What is a commission?
It is a subject that has been the topic of some intense conversation on social media – with Purplebricks co-founder Kenny Bruce being rather assertive on the subject.
There is, he says, a “HUGE difference between a fee and a commission.
“We offer the UK public a choice – do they want to pay a fixed fee of £849 inc VAT outside London, or a huge commission of 2% plus VAT.”
In more sums, Bruce says that high street agents “still charge 2% plus VAT to sell a home” despite the portals having made it easier.
He also says that homes have doubled in value since the advent of the portals.
1999 – £120,000 @ 2% = £2,400 plus VAT.
2017 – £209,000 @2% = £4,018.
Bruce asserts: “Surely that’s not fair on the UK public. What are they doing to deserve that increase in commission? A fair flat fee is the only fair way.”
As you can imagine, the claims have not gone uncontested.
On Twitter, Yorkshire Prop Guide asks: “A fair flat fee is the only fair way, but we’ll charge you whether or not we sell your home. How is THAT fair?”
Another says: “2%!? Would love to be getting anywhere near that.”
PeeBee attempts to dive in to the debate only to find he has been blocked by Kenny Bruce – “to which I disrespectfully say diddums”.
Undeterred, PeeBee questions why Purplebricks charged £599 in 2014, and £819 today. This he says is an increase of 41.74% in under four years.
Meanwhile, over on Facebook, Andrew Walker takes Bruce to task: “It doesn’t matter how you try and dress it up. Purplebricks do charge commission. Whether they sell your property or not, you still have to pay them commission. They call it a fee but according to the dictionary it’s one and the same.”
Bruce disagrees, saying he gets his definition from the English dictionary. “We always work with the proper definitions . . . We have saved customers many tens of millions of pounds from unfair commissions since 2014 and we will not apologise for that.”
Walker concludes the exchange by saying that he will get the Oxford English Dictionary to change its definition.
* According to Oxford Dictionaries, commission is “A sum, typically a set percentage of the value involved, paid to an agent in a commercial transaction”. Other definitions include: a “sum of money that . . . can be paid as a percentage of the sale or as a flat amount” (The Balance); “a sum of money paid to a salesperson for every sale that he or she makes” (Collins).
Comments (22)
What incentive is there for an LPE to get a completion? As there is only one per area and all that extra work at listing properties (according to PB) they seem to have invented a 72 hour day clock.
This just goes to show how little KB knows of being an Estate Agent (he is only a lister after all…) I have had three recent sales where if it had not been for many hours of work put in, the deals would have fallen through. I would love to see how a LPE would deal with a sale where there is part freehold/part long leasehold interests, with an underlease to a third party, and work with all four parties to progress the sale.
Another sale, again leasehold, where we had to work with a difficult management company to extract information, which was not provided in the management pack, as well as a particularly tardy conveyancer. In all three cases we achieved the right price for our clients, but that required a lot of man hours.
We work ****** hard for our fee, and provide an excellent service to our clients. Never once have we had a complaint about said fees, as they appreciate the work and costs involved.
Oh and by the way, have you seen the quacker’s comments on LSE this morning…
http://www.lse.co.uk/ShareChat.asp?ShareTicker=PURP&share=purplebricks
The fact that there are serious journalists including Reuters, the FT and the BBC reporting this story (and similar stories including portal juggling etc) again, is that a growing number of agents HAVE been making noises, have taken a stand, have stood up for the consumer and good agents and taken a stand against misrepresentation and the bovine manure that some companies peddle. This would not have been possible without the likes of PIE and the other pubs taking these stories seriously and airing them. A huge thank you is due to them who have had to put up with me and others nagging and badgering for the past three years. Thank you.
Todays’ headlines have been a long time coming and will hopefully mean that the public might be better served, better protected and better informed over the coming months and, that decent agents can start competing on a level playing field with their individual USPs’ for the benefit of their clients.
In our local area of South East London, no high street agent manages to get near a 2% fee, only Foxtons attempt this and they do not do well here at all – most agents are between 1% – 1.5% depending on value of property. PB selling 50% of their stock is the norm for local high street agents and local figures on Rightmove show that only one high street agent achieves higher than this. The issue I find with PB is you pay their fee up front so doesn’t matter whether they sell or not where high streets only get paid on completion. PB are not generally successful here. Go for a hybrid estate agent that offers full service but not the overheads of a flashy office with young inexperienced staff I would say….
Hasn’t anyone realised what PB, Bruce & Co stand for? Misleading
It will be interesting to see if they are named in the BBC Radio 5 programme at 11.00am on Sunday 4th May.
Average fee in the West Midlands/Warwickshire is about 1%!
Who gets anywhere near 2% these days even in London?
Time for some honesty Property Industry Eye! Do you not research or question the articles you “write” or have PB quietly acquired you!?
I am so fed up with the hype and general level of BS!
Mr Hills
May I please suggest you read this article again.
This time – much s l o w e r… and with your eyes open.
