Online agents struggling in Greenford and surrounding areas
The recent announcement of the departure of Purple Bricks CEO Michael Bruce underlines the trouble online agents are having in an unforgiving industry.
It was with much fanfare that Purple Bricks launched in the UK back in 2012 vowing to disrupt the current estate agency business model of bricks and mortar locations and personal relationships. With the backing of private capital, they invested millions into advertising to aggressively promote the business and gain market share. In 2015, they floated the company on the stock exchange and it soon soared in value to over £1 billion, it seemed they could do no wrong.
However, things soon began to fall apart. Following Mark Zuckerberg’s now-famous motto of ‘move fast and break things’, helped establish Purple Bricks into a recognisable brand, but it failed to convert this into market penetration. Recent research puts online agents’ market share at just 7% across the UK. Much of this has to do with what online agents are actually offering; once you peek behind the curtain of impressive ad campaigns and branding, you’ll find things aren’t all they’re cracked up to be. It seems upfront fees and a lack of meaningful human connection during what is likely to be one of the significant purchases of a buyer’s life failed to impress the public.
In the interim years, despite ploughing millions into advertising, Purple Bricks have only managed modest profits in the UK. That didn’t stop them continuing their aggressive expansion campaign overseas, launching in both the US and Australia. Ventures that were a step too far. Now only after three
The turmoil has cost the CEO Michael Bruce his position and the company’s shares fell 12% on the news of his departure, following a steady decline that now values the company at £400 million, a long way from the £1 billion just a few short years ago. Things are going to continue to get worse before they get better, with UBS claiming the company will have to raise £100 million through fundraising to pay for the recent losses.
SAB Estates View
While we can understand why those selling their homes can be enticed by the idea of saving money on agent fees, we think sellers and buyers need to know exactly what they are, and what they are not, getting for their money.
Many online and hybrid agents are able to offer discounted prices to sell your home or let your property by not having a physical brick and mortar office. However, this discounts the value of being able to come in and sit with your agent, and talk to someone face to face whenever required.
Also, these discounted fees are often paid upfront before the agent has even provided a service. What incentive do they now have to sell your property or rent your second property? If they fail to sell your property, they still get paid and it is you the consumer who now has to find and pay someone else to sell your property. It’s a system with limited appeal and at SAB Estates we believe our clients value the personal relationship they have with us and the knowledge that we are compensated only after we have delivered a fantastic service.