The impending Australian launch of self acclaimed real estate disrupter Purple Bricks is doomed to failure for a number of reasons including simple maths and Purple Bricks is no Uber according to RE/MAX WA Managing Director, Geoff Baldwin.
“Purple Bricks, was founded in the UK and despite making impact in that market, to this are point is showing a loss of nearing $17 million over the past two years” Baldwin said.
“Unlike the UK market where sellers have been trained to do much of the work often including opening and showing prospective buyers sent to them by their agents, the Australian seller has a much higher expectation.
“Paying for a ride in a conventional taxi or with Uber car cannot be compared to the intricacies of selling property any more than comparing the decision to hire a lawyer or represent oneself.
“With the average good agency in this country retaining around 15% of turnover before taxable profit and the national average being around 7%, simple maths depicts that a whole range of services an skills will need to be omitted if Purple Bricks hopes to avoid similar losses in Australia.
“There is no way they will attract the better agents or salespeople as they simply will not work for the low fees on offer with Purple Bricks and if they believe any significant volume of Australian sellers are going to be happy to represent themselves, they are in for the same disappointment experienced by the multitude of failed discounters that have come before them.
“Of course Purple Bricks are likely to attract media attention and the interest of some sellers however, while conventional agents need to continually hone their skills and services, they are not likely to be made redundant by the Purple Bricks model.