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Steve W.
Steve W.
Riverview, NSW
5 Likes
1 Followers

I'm thinking of using Purplebricks to sell my house when they start in Sydney next month. They appear to do everything a traditional agent does and I've estimated it would save us about $65,000 in fees. Are there any catches, seems too good to be true?

4 years ago

Responses

Steve. Hello. I have read a little about Purple Bricks starting up in Australia, but unless you are talking about a multi million dollar property, real estate commissions are no where near $65,000
How do they suggest they will "save" you this much. ????
Please give me a call if you want any seriously professional advice.
Regards
Ken Olds
1300 ASK KEN
finance@AskKen.com.au

Comments

Ken. Thanks for your prompt response. I believe my property is valued at between $3.5m and $4m. I think agent's commission is around 2% and Purplebricks are quoting about $5,500 including the auctioneer's costs, thus the $65k potential savings. Seems like winning lotto to me!

Steve, Hi Again. Thank you for your additional information. Firstly, let me say I am not an expert on the Ask-It platform, so I am not 100% certain if this becomes a private or public reply.

That said, and given the potential value of your home, I can start to understand how the figures you have mentioned have been calculated.

Please keep in mind I am a Mortgage Broker and not a Real Estate salesperson, however I would simply pose to you a question of "Do you want to make money, or do you want to save money" ?

My understanding of the Purplebricks platform is that you simply "rent" some internet space from them and then do the sales job yourself. Ie, You run your own Open Homes, you have to meet and greet all prospective buyers and basically sell the home yourself without a good inherent knowledge of what the market place is currently doing. A skilled Real Estate Agent, will be able to do all this for you and be potentially aware of suitable purchasers and 'squeeze' them for the best sale price that can only work in your favour.

As I said, I am not a Real Estate Agent, but I do have a very good friend who operates an L J Hooker Franchise. We operate on a non monetary shared referral basis given that we reside in the same street and have known each other for almost 10 years. He would be more than happy to share his knowledge with you on a no obligation basis should you wish to have his details.

As with myself, conversations come free of charge and he would be happy to give you some advise around the best methods of marketing your property to your advantage (well beyond an internet rental service).

Back to Purplebricks, if you are prepared to go down this path, then I would investigate a full on 'do it yourself' sales campaign. You may as well save that additional five grand and not be any worse off.

As mentioned, I remain uncertain to the privacy of this reply on the Ask-it platform, so it would be great if you could provide me with your personal email details to discuss further.

Beyond your chosen method of selling your existing home, I would be very happy to discuss your future finance needs.

Hope to speak soon

Best Regards
Ken Olds
1300 ASK KEN
email: finance@AskKen.com.au

Steve,

Great question.... Purplebricks seems to be a great platform and a positive 'distrupter' to the normal way of buying and selling property here in Australia...

My company lists and sells hundreds of properties a year on the big portals with local agents and whilst I love working in this traditional way, I think the low fixed fee and full transparency part of their model is a positive move for our industry and for my personal property transactions I will be using this platform.

I agree with Ken, $65k seems high (unless you're selling a property worth about $3mil using an average 2.2% commission rate) but from what I can see there isn't a catch..

The only other consideration with going with an established local agent is they typically (well the good ones do) have a database of qualified buyers... As long as the purplebricks agent has a track record & database you should be right..

Anyhow mate, good luck with the sale and if you do sell it, check out Thirdi Group (thirdigroup.com.au).. With you being cashed up I'd love to show you our apartments in Sydney and Newcastle as they are a great option for your next home or investment 😉)..

All the best and have a great Christmas & NY!

Hi Steve
Purplebricks have entered the market as they offer a variation on the traditional sales model. Whether it's all that vendors want, and deserve, is up for the market to decide. For my money (literally), I continue to recommend a truly independent vendor advocacy service. It's not well recognised but having been in professional finance plus property advice for over 22 years, there are only rare occasions when I couldn't endorse it.
Saving fees is great, but it's only one of the many vital elements of a great sales outcome and should NEVER be the primary factor in your decision making.
Cheers, Wayne

Hi Steve,

I am not clear as to how you arrive at a savings figure of $65,000

My suggestion is that you draw up a battle plan.
1. Start with a Realistic Price you want to achieve
2. Time frame by which you want to sell the house.
3. Expenses including agent's commission
4. Decide if you are going with an Open Agency agreement or Exclusive, there are Pros and cons.

When you have that you can then interview your local real estate agents and figure out who is most likely to help you achieve your goal. That's what I'd do.

Regards,
Bulelwa Freer
0414 973 236
freerbg@optusnet.com.au

Hello Steve,
I am a professional finance broker and I always recommend that clients look for a real estate agent that commands the highest commission rate to sell their home. I follow my own advice in this regard.
When I am interviewing agents, prior to selecting the one to sell my own property, I always reject the ones that try to get me on price (lowest commission rate). What is going to motivate them to sell my home rather than another home on their books if the commission rates are all the same?
I choose the one who has the self belief to charge a high commission because they know they are worth the money.
I then offer to pay extra (a percentage) if they achieve a sale above their lowest estimate.
You don't think they are then motivated to really work hard to achieve the best possible outcome, knowing it will benefit their hip pocket??
Let's take your home as an example.
If you sell it through Purplebricks for say $3.6m you save the $65k figure you mention.
If you get the best agent in the area sell it for $4m, and he charges you $100k commission, you end up with $3.9m
My parents always taught me not to be penny wise and pound foolish.

Comments

Thanks Stephen.

I did adopt that line of thinking myself initially but changed my mind as it required me to that the agent getting paid the higher commission is going to be able to sell for a higher price. If the agent could sell for an additional $400k, the agent will get paid say $80k versus $72k. Not sure an extra 10% will require them to die in a ditch for me. If I put the property to auction, I would hope that the same bidders would show up and bid and I should (atleast hypothetically) be able to get the same price.

Both of my last homes sold within a week of listing and I remember thinking I was paying a lot in agency commission for not a lot of work. I also researched Purplebricks in the UK and they are now the third largest agent with prediction they will be the biggest by the end of 2017, so they don't seem like a "fly by nighter".

I guess only time will tell. Think I will give them a go (but will also speak with other agents to get their views) and will let everyone know what the experience is like.

Hi Steve,

My name is Luke Pervan and I am the National Sales Director for Purplebricks Australia.

I would be more than happy to have a conversation about Purplebricks.

My email is: luke.pervan@purplebricks.com

Thanks
Luke Pervan

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