Truth about Purple Bricks
10 things Purple Bricks don’t want you to know
The “misery” when a company does not disclose the commission for referrals to other companies
1.) Purple Bricks latest company results reported that its average revenue for UK customers was £1138. So, with their stated fee of £849 in Scotland, this equates to an additional £289 in commission for additional services more than double the fee Scottish House Move charge.
2.) Purple Bricks want you to defer their fixed fee of £849 as their salespeople are financially incentivised if you defer their fixed fee. Purple Bricks marketing campaigns are all focused on the "misery" sellers face by having to pay commission to High Street Estate Agents yet Purple Bricks blatantly make substantial commissions from compulsory referrals to many third party companies. We believe this is completely double standards as many High Street and Online Agents don't take any commissions for simply referring you to a third party. If you defer the fixed fee and your property has not sold, you need to pay the fixed fee after 10 months. This is not how “proper Estate Agents” operate.
3.) When you defer the fixed fee, you must take Purple Bricks choice of legal conveyancer. Purple Bricks earn up to £360 on a single legal referral which is equivalent of a new fixed fee of £1209 adding a whopping 42% to the advertised £849 fixed fee. Many of these legal conveyancers and Purple Bricks local property salespeople do not declare the level of commission that is actually paid to Purple Bricks. If you refuse to take Purple Bricks choice of conveyancer with their deferral option, you will have to pay a penalty of £360, in effect the commission Purple Bricks will lose. You can decide if this is “commisery” or an attempt to be less than transparent with the public.
4.) Purple Bricks also want you to take their choice of Home Report and mortgage companies as they earn substantial commission from a number of chartered surveyors and mortgage companies for referrals and again the level of referral commission is not disclosed to you.
5.) Purple Bricks so-called “local property experts” are not employed by Purple Bricks as they must operate their own independent companies and only do work for Purple Bricks under a licence and sub-licence agreements. Make your own conclusions why Purple Bricks operate this structure which avoids National Insurance, Holiday Pay, Sickness Benefits, Maternity Pay and Work Place Pension Contributions, all costs that professional “proper Estate Agents” must live with and have to pay their own local agents.
6.) Purple Bricks salespeople are paid for listing your property and not for actually selling your property. You need to ask yourself what incentives there are for a salesperson to sell your property if they have already been paid. In effect, Purple Bricks model rewards failure and not a successful sale. It makes no difference financially to a Purple Bricks salesperson if your property sells or not. This should raise concerns for any sellers who are serious about getting their property sold. Purple Bricks are yet to disclose to the city how many properties they have actually sold from all the properties they have listed. Purple Bricks are unwilling to share this information with the Estate Agency industry and the general public for reasons best known to themselves.
7.) A number of Purple Bricks salespeople/self-employed agents are Estate Agents who failed to make the grade at many high street Estate Agents. Purple Bricks salespeople don’t earn a salary. They only earn money when they list your property or sell you additional services. Without sounding cynical, expect a hard sale and the promotion of additional services.
8.) Purple Bricks have been exposed on BBC 1 Watchdog for their sharp sales practices and some of their misleading TV adverts have been banned by the Advertising Standards Authority. Purple Bricks have also threatened allAgents, one of the UK's largest respected Estate Agents review sites, with legal action if they didn't remove all their bad reviews - bullying tactics at its worst. Purple Bricks were named the worst rated Estate Agent in 2017 by allAgents for their poor reviews.
9.) Purple Bricks will only advertise your property for 12 months, so if your property hasn’t sold by this time you will face another fee if you were to continue marketing your property with Purple Bricks. All this is conveniently hidden away in the small print and again is not how “proper Estate Agents” operate.
10.) Purple Bricks don’t employ professional photographers. You have to rely on the salesperson who may not have been trained in professional photography or at best have been on a one-day crash course. This again is not how professional “proper Estate Agents” operate.
We have asked Purple Bricks to respond to the above points in December 2017 so a balanced view can be taken by sellers.
Purple Bricks response (No response as yet!)