Purplebricks is launching a free brokerage service with add-ons – here's how it works

Online real estate agent Purplebricks has launched a new pricing structure that allows sellers to list their home without paying a cent.

It says the service will handle property valuation and sales negotiations, while also listing on any major portal – excluding Rightmove – all at no cost.

It also includes an account manager who supports customers through the process from start to finish.

Purplebricks previously charged a flat fee of £1,349 (including VAT), rising to £2,999 for those based in and around London, which was payable either in advance or no later than 10 months after the property was first advertised, even if it was unsold. .

Sam Mitchell, CEO of Purplebricks, said: 'The process for buying and selling properties has not changed in almost 200 years.

“It's a stressful and costly journey that needs to be simplified, and that's what we're doing today. Customers can now sell their house for free, without hidden costs.

'They get everything they need to sell for free, with optional extras along the way, and access to Purplebricks' expertise everywhere.

Earlier this year, Purplebricks was bought by its rival Strike, who took over its liabilities for a symbolic price of £1.

However, under the new strategy, the Strike name will be retired and replaced by Purplebricks.

Mitchell adds: “This is an important day for Purplebricks as a company. After a few rough years, the housing market is showing signs of life as we enter 2024.

“With viewings increasing and banks offering more competitive rates, we are confident that our new model will lead us to significant market growth.”

How will Purplebricks make its money?

Purplebricks hopes to make money by customers opting for the more premium services or optional extras.

For example, a Rightmove listing is not included as part of the free service. It costs £399 to pay for it.

There are other optional extras such as a premium listing (£125), hosted viewings (£899) and professional photos and floor plan (£699) available to sellers.

Purplebricks can also work with sellers and buyers to help them find the right mortgage deal and offer them conveyancing services.

Both services have referral fees, but it says sellers are under no obligation to use them.

It also offers paid packages. The Boost package includes professional photos, 360 virtual tours and a professional floor plan.

It also includes a premium Rightmove listing to get even more attention for your property. £1,499) also includes hosted viewings.

Meanwhile, the Full House offer (£1,499) also includes hosted viewings and mortgage advice.

Will it prove popular?

Estate agent costs in the UK are among the lowest in the world, but that doesn't mean this will stop some sellers from cutting their costs even further.

According to HomeOwners Alliance, the average real estate agent fee in 2023 was 1.42 percent of the final sales price.

That means that for a property selling for £250,000, an owner would have to pay an average of £3,550 of that amount to their agent.

But brokerage fees vary enormously and can be between 0.5 percent and 3.5 percent, excluding the additional 20 percent VAT you have to pay on top of that.

Someone selling their £250,000 house through an estate agent who charges a 3 per cent fee plus VAT could end up paying £9,000 in agency fees.

For those selling more expensive homes, even a fairly average fee of 1.5 per cent plus VAT (1.8 per cent in total) could eat up more than £10,000. Sell ​​a £750,000 property with that fee and the agent wants a £13,500 discount.

However, Purplebricks' free service is unlikely to convince everyone. In terms of stress, moving can be accompanied by grief and divorce.

The right agent can make selling your home relatively easy, but the wrong agent can cause problems, slow down the process and ultimately force you to lower your asking price.

At a time when homebuyers are enjoying 'the best market conditions in years' according to Zoopla and one in four sales are agreed at 10 per cent or more below asking price, many sellers may want the hands-on approach of a high price. street cop.

It also takes longer for houses to be sold. The average time it takes a seller to find a buyer has increased by three weeks, according to Rightmove, from 45 days this time last year to 66 days now.

Jeremy Leaf, a north London estate agent and former chairman of Rics, thinks it is unlikely that many agents will be concerned about the free service.

“If something sounds too good to be true, it usually is,” says Leaf.

'I can understand the appeal of a no-fee commission model for real estate agents, especially when the real estate market is active or when the sale of a house or apartment that is reasonably comparable to others is being considered and a going rate is being set for the price.

'In this case, however, it sounds like a fairly desperate attempt by PurpleBricks to revive its fortunes, especially as UK transactions are currently between 15 and 20 percent below last year's figures.

'In any case, established agents should be able to provide more up-to-date 'coal-face' information to sellers about what property is being sold and why, which more than justifies cost savings.

'In addition, good agents should be able to provide comparable evidence of their view of value not only to potential sellers, but also to their surveyors, and provide an effective sales progression service which should be especially valuable where chains are involved.'

Google search trends data on Benham and Reeves' current real estate agent search trends shows that buyers and sellers have increasingly searched for 'major real estate agents' over the past six months, with the term increasing by 24 percent between June and November. from this year.

Searches for the term 'best agent' have increased by 7 percent since June, also showing that those pushing ahead with their plans to sell or buy are looking for the very best to help them do so.

Meanwhile, the popularity of searches for 'low fee' is declining, having fallen by 47 percent in the past six months.

The number of searches for cheap real estate agents also fell by 22 percent in the same period.

Marc von Grundherr, director of Benham and Reeves, said: 'It is clear that in cooling market conditions the country's buyers and sellers are more interested in the proven expertise of good agents and less interested in the more hands-off approach of the agents. online sector.

'While traditional brokers tend to charge more compared to the do-it-yourself offerings of the online and hybrid sector, they are much better positioned to help negotiate the tougher conditions of today's market and their ability to provide a Bringing the transaction to a successful conclusion is definitely worth it. extra money spent in the long run.”