Category Archives: online agents

There’s more to life than the high street

I’ve always been a bit of a Marmite character and todays’ trade press news has brought responses on both sides of the spectrum in the usual ratios.  I’ve been blessed to receive some wonderful phone calls, emails and DMs’ on social media wishing me the best of luck. Also, haters are always going to hate. They can only hurt you if you place a value in their opinion.

Like most new stories, you only get to see the tip of what is usually a much larger event and the factors leading to that event. This often leads to an understandable mix of responses based on the publicly available information, rather than the wider back story of the people or organisations involved.

Typical of some of the comments is from anonymous Property Industry Eye poster ‘IndAgent’. The questions and statements it contains be taken a number of ways and I felt that it was only fair that I gave a more reasoned explanation and a little more background to my decision. My answer to this question is repeated below.

Readers will know from a previous blog that I have a couple of health issues and these have lead to a number of events and decisions over the past few years and to my announcement last week.

I love estate agency with a passion but I also need to re-prioritise, down-size a little, be kinder to myself and reduce the number of properties I deal with to facilitate other needs and dreams whilst ensuring my clients receive the same high standards I have always espoused.

My other business Ocean3D.co.uk is growing quickly with some highly notable clients already on our books but, equally requiring more of my time and resources. At some point, when the time is right or, I feel that I can no longer look after my estate agency clients to the standards I set due to other business, time or health considerations I will stop listing and selling peoples’ homes. Until then, my clients’ needs remain “number one, not just one of a number.”

IndAgent

Morning Chris. Interesting move. Couple of questions…. What percentage fee/or average £ fee would you be aiming to charge clients?

If you aim to charge more than your local, High Street competitors, what are your justifications for charging more, whilst on the surface ‘doing less’ in the eyes of the general public.

As agents are marketing firms, selling a product, a house, if a client was to ask, ‘where are you advertising my property?’  What would your response be?

My reply:

Our fee is typically 0.25 to 0.5 % above our competitors. On a typical house sale in my area that’s a reasonable sum for a job well done (people still recommend us widely locally and on social media despite costing a little more than some but, equally less than others).

I’m happy to spend some time with you at your premises on how to raise fees if you want to employ me. My industry knowledge has been used quietly over the years by a number of firms and individuals including a good number with far higher profits and turnover than, I suspect, every poster on this forum.

I employ a number of USPs’ including 3D tours, magazine cover style main photograph, excellent social media presence etc. but, most importantly, a more personalised, experienced and friendly service that has a reputation for honesty, integrity and transparency. Heck, our sole agency contract even has a badge to prove it! http://www.plainenglish.co.uk/services/honesty-mark/honesty-mark-holders.html

As for advertising your home, we advertise on our website and the portal that we receive the most leads from, that is cost effective and value for money. We’re not on Rightmove any more because it was no longer a cost-effective way to market clients homes.

If all people are employing you/ your firm for is the fact you can say you advertise on Rightmove, you are simply holding yourself hostage of going with the lowest common denominator.

I’m not in a race to the bottom on fees or service, never have been and never will. We’ll lose some business and some of it will, no doubt, good business but, I’m looking forward to having a little more free time on my hands, developing my 3D tour business, not being beholden to a number of fixed costs and, moving towards my goal of buggering off to the Med’/ Caribbean with my partner as charter and private yacht skippers and hosts in a few years time. After 30 years of working in agency and a few health concerns, I need to reprioritise and re-focus.

Commisery for Purplebricks customers overpaying for tied solicitors by hundreds of pounds?

How much ‘commisery'(tm) might you feel if you had been encouraged or even required to use a specific firm of solicitors by your estate agent, only to find that over £380 was going straight into your agents pocket as a backhander from the solicitor in question? All perfectly legally of course.

