Purplebricks - it's not what you save, it's what you don't get
There are plenty of fear-based articles out there about the Purplebricks / Comfree model, and I certainly don’t want this article to be another one. I will start by saying - I AM GLAD PURPLEBRICKS IS HERE. They actually help to redefine the low-cost/low-service end of industry and I think we will be much better off as an industry with a professional and well-funded company like Purplebricks taking control of that space.
Their arrival should serve as a warning shot to all the low-service Brokers and those fine purveyors of asterisk-riddled scams and kickback/contract programs. If that isn’t you or your Brokerage’s game, well then you should be happy as their customer likely isn’t your customer. And the best part is - unlike some of the Brokerage pretenders out there, Purplebricks knows who they are and appear more than happy to stay in their lane.
That’s right, as a modern kickass Realtor I want you to be happy too. Your path to enlightenment begins with an understanding of exactly how their business model operates and how they utilize smart marketing to avoid the real issues for prospective home sellers. It’s a model that I believe you will in time welcome to work with, and likely prefer over that of the discount Brokerages. Their model is pretty linear and easy for professional Realtors to work with.
They play on one emotion and they play it hard - fear. The fear of paying too much for a service that they deem is replaceable by a website and a call centre. A series of DYI’’sh ‘solutions in a box’ to help you through the most important financial decision of your life. A good angle to attack the low-service models, but in my opinion, one that horribly misses the mark of what the good people in our industry do.
While there are plenty of areas that I believe the Purplebricks model serves well, here are the top 3 areas in which I think they don’t do well at:
Full Market Exposure
Ask yourself a simple question - Does a house sell for its total value when it is only exposed to a portion of the available market? Hint - your answer should be ‘no’.
Purplebricks will tell you that they get maximum exposure for your home, however you need to look a little deeper into how our industry works. In my opinion there are two principal areas in which they come up way short with this claim, client notifications from their Realtors and lack of targeted individual marketing.
Here we go …
In the digital age of home buying, most serious Buyers align themselves quickly with a Realtor and start a robust Internet search for their perfect pad. It gives them that critical instant inside track. As new listings hit the local market clients are immediately notified and the hype for your home is happening. In real estate boards like Guelph and Kitchener/Waterloo a listing with Purplebricks never shows up. Technology has made things simple and most clients love the simplicity of having property that meets their requirements delivered right to their phone. Unfortunately, for those listed with Purplebricks in our area both agents and clients are hopelessly unaware of listings that do not fall in line with their daily search tools.
While everyone is excited to line up their showings for the hottest new listings, Purplebricks listings won’t even be on the radar. There is no way that adds up to a maximum sale price.
The second part of the market exposure issue is individual property promotion. We live in an age of limited attention spans and targeted messaging is essential for success. The best of today’s Realtors and Brokerages throw massive amounts of money behind their properties to promote them to the exact right buying audience. With all of the noise, merely posting to realtor.ca and other online platforms isn’t close to enough. Carefully crafted marketing strategies and retargeting campaigns for each individual property is, in my opinion, the only way to know you have done your best to reach the right buyers in the right way.
Less than a total audience reach can only equate to harming the final sale value of any home.
Two big problems that limit property exposure, but you won’t read about that on their website.
Local expertise - On the street knowledge, connections and advice
Easily the most underrated aspect of a home sale is the complete package that is provided by a true local professional. No matter how you spin it, this is something that a call centre to help with paper work or an out of area Realtor simply can not provide.
A well connected and reputable local Realtor is simply invaluable to achieving the best possible result of a home sale. You need that combination of tireless training and studying of what is happening in the local market right this minute. Different price points run at different speeds and often days of strategizing and re-strategizing goes into achieving the best possible result of a sale. I fail to see how the offer assistance program offered by Purplebricks could possibly replace that kind of true assistance.
While you do need help with paperwork, that is likely the least valuable part of this equation. A true local pro around here likely knows the buying Agent, knows how they work and how to put a proper deal together based on all of the surrounding market factors. In the uber-hot market of yesteryear Buyers lined up, but in the real world of 2019 the most profitable deals are carefully orchestrated by those with boots on the ground. The best deals don’t happen by accident, they are very carefully put together.
I believe the best case scenario always revolves around trust and the relationship you build with your real estate representative. The good ones have your back through the good times and the tough ones. They never lose sight of the ultimate plan and their signed obligation to you to protect your best interests at all times. Not sure how an out of town real estate hotline could achieve that kinda gold when it matters most.
A partnership renumeration environment
I think business should be earned, never paid in advance. That’s how the best Realtors and Brokerages work - they essentially become an invested partner in your best case scenario. Thousands of dollars and countless hours may be invested in the preparation and promotion of your most precious financial asset. The only chance Realtors have to recover those big investments is through a properly completed sale. I would say that creates an environment that promotes everyone working in the same direction to get the job done right.
To list your home with Purplebricks, they take their money up front. While you have a splashy purple sign and your home is scattered across the Internet, showing and negotiating the best possible sale now rests solely with the homeowner. Hmm.
They can take shots at the commission environment of our industry all they want, but I would rather have a hungry partner than a paid-in-full service helping me from start to finish.
While I could go on for days, and I likely will with this series of blogs, I feel I have made you now keenly aware of a few of the huge holes in this ‘miraculous’ new selling system. Remember, it’s a Comfree facelift we are talking about here. As previously stated, I love what Purplebricks brings as a low-cost option and should help clean out some of the ne'er do wells in our industry, but it doesn’t come close to providing what the best Realtors can. Regardless of what the marketing message is, the best real estate partners simply can not be replaced by cut-and-paste solutions.
It’s not what you pay for something, it’s the total value of that service that matters most. ‘Saving’ up front to lose big on the back end just doesn’t make a lot of sense to me. And certainly not when it comes to your family’s largest financial asset.