Should You Follow The Purple Bricks Road?

When you want to sell a house and move, there is one objective: get the best possible deal. Usually, it all comes down to money and how much an owner can get from the buyer. This is one reason Purplebricks has become popular in recent months. Their adverts claim that there is no commission, which means sellers don’t lose money in the process. But, like all things that seem too good to be true, the company isn’t entirely what it seems. Recently, a watchdog upheld complaints against the misleading adverts on television. So, should you walk the purple brick road? Here are the pros and cons.

Flat Fee
Although there isn’t a traditional commission split, there is a fee that customers have to pay. According to Open Agent, the amount is £2,250 for a private listing and £2,750 at auction. On average, the charge may turn out to be cheaper than the usual cost of commission. However, considering estate agent fees are around 1.3%, this can be as much as £1,000 extra for a private sale. The figures are based on a property selling for £100,000. The flat fee can be worse than commission, which completely flies in the face of the company’s unique selling point.

Nothing Upfront
On the other hand, supporters of the business model will point out that the fees aren’t upfront. That is to say, there is no need to pay anything for a lengthy period. The Purple Bricks website has the deadline of ten months or a whopping 300+ days. The stay does provide sellers with more flexibility because they don’t have to worry about the costs in the short-term. Putting debts on the backburner isn’t always helpful, but it can help you juggle your finances if you’re in a tight spot. Some real estate investors find this method to be incredibly handy.

The Competition
Sellers and buyers for that matter need to do their due diligence before sanctioning a sale. This has nothing to do with the company itself; mainly you as an individual. Human beings are easily persuaded – it’s one reason marketing works so effectively. Therefore, seeing a catchy phrase on TV or speaking to a friend may sway your opinion. Please don’t react until you’ve thoroughly researched the industry as houses for sale may be cheaper with a rival. Stranger things have happened. Go to three, four, even five vendors before picking one just to be sure the decision is correct.

Track Record
Studies show that the 77% completion rate for sellers isn’t entirely accurate. A banking analyst checked the numbers and he found that 33% of people who paid the fee didn’t sell up. And, the ones that did, the 14%, had to wait up to four months before they received payment. A bigger percentage has waited longer and is still sitting patiently hoping that they are going to get a welcome phone call. 

It’s early days, so there are still kinks, but it seems as if the bubble may be about to burst. Can you afford to pay higher fees and wait up to half a year for the payment?

No comments