Purplebricks has unveiled a new service offering which is reported to involve an all-inclusive fee of $8,800 including GST when selling with the company.

If the home goes to auction, an additional fee of $600 including GST will be incurred by the client.

It has been reported that only half of the fee is paid on listing (which can be deferred for six months or until settlement), and the rest of the fee is only due when the property is sold after settlement.

WILLIAMS MEDIA spoke to industry leaders around Australia about Purplebricks new offering, and what it means for real estate agents and potential customers of the company.

Hayden Groves, president of the Real Estate Institute of Western Australia said that “Purplebricks' change in service offering shows the company now clearly understands that how you go about promoting a property as a professional real estate agent is more than just banging in the sign and putting a listing on the internet, and leaving the homeowner to do the rest”.  

“I don’t think this changes much. It blurs the lines between the offering they are providing the community and what a proper professional agent does,” Mr Groves told WILLIAMS MEDIA.

“They are trying to align those two things closer but the fact remains that Purplebricks so called ‘agent’ is remunerated by being given a small cut out of that process.”

Mr Groves said the company will never keep quality, experienced agents because they aren’t getting remunerated for achieving great results.

“In Perth, our number one selling agents by volume, who are unassisted, sell about 80 properties a year.

“If you are a Purplebricks agent you would make very little, even as a top agent in Perth.”

Related reading: Purplebricks found out

Malcolm Gunning, president of the Real Estate Institute of Australia told WILLIAMS MEDIA Purplebricks is now leaning more towards a general agency structure.

“They are offering a no sale, no charge type of base.

“One wonders why they would change - is it to become more competitive or to be more attractive?

“It seems the current model may not be working the way it should,” Mr Gunning continued.

“When you make a change you do it for a reason and I would assume they are not getting in the current market with competitive fees, particularly outside major capitals.

“Purplebricks probably doesn’t have a strong enough offering to compete with agents who are matching them.

“I believe they are changing the model because of pressure from competition of established real estate models in Australia.”

Mr Gunning said generally an agent would expect no less than a 35 or 40 per cent cut, so traditional agents are getting much more than those at Purplebricks.

Related reading: Purplebricks 'misleading the public', says REIWA

Leanne Pilkington, president of the Real Estate Institute of New South Wales said the problem is they won’t attract great real estate agents.

“The agents are going to have to carry a lot of listings, and one of hardest things when you own a business is to attract good quality sales people,” Ms Pilkington told WILLIAMS MEDIA.

“There is a lot of competition to attract great agents, and a good salesperson really makes a difference to your business.

“They can achieve better price, and the whole experience is of a higher quality.”

Ms Pilkington said she doesn’t think the new service offering will be the answer to Purplebricks' problems.

Related reading: 

Market rationalisation underway, says REIA

Apartment owners left confused by government's vague announcement on Airbnb reforms

How close did we come to having our own Grenfell disaster?