So, news on the street is that the next charm offensive being paraded on our TV screens by Purple Bricks (PB) will be a direct attack on the traditional estate agency model, namely the charging of commission on the sale price of your property. Framing their new buzz word 'commisery', PB's adverts will run for the next three months and hope to do much damage to the traditional norm of charging a % of the sale price, stating that their fixed price fee is the better option.
We disagree, naturally, and here's why.
What PB's adverts fail to tell you is that ALL of their customers must pay an up front, non-refundable fee of £849 or £1,199 if you are in London (we don't know why it should cost more in London either) regardless of whether there is a successful sale.
That’s right: you pay their fee in full whether you sell or not.
What these ads also fail to tell you is that their service is primarily a listing service, not an estate agency service and if you want an estate agency service, the add ons cost money.
Yep: you pay extra for someone to do your viewings. Extra for someone to negotiate for you. Extra for your transaction to be progressed to completion. The list goes on.
You also pay extra to have a dedicated agent and if you don’t pay the extra you are doomed to a transaction full of call centre misery. I myself recently called to check a chain (that PB should have called me to check!) and whilst the young girl on the end of the phone was very sweet, the fact that she didn’t know whether her agency represented the seller or the buyer was a huge concern. Suffice it to say that this particular file has been flagged red in our office and will be watched very closely.
The industry is already bristling with anger and outrage at this direct attack, with one savvy commentator calling on our major portal, Rightmove, to even the score by publishing PB's figures, that apparently show 643 properties taken down by PB this last month alone following an unsuccessful spot on the market. If correct, fees earned by PB are said to be in excess of £545k for these failed transactions (and this is without accounting for those being charged at the higher London price). Indeed, if these figures are to be believed and are a true representation of PB's average fall through rates, this equates to earned fees for unsuccessful sales of around £6.5m per annum.
You read that right: a possible £6.5m per annum paid out by people that didn’t successfully move home with PB. If these figures were even only half right, at £3.2m it’s a lot of wasted money for sellers and a lot of easy money for PB: no wonder they have the budget to bombard us all with extravagant advertising campaigns.
Given this, their swipe at traditional agents that only charge a fee on completion of a successful sale, is pretty audacious. No one in their right mind wants to pay for something they don't receive but PB don't worry about any of these negative statistics in their big budget advertising campaigns and instead focus on how to attack their competitors, always bad form. They are throwing around the idea that commission based fees are a rip off and yet they aren’t accounting for the facts which are:
1) Commission based fees are only payable on exchange or completion of your sale. Most agents are therefore no sale, no fee. This leaves the onus very much on the agent to ‘make it happen’ in order to get paid, a great incentive to keep them motivated.
2) Traditional agents like us carry out all of your viewings, negotiate your offers and progress your sale as part of your fee. This means we are taking a huge risk – we could do all of the work right up to completion only for you to change your mind and not move and yet there will still be no fee payable.
3) Your transaction will be looked after by an allocated agent with a traditional agency, not a call centre.
So you see, the idea that PB are charging less for the same service is completely wrong. Their service is very different to that of the traditional estate agent, it is quite literally like comparing a camping trip to a 5 star holiday: both make very different promises on what they can deliver and no one is ever under any illusions that they will find a marble en-suite in their tent. PB most likely has their place but not as our competitor, their offering is distinctly different to the comprehensive blood, sweat and tears service that hard working agents like us offer.
PB’s definition of their new word ‘Commisery’ is:
The misery you feel after you have spent thousands on commission but got nothing more for your money.
But what about the misery of paying £849 or £1,199 for absolutely nothing? And this is without factoring in the time you have taken to carry out viewings, time is money after all, every minute spent working on your own sale has a cost to you. Worse still, what if you go as far as finding your onward purchase, paying your survey and getting almost as far as completion only for something to go wrong? Isn’t is bad enough that you have to pay abortive solicitor costs and are lumbered with survey fees and other incidentals without also having been hit with this additional up front estate agency fee?
We think so and so we give you our new word, ‘Preparrassment’:
The embarrassment you feel after you Prepay a non-refundable up front fee to an online agent to sell your property - only for your property to remain unsold.
Whilst it is fashionable to loathe estate agents as much as traffic wardens, the fact is there are good agents out there and they do earn their fee. Our service for instance includes everything you could possibly need to move home with no upfront charges whatsoever.
When all is said and done, you will know your own needs when it comes to selling your home. If you think you have the time, resource and patience to see your sale through to completion and feel confident that you can chase not only your sale but also the ones around you, then by all means find a listing only agent but be prepared for losing your fee if the market goes against you and you don’t achieve a sale. If on the other hand you want to get a full estate agency service from start to finish with support, experience and above all time for your transaction, take on a traditional estate agent instead: those extra few pennies will be more than worth it when you move into your next dream home.
Be a savvy seller and select an agent that only gets paid if your sale completes successfully.