Regional News

Will raising its fixed fee again help or hurt Purplebricks?

By Editor 0 Comments NEWS, Regional News

Purplebricks is stirring the pot by upping its fixed fees to $8,800, the move having started up debates about whether its the best selling option for vendors within the plummeting housing market.

It has also fired up its competitors with the country's biggest real estate agency Ray White likening the Purplebricks offering to an expensive lead generator that makes its money by paying its agents "very little".

"Our model of charging [a commission] on a successful sale has not changed. We believe in the success-based model and have concerns about any other fee structure," Ray White director Dan White told The Australian Financial Review.

DIY platform forsalebyowner.com.au, which charges less than $1000 to assist vendors, said it was selling more than 100 properties a month on its platform including multimillion-dollar homes.

"The amount of money that vendors pay Purplebricks as a fixed-fee is still quite high, and whatever initial appeal that holds is largely lost as soon as consumers realize that that fee is payable even if the property does not sell," said founder Colin Sacks, who runs the business with his wife Amanda.

"We think that our model is being embraced by the mainstream far more readily than Purplebricks or other alternatives to the traditional real estate agency."

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