- Purplebricks will operate as a cloud-based brokerage without physical offices.
- Traded on the London Stock Exchange, Purplebricks has become one of the U.K.'s biggest brokerages since launching only three years ago.
- Purplebricks agents will handle communication on behalf of sellers.
Purplebricks, a U.K. real estate brokerage that raised $60 million to break into the U.S., plans to launch in California in the second half of this year.
The hybrid brokerage is looking to hire hundreds of California real estate agents, promising recruits “territorial exclusivity” over ZIP codes, support staff and a steady stream of leads.
“As it builds a strong brand presence in California, Purplebricks intends to expand into other key U.S. states via a controlled roll-out strategy with a plan to accelerate coverage, as required,” Purplebricks said in a press release.
Purplebricks — which will operate as a cloud-based brokerage without physical offices — will offer a blend of technology, hands-on service and low fees to try to replicate its success in the U.K. Its technology platform provides features such as the ability for sellers to approve showings and view the performance of their listings.
For now, Purplebricks agents will handle communication on behalf of sellers.
But the company might allow buyers and sellers to negotiate directly in the future — a hallmark of its U.K. model.
The company will place a focus on trying to double-end transactions.
Unrepresented buyers will be able to submit offers online if they agree to allow Purplebricks to handle both sides of the transaction, said Eric Eckardt, a real estate tech vet who will head up Purplebricks’ U.S. expansion.
Purplebricks will charge a list-side commission that’s less than a quarter of the going rate, but it will collect full buy-side commissions when representing buyers and make typical offers of compensation to buyer’s brokers.
Traded on the London Stock Exchange, the company has become one of the U.K.’s biggest brokerages since launching only three years ago and has purportedly made some inroads in Australia. The U.K. old guard has pushed back aggressively, accusing Purplebricks of providing poor service and claiming it sets homeowners up to fail.
Purplebricks recently raised more than $60 million in a special stock offering to push into the U.S., and has now announced California as its first expansion target.
The company says it wants to bring on “highly experienced, full-time agents.”
Some low-fee brokerages have struggled to attract top talent because agents can often make more money by charging traditional commission rates.
Eckardt said Purplebricks can overcome this challenge because agents will receive free leads and support, and they will collect a typical commission for representing buyers.
He envisions Purplebricks agents pulling up their schedules every Monday to discover they have been booked for listing appointments throughout the week.
“We’ll fill their calendar on a weekly basis,” he said.
Real estate agents operating in markets targeted by Purplebricks can expect to see a flood of advertising from the company. It will spend heavily to generate leads and build its brand through various distribution channels, including listing portals, Eckardