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Purplebricks has copped endless hate since entering the Australian market: for having a poor business model, for misleading and getting substandard results for vendors and for recruiting “bottom-feeder” agents. But a recent sale in Victoria, where the property sold for $380,000 above the reserve, might suggest the criticism is not exactly warranted.
Vendors Kerrie and Phil Logan from Rowville in Melbourne chose Purplebricks agent Salvi Galati to sell their home because Mr Galati was “very personable and returned our calls”, and “the pricing was right”.
After 25 days on the market, the property, listed at $1,050,000 to $1,155,000, sold on auction for $1,480,000 where its reserve price was $1,100,000. The auction attracted 31 groups on the day and in the 40 minutes it took to conclude, it had more than 100 bids.
Mr Logan was thrilled with the result.
“It was quite outstanding,” he told REB.
“Salvi is an absolute operator. He gave us a very good breakdown prior to what was going to happen and led us all the way through, and came up trumps at the end. It was absolutely what we wanted.”
On time
Mr Logan said that it was a positive experience.
“When you are not sure of the process because you don’t buy and sell every day of the week, you want somebody that is available when you want them.
“Salvi was there like a rock to be able to bounce ideas off and explain auction formalities that we didn’t know about because we hadn’t been to auctions before. I would without hesitation recommend Salvi.”
Mr Galati told REB that he had a sense that Mr Logan was pleased with the deal.
“He specifically pointed out my negotiating skills in regards to it, just in terms of talking to people,” Mr Galati said.
“He thought that was quite unique. But it simply goes to show that when you put in place an effective marketing campaign, you can get a great result. We focused on the property’s unique features — which it had — and at the end got the Logans a great result, and saved them at least $27,000 in fees.”
Eventual
Mr Galati has been with Purplebricks since July last year.
“I’ve been in real estate a little while now and I saw that things had to change eventually,” he said.
“There is not too much transparency in the current model, there are a lot of disgruntled vendors out there, and, as we all know, no one actually trusts a real estate agent as such. Certainly from my perspective, I was aware of that.”
Mr Galati also said that the market changing is loading pressure onto agents.
“The beauty of Purplebricks, I believe, is that I am able to focus solely on my selling,” he said.
“I can use their platform in terms of being able to just focus on my vendors and purchasers because I can focus virtually 100 per cent of my time on them, rather than worrying about trying to prospect looking for my next listing.
“Working with Purplebricks has been great. Like any other company, it’s had its teething problems and they will cop a lot of flak from everyone else because they are totally changing the industry. It’s like what Uber did to the taxi industry is what Purplebricks is now doing to the real estate industry, so there is a lot of pushback from a lot of traditional agents who are ultimately charging huge fees. Whereas I believe that what we charge is fair value for what people get.”
- Surely that sort of sale - 30% over the range is an indication of under quoting - especially in the current market???
Might check with Consumer Affsirs...0 - Okay, so let me try and get this straight. If some of the more factual statements here are indeed reliable, then it seems that a relative of the vendor purchased the property. It's not unheard of to have family members compete in an auction scenario, as it is intended to ensure that in a transparent method of sale that auctions are generally identified with, the purchaser pays "market value". It also seems that the vendors expectations were $1.5M plus. It also seems that the vendors rejected a contract through another agent for $1.53M, before running with PB.
So what does all this tell us - it tells us that the process was just that, a tool to get the family member to pay market value, which would presumably avoid any claims that the process was unfair. When you are simply going through the process, you do not need an expert realtor, you need a transactional agent simply to execute the process, so it might as well be the cheapest.
What else does it tell us - it tells us that the agent, despite his claims of transparency, has deliberately under-quoted and completely coloured the transparency of the process.
What else does it tell us - that the vendor sold for $1.48M, $50,000 less than he would have achieved if he had accepted the buyers contract with the previous agents.
In summary, it is hard not to conclude that we are not dealing with a bunch of "geniuses" here and that the twaddle PB puts out there as it's positive points of difference is just that - twaddle. Yes, you do get what you pay for, and when you opt for PB you get a transactional agent focused on turnover, which PB are failing to achieve also.
0 - Why is this such important news for REB to devote time and space to this. ......I consistently get results exceeding owners expectations and have done so for 47 years. - I did an auction in Hobart a few months ago. 2 independent Valuations were at $975,000 and $965,000 . I sold the property under the hammer for $1,330,000.0
- Nice work Hank. That's also 300k ahead. I wonder if the same hysterical commenters will call you out for underquoting?0
- Disappointed in REB for publishing such a load of rubbish.0
- One sale doe not define success.
This is the only positive result.
Purple bricks won’t survive as the customer service and care factor is non existant
0- And yet this customer said he and his wife were happy.
“It was quite outstanding...I would without hesitation recommend Salvi.”
0- Work for PB by any chance "see-er"0
- REB please ask Purplebricks to supply to you indisputable evidence that you can pass onto us your readers that the reserve price was actually $1,100,000.
If they cannot supply indisputable evidence to you their claim that "the property sold for $380,000 above the reserve" will have no credibility and there will forever be a strong air of suspicion that their claim is a fabrication.
It's always amazing how many agents will say to prospective buyers on a Friday afternoon before an auction that they don't know what a property might sell for or what the reserve is, but on Saturday afternoon they can brag to property journalists about how much above the reserve they achieved and how good they are.
I - and I'm sure many of your readers- will look forward to reading the evidence.
0 - Bricks fall fast......
24 % of their share price at close of the London Stock Exchange yesterday. Both UK and USA CEO's have fled the sinking ship.0 - So you're an Uber driver now...?
The difference is Uber provided a BETTER service.... Not cheaper.
Purple Bricks is all about the Cheap, and it IS costing owners money. This case is a perfect example given one of the Comments below. Its not what you pay, its how much is left in your pocket.
That's why Uber won. People didn't mind paying a little extra for better service and a better experience.
0- ...lol...she's being ironic...never mind, next time.
And you're nearly correct - the difference is Uber provided a BETTER service...cheaper. That's why Uber won.
0
- Really interesting to follow this thread. I see loads of agents looking outside the window screaming at Purplebricks and at the same time claiming they are not worried about them as competitors. Perhaps look in the mirror and not out the window and you'll see the reflection of a customer - yes CUSTOMER - stop focusing on yourselves and focus on your customer. Keep looking out the window and Purplebricks will get you every time. You're comments give our industry a bad name. I'm ashamed to admit they are right - you are commission collectors. GROW UP real estate!!!0
- RTD there's been so many 'cheap' competitors come and go over the years - we had one crew doing deals for a flat $7700 regardless of price. Anther lot doing deals for one percent which climbed to one point five percent before they went to the wall. Another lot offering all the paperwork you need to sell your own home for $770 - they're all gone.
We are heading into perhaps one of the toughest times real estate has seen in this country - they simply cannot remain profitable or regain any of the millions they have poured into advertising based on their model. Without exceptional skills agents just aren't going to survive.
The people who have the skills that it takes to present, price and promote a property correctly to ensure the vendor gets the best price ain't going to work for peanuts.
Have at a look at how they portray their competitors in their latest campaign - some slick dude with a fancy car taking selfies - and you're telling us to grow up?
Is that focusing on the customer?
Market forces will eventually see PB go to the wall in Australia - their culture from day one both publicly and internally is just wrong.
This article, quite frankly, is pathetic - there are so many holes in this story it's not funny.
“There is not too much transparency in the current model" - what is not transparent about the current model?
Here's the fee, here's the advertising budget - if we sell your home we get paid - if we don't sell your home we don't get paid. Pretty simple really.
This is not the taxi industry - homes don't have a fixed price. Skilled agents get better prices.
No one if going to 'Uber' real estate.
0- ...that a large part of MY marketing dollar is HIJACKED to promote the agent brand...NOT a good look0
- Very true and very well said ...0
- Being a local in the area for many years I do know this house. I was informed by another neighbour that the vendors always wanted $1.5m or above and from reading an earlier comment this was achieved.
So bringing it on the market at with a indicative price range of $1.05-1.155m is misleading. I wonder if consumer affairs will investigate? Finally the home was purchased by one of the vendors (there were 3) daughter. Hence keeping the home "in house". There was no divulging of the reserve so most were bidding blind.0
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