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Controversial fixed fee network Purplebricks has said that its introduction to the market has already resulted in a dramatic change in the behaviour of commission-charging agents.
Purplebricks global COO Neil Tavender said that since entering the Australian market, Purplebricks has caused traditional agents to reflect significantly on how they operate.
“We have seen in some instances where commissions have come down from 2.5 per cent to 1.8 per cent,” the COO said.
“But obviously with the fixed cost models that they have, with premises and associated costs, that is not a sustainable future.”
Mr Tavender said that Purplebricks has been busy since it opened for business in Australia.
“We have sold over 4,000 properties in two years,” the COO told REB.
“The model that we have now in Australia is very different from across the rest of the world. The model in the UK and in Canada is a full upfront fee, and in the US you have a seller and a buyer component and commission there. What we have in Australia right now is a new model to the Purplebricks family.”
Earlier, Mr Tavender defended Purplebricks’ culture against allegations of it being toxic.
Far from it, the COO had said. In fact, Mr Tavender had said that Purplebricks staffers actually valued what the disruptor was doing for real estate in Australia and the savings it was making for customers.
“We have just recently done a staff survey with our local real estate agents and 90 per cent would recommend Purplebricks as a place to work and 85 per cent have said that Purplebricks has a great culture.”
But Mr Tavender did acknowledge some teething problems.
He said that it was normal to experience some frustration when in a start-up phase, more especially when you set out to shake things up a bit.
“We are a disruptor and we do obviously get commentary around that, but all in all, our people are very committed to the business.”
To this end, Mr Tavender said that Purplebricks has had to change “a few things” in its model.
“Commission being one of the obvious ones. We now sit here in a really good place with really focused and committed people who want to take the brand to the next level.
“We know that customers want that and we know that we get inundated with valuations each month, and we are the number one in some locations remarkably on listings and sales.
“So, we believe we are set up for success, and we believe that what we have changed with the model and how we reward is very much going to attract great-quality agents.”
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