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UK real estate agent lands in Oz: promises to save $15K on fees

UK real estate agent lands in Oz: promises to save $15K on fees

A new kid on the Aussie property block is claiming to save you thousands – as much as $40,000 – on the sale of your home.

Purplebricks, the savvy UK property agent, has landed in Australia - eschewing the (often-hefty) price structure charged by the mainstream. Instead, it is charging an all-in flat marketing and commission fee for selling your property.

It launched in Victoria (Metro) and parts of Queensland including the Gold Coast and Brisbane in September, but now is extended its offering to Sydney Metro and the New South Wales Central Coast with hopes to go national mid year, Purplebricks Australia chief executive Ryan Dinsdale told Yahoo7 Finance.

Also read: More home loan rate hikes expected in 2017

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The other thing the UK agents are eschewing is a direct bricks and mortar high street presence – instead using local property agents and a 24/7 online client platform showing how many queries the property has got, viewer feedback and direct offers.

The potentially game changing agents claim it can save home sellers as much as $86000 in agents fees on pricier properties along Sydney’s Eastern Suburbs and circa $40,000 on Inner West, CBD and Southern properties.

Charging a flat fee of $5,500 in NSW, Purplebricks local property expert will sell a property via private sale, which includes advertising on Purplebricks.com.auRealestate.com.auand Domain.com.au, floor plans, a property description, professional photography, a ‘for sale’ board, support team and 24/7 support.

Australian property agents usually charge a 2.2% commission based on the value of the house and a further $2,500 marketing fee although these costs can vary.

However, for homes that go to auction in NSW, Purplebricks are charging an additional $1,100.

 

Purplebricks has made major waves since its arrival on the UK property scene in 2014 – becoming the country’s third large property agent and was floated on the UK stock market in December 2015.

The firm are “incredibly happy” with how its been received in Australia, Dinsdale said. In four months, Puroplebricks has sold 150 properties already including a house at Mudgeeraba in the Gold Coast for $545,000 at first viewing and a property auctioned at Heidelberg Heights, Melbourne for $787,000, which has a reserve price was $765,000. The owners saved $10,500 and $15,000 on agents fees, respectively, according to the company.

However, Purplebricks isn’t some remote e-tailer like eBay or Amazon– it is fully present [for the client] thanks to the local property agent, who “work exclusively for Purplebricks and are experienced retail agents,” according to its Australian chief executive.

“We aren’t just online, our business is about the real estate agent and the property being sold.” We’ve taken the efficiencies of being able to show properties to a huge audience online and transferred that [saving] to the client, he added.

This is Purplebricks first international launch and has no immediate plans to look at the New Zealand market but “never say never," Dinsdale added. There are no plans to list on the ASX, either. 

'Good news'

The arrival of a new player pledging to shake up the market is “good news” for house sellers, believes Stephen Koukoulas, Managing Director, Market Economics.

“The Purplebricks model is taking the traditional real estate agent model to task.

“High fees linked to the value of the property and not the quality of the service provided by the real estate agent is allowing Purplebricks to come in and aggressively undercut the high fees currently being charged by traditional real estate agents.

“The savings [for home sellers] will be substantial,” he told Yahoo7 Finance.