The U.K. invasion continues apace
After making its U.S. debut in Los Angeles last year, U.K. hybrid brokerage Purplebricks today announced plans to set up shop on the East Coast by the end of June to service select counties across New York, New Jersey and Connecticut.
Earlier this month Purplebricks broke out of L.A. to bring its flat-fee model to the Golden State cities of San Diego, Fresno and Sacramento and has grown from 24 to 60 agents in California since its launch. Building on that momentum, the tech-focused brokerage plans to have 30 agents up and running by the end of the second quarter in the New York “designated market area” (DMA), Purplebricks U.S. CEO Eric Eckardt informed.
The British company draws on more than $60 million raised in a special stock offering to fuel its expansion and plans to spend more than $2 million a month on advertising. Florida and Texas are set to be its next targets.
The New York DMA — a catchment of more than 20 million people or seven million households — where commissions can reach as high as 7 percent and the average home price is around $560,000 — is a particularly suitable market for the Purplebricks flat-fee model, the company said in a press announcement.
Eckardt said he also has strong agent contacts in New York, where Purplebricks’ tech operation already runs from its Midtown Manhattan office.
In the U.S., the brokerage charges homesellers a one-time listing fee of $3,200, plus the “buy-side” commission. Sellers must pay the fee either upfront or at closing, regardless of whether their home sells.
Sellers then receive a multiple listing service (MLS) listing, a lock-box and for-sale sign, on-demand consulting from a Purplebricks expert and Matterport-powered 3-D home tours. They also receive access to a platform designed to approve showings, view feedback and communicate with prospective homebuyers or buyer’s agents — and even negotiate contracts.
Purplebricks works with homebuyers as well, offering a $1,000 rebate out of the buy-side commission toward closing costs. On its website, buyers can search MLS listings, schedule tours, message sellers — either directly or through a buyer’s agent — and submit offers.
A New York DMA homeowner selling a $560,000 home would save $13,600 with Purplebricks compared to paying the standard real estate brokerage commission of 5.5 percent, the brokerage claims.
Purplebricks agents each have their own territory, within certain ZIP codes. The company’s ideal recruit has at least five years experience, said Eckardt, who noted that agents have to get through a rigorous interview process and show a core competency for the job. Hires must also be a cultural fit and show an understanding of the importance of customer service and branding.
The typical agent may spend 60 to 70 percent of their time looking for leads rather than concentrating on servicing their clients, said Eckardt. With lead generation provided at Purplebricks, the company has high expectations for its real estate experts. The British company, which launched in the U.K. in 2014 and in Australia in 2016, finds that in Britain, agents sell around 20 homes a month and 10 a month in Australia. It will be looking for similar performance results from its agents in the U.S.
Article by Gill South