Purple Bricks – a different approach
Unlike conventional High Street estate agents, some newer online agents like Purple Bricks charge a flat fee at the outset rather than taking commission based on the actual sale achieved.
This is a radical change from the time-honoured ‘no sale, no fee’ arrangement so you need to check the pros and cons before deciding which option to go with.
Purple Bricks charge a fixed fee of around £1,000 (or £1500 in London) at the outset. This sum isn’t contingent upon them achieving a sale. So there’s a potential risk that if the property doesn’t sell you won’t get your money back – for example if you change your mind, sell privately, or have to withdraw it from sale for some other reason.
Purple Bricks recently introduced a ‘money back guarantee’ where your fee is refunded if they don’t achieve an offer within 10% of the asking price. But statistically it’s unusual not to receive an offer within this range.
Some online services charge a similarly low fixed fee but tie you in to arranging EPCs and conveyancing services etc through them.
The higher the value of a property the greater the saving. For example on a house sold for £1.2 million you would pay a conventional agent charging 1.25% +VAT a total of £18,000 including VAT. So that’s a pretty massive potential saving.
But arguably, when it comes to ‘top echelon’ properties there’s a certain amount of snob value with the choice of estate agent, something that ‘posh’ agents are tremendously proficient at manipulating.
Having the ‘wrong’ estate agent board outside your prime property might raise an eyebrow with the neighbours, or more importantly might suggest to status-conscious buyers that your home isn’t as top drawer as it’s made out to be.
Without an intimidatingly well spoken besuited agent on your side perhaps buyers will feel emboldened to bargain harder for multi-thousand pound discounts. Or maybe estate agent board snobbery is now a thing of the past?
Another critcism sometimes levelled at Purple Bricks is that since the fee is paid up front, maybe there’s less incentive for them to work hard over several months ‘progressing’ your sale? But it’s worth pointing out that their future reputation is dependent on actually achieving sales, which itself is a pretty big incentive.
The bottom line is, you can make enormous savings with online fixed-fee agents. But you need to be prepared to take a more active role progressing the sale yourself, and accept the risk that you may not get your fee refunded if the property fails to sell.
Our next blog – coming soon ……
Why it’s important to read the smallprint before signing the agent’s contract
Check out our Rightsurvey blog page for more industry tips and secrets written by property professionals to help put you in control.