Give me a shout if the penny hasn’t dropped at that point.
I’m so grateful Peye providing me with my morning’s entertainment. Sadly the inability or unwillingness of either the corporate sector, the independent sector or indeed professional bodies such as the NAEA to get together and mount an effective advertising and marketing campaign specifically targeting PB (as they do to the high st.) is the Achilles Heel that PB and other disrupters exploit so readily. All those PB detractors who appear on here should get their act together and do something practical rather than whining about them on platforms like this. Fight fire with fire….you’re being bullied…man up for goodness sake.
stillhaveapulse81
Interesting comment.
Firstly –
“…the inability or unwillingness of… professional bodies such as the NAEA to get together and mount an effective advertising and marketing campaign specifically targeting PB… is the Achilles Heel that PB and other disrupters exploit so readily.”
NAEA etc will do NOTHING about PB – that is already written in stone. Has been for some time now.
In fact, as is more than clear, NAEA actually appear to like PB – a lot. PB and their majority self-employed LCTs pay them a few quid each year subscriptions and ‘invite’ Propertymark’s MD to talk at their conferences. They appear to be a match made in Heaven.
Secondly –
“All those PB detractors who appear on here should get their act together and do something practical rather than whining about them on platforms like this.”
Thanks for that, pal. We will remember that when we’re not all doing our own bit at our own expense (whether that be time, trouble or monetary expenditure/loss) so as not to be accused of cartel-like behaviour.
Lastly – and back to point one, really, as you encompassed corporate and independent sector Agents in with the professional bodies but I wanted to pad this out a bit… you seriously expect Estate Agents to group together under a single banner? Were you ever in the industry?
You have more chance of sewing a button on a f@rt whilst juggling jelly doing the hokey cokey in a 5000 gallon vat of scalding cats.
In a gimp mask.
Thanks for my entertainment. I think I’ve just laughed a nad off.
Mr Bruce, like PurpleBricks generally, are constantly full of contention and hypocrisy… “We offer the UK public a choice – do they want to pay a fixed fee of £849 inc VAT outside London, or a huge commission of 2% plus VAT.” So in and around London – where Mr Bruce knows peoples homes are worth more and they have more money generally – his agent charges are £1199!! Justified by what?
Do viewings take a third longer in and around London? Does it take them a third longer to get through conveyancing? Or do you just take advantage wherever possible?! Any member of the general public with any sense would see an immediate lack of integrity there – if you have one fee, then have one fee!!!!!
Also – exactly when did parts of North Hertfordshire become London??? this would not be taking advantage of prices surely…..
They tend not to let Kenny Bruce out much as he’s a bit like Ruprecht in Dirty Rotten Scoundrels.
That’s very funny!
I know where he could stick his cork too!
Unfortunately I don’t get an Audience with Mr Bruce, but perhaps I can ask one of our journalist friends do me a little favour and ask him a question on my behalf.
” There is a consensus that people up and down the country should not pay unfair fees or commissions and as such does he feel it would it be “fair” when Purplebricks are instructed to sell a property but are unable to find a buyer within a reasonable time frame (say 6 months) that they refund the fee the vendor has paid to Purplebricks? ”
“if not could he explain why?”
Just asking.
I have Tweeted Mr Bruce this very question – you never know he might actually reply……… https://twitter.com/Dmax2000/status/959341397089406977
s://twitter.com/Dmax2000/status/959341397089406977https://twitter.com/Dmax2000/status/959341397089406977
‘Angels dancing on the head of a pin’.
Except that they ain’t no angels.
House prices have maybe gone up but so have fees. I can tell you that the professional photos, service etc gets the best buyer for the seller. Some other DIY agents lose their clients money. The terrible thing is they get away with it. The seller has no idea how many thousands they lose buy not getting the marketing they need. For sale by owners do a cheap diy service. Wonder if they always get top price for their home lol.
PIE article with tweets only from the PB detractors and trolls and post regularly on here, it’s a bit laughable to be honest.
As balance Dom, can you post some tweets from PB supporters please
Pb should have taken more then 5% of market by now. The industry is used to giving that away from all the new agents who set up with 0% contracts and then close 6 months later.
It’s the fake payanyway model that blesses me. Forgive them Lord for they know what they do. #fake 2% claims. Thought average was 1.1 %
Stealing this line, @Bless You. It’s good and hits the nail on the head.
Actually, the reason why PB call it a fee rather than a commission is that you cannot charge a commission for around 50% or so of properties that DO NOT COMPLETE!
Example
PB. Sorry, we did not achieve a completion but you now have to pay us £849, plus £300 viewing fee, plus £360 deferred fee payment.
User. So I have to pay you £1,509 for not selling my home?
PB. Yes but those other successful sellers saved £1000s!
User. Really, what about the 50% who now have to pay two agency fees?
PB. Tough sh1t.
User. I wish I had known that an average no sale, no fee commission for 2/3rds of the UK was less than £2000!