In a written quotation from late 2018 recently sent to the author (see below) on conditions of strict anonymity, the firm quotes the fees for its professional services as £599 plus VAT (excluding disbursements). However, £382.85 plus VAT of this is paid straight back to Purplebricks PLC as a referral fee. So, exactly the same service that the firm of solicitors are charging customers £718.80 for, could be literally hundreds of pounds less expensive if they weren’t paying a huge introducer fee to Purplebricks.

Like many, but by no means all, estate agents Purplebricks PLC (stock market ticker #PURP ) make much of their income from referring people who buy and sell through them to a solicitor. It’s a perfectly legal practice as long as it is declared to the customer at the outset. The Property Ombudsman scheme

also requires that an agent informs the clients (the person selling) of any commission they make in this manner (see screenshot).

The quotation sent to the author makes it clear that this eyewatering sum has been correctly declared to the person being quoted. However, I have no knowledge of whether sellers are informed of how much Purplebricks might earn from a buyer who also uses the same firm, neither do I have any evidence to suggest that Purplebricks are not complying with the law.

Given that Purplebricks customers who choose to defer the typical upfront payment of around £1,100 are effectively required to use this firm of solicitors or pay an additional fee to ‘not’ use them, there may be some readers who might question whether a Publicly Listed Company that champions itself as a cheap way of selling your home but, who charge a fee even if they don’t sell* PLUS earn hefty backhanders from closely associated companies is very cheap at all.

*according to Jefferies, 49% of Purplebricks customers don’t actually sell. This has been strongly disputed by Purplebricks but the firm, who are notoriously litigious, have never supplied evidence to disprove the claim. Readers must draw their own conclusions.

QuotationORIGINAL - DO NOT USE - QUOTE-2.jpg

Purplebricks and its finance company have liabilities in perpetuity – Emoov collapse should sound alarm-bells for investors and business partners

“Consumer watchdog Which says 5000 sellers could be affected by the collapse of Emoov” https://www.propertyindustryeye.com/consumer-watchdog-which-says-5000-sellers-could-be-affected-by-collapse-of-emoov/ Source Property Industry Eye (PIE)

Purplebricks share price continues to nose dive
Purplebricks share price continues to nose dive

The collapse of eMoov into administration again demonstrates the fundamental flaw in the call-centre estate agency business model but, it also highlights a severe problem for Purplebricks and the few other remaining call-centre agents that has been alluded to before but, in a different context. Their contract binds the companies to deliver the contracted service in perpetuity.

As the PIE story demonstrates, Purplebricks* consumers who have paid for a service upfront or, deferred payment, are now entitled to that cost being refunded or, tfor the customers to enforce the contract for eternity. 

Given the consistent and dramatic share price fall over the past year, its continued ‘shyness’ in substantiating many of its bold claims (88% listing to sold by Michael Bruce CEO on Radio 4 MoneyBox) and, its inability to provide a shred of evidence to repudiate Anthony Codlings damning Jefferies report which stated that Purplebricks sells (completes on) at most 51%** of all of its clients that it takes circa £1,300 from on average.

This means that Purplebricks has an exponentially increasing exposure to clients who can contractually demand their money back/ enforce the marketing and support package in perpetuity (allowing for ever increasing Rightmove charges and LPE retainers etc. Either Purplebricks and its finance company must hold sufficient and ever increasing cash reserves to be able to meet this contingency or, they face a potential charge of selling services they do not have the ability to provide as contracted.

See also

https://blog.pdq-estates.co.uk/2018/05/08/are-purplebricks-set-to-repay-millions/

https://blog.pdq-estates.co.uk/2017/12/12/purplebricks-and-the-case-of-the-regulators-who-wont/

https://blog.pdq-estates.co.uk/2017/08/24/attempted-intimidation-by-a-plc-or-fair-comment/

*Stock market ticker PURP #PURP Social media @PurplebricksUK @purplebricksAUS @PurplebricksUSA

**believed to be a ‘safe’ conservative figure to keep Jefferies lawyers happy