How does Purplebricks stack up against a traditional real estate sales agent?
Michael Field
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In his latest Lexology article, Tony Cordato from Cordato Partners reviews the latest disruption in the real estate market.
In the article, he examines: what services Purplebricks provides for the fixed-fee; the mixed bag of advertising Purplebricks has used; and an overview of its latest financial accounts. Marketing commentary by Michael Field from EvettField Partners.
"Digital disruption has come to real estate agents in Australia in the form of online agencies which are offering marketing and sales services to assist sellers in selling their property for a low fixed fee. They are undercutting full service real estate agents which charge a sales commission."
- Tony Cordato
Purplebricks has chosen an interesting market position as a low-cost service provider. Their value proposition centres around the perception of lower fees through a fixed fee arrangement, rather than paying a salesperson commission based on a percentage of the property sale price.
The challenge for consumers who choose Purplebricks is that they pay the fee whether the property sells or not. Unlike a traditional real estate agent who if properly trained in negotiation may achieve a higher sales price and only get paid if the property sells.
See full article here: ARTICLE LINK
Agreed, Michael. Anyone and anything will sell in a hot market. But in a warm or cool market, it takes a real estate agent with skill and persistence to sell a property. And paying a flat fee up front, instead of paying for performance, is not the way to reward an agent for their skill and perseverance.