Have any of you heard of Purple Bricks?
I'm not surprised if most haven't. Purple Bricks is a U.K. based estate agency.
They have recently announced that they will be expanding into the U.S. real estate sales market this year.
They have been around in the U.K. for 3 years now and have taken the market by storm. Other established estate agents hate them because they offer a low, flat rate listing fee instead of charging a commission....
Does this sound a little like Redfin to you?
The Purple Bricks business model is a great solution for folks in the U.K., I just wonder how it will work in the states. They have recently opened in Australia and are seeing a lot of success there as well. But again, will it work in the U.S.?
In the U.K., estate agents are not licensed, there is very little education available (and absolutely NONE required), agents in the U.K. are primarily paid salary with a little commission and bonus added on. Agencies typically charge .75% to 1.5% commission and there is no MLS system and no other form of cooperation between agencies. Each office only shows and sells their own listings.
Estate agents in the U.K. are looked at like the worst used car salesman stereotype you can imagine. They have bad reputations and are known for ignoring their clients, refusing to return calls and lying to potential buyers in order to get a sale. Basically all of the things that the NAR and local REALTOR associations have worked so hard to eliminate in the U.S.
So with that reputation in the community, Purple Bricks came on the scene. At it's core, Purple Bricks wants to overcome the reputation that estate agents have. They place high importance on excellent client experience and public review of their agents. They are not office based, all agents work from their home and avoid the overhead associated with large offices. That allows them to list properties for a flat rate well under £1,000.00 where the other agencies charge much higher commissions.
What are your thoughts?
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