UK media outlets, including EYE.

If the documentation is authentic, then amongst it is an email from Kenny Bruce – apparently parachuted in to try and turn the Australian sales efforts around – asking its people not to go to the press.

Bruce’s email says: “I would ask that anyone considering sharing any information with external companies or people to think twice about it because you have all worked too hard to add any additional pressure to your colleagues when we are so close to making some improvements that will see you and your family thrive within Purplebricks.”

The email outlines a number of efforts being made, including: managing and reducing old stock; getting stock listed quickly; explaining the benefits of upgrades to customers; chasing back old appraisals and closing new appraisals.

“All of the above are second nature to top class real estate agents,” says the email which concludes “lots of love, Kenny”.

Purplebricks has told EYE it will not comment on any aspect of the apparent revelations.

They come from Jason van Straalen, a former local territory owner for Purplebricks in Australia, who said that the hybrid model will not work in a declining market.

The Australian market has been in boom for some six years, but now both prices and transactions are well down in key areas including Melbourne, Sydney and Brisbane.

Developers have been unable to sell units and are renting them out instead, and auction rates have collapsed.

van Straalen has said that he quit after earning less than half of what he was told he would earn. He has also accused Purplebricks of a bullying culture, as agents struggled to reach targets.

He says he worked 80-hour weeks and secured 67 listings in the 13 months he was there. However, he only managed to sell 20 of those homes.

He talked to the Australian publication, Financial Review, which ran the interview originally under the headline: “Inside the Purplebricks sweatshop: former agent accuses it of toxic culture”.

One specific accusation he makes is that the word ‘cancer’ was used to describe a sales assistant who was leaving. EYE has also seen what looks to be a copy of this email where the word was used.

He also says that share options promised after six months did not materialise.

Financial Review says that Purplebricks agents are expected to list at least eight properties a month, but claims to have seen internal reports showing that very few are achieving this.

Again, EYE has been shown this documentation, which appears to confirm the target and also to show that a number of LPEs made no listings at all in June.

If this documentation is correct, then Purplebricks’ listing volumes were just 27% of the target of 650.

Another email, from Purplebricks Australian boss Ryan Dinsdale, tells its people that the latest Financial Review story gave it no opportunity to respond – something that EYE has done in connection with this story although Purplebricks has not taken us up on the invitation.

Dinsdale says in his email: “You may have seen that the AFR have published another article today. Despite having a right to respond to such content we were sadly not given any opportunity by the AFR and the article was printed without any balanced, factual comment from Purplebricks. We have asked the AFR what their agenda is and why we were not respectfully given the opportunity to respond to this one-sided story.

“In any event, what is clear to me is this article simply highlights that there are a small number of former agents who don’t share our values as a business.”

An earlier email, dated June, from Dinsdale referring to another Financial Review story says: “We have sold more than 3,500 homes in Australia and you are excelling – this tells us we have a long term future in this market and we are a popular proposition amongst sellers and agents.

“To suggest that traditional agent models are better suited to a slowing market shows a lack of understanding of how Purplebricks works.”

van Straalen has now set up his own fixed-fee agency JVS Real Estate, which he says will be based on what he learned from his time at Purplebricks.

He says Purplebricks will have to change its business model “dramatically” if it wants to grow the business in Australia.

He told EYE that Kenny Bruce’s email in particular “confirms how much strife Purplebricks are in down under. It’s a mess you wouldn’t believe and they’re desperately trying to play it down.”

Not in dispute is that Purplebricks has appointed ex-Rightmove sales director Neil Tavender as chief operating officer, and earlier this month announced that it had handed him 500,000 share options at 0.01p each, with an exercise price of £2.87.

National sales director Brent May has departed by mutual consent, and Purplebricks co-founder Kenny Bruce will lead the Australian sales team pending a replacement.

The extraordinary turn of events in Australia begs questions of Purplebricks’ subsequent launch into the US market.

van Straalen told EYE that Purplebricks should have got its launch into Australia right first – and that this has been “anything but right”.

https://www.afr.com/real-estate/residential/inside-the-purplebricks-sweatshop-former-agent-accuses-it-of-toxic-culture-20180726-h135t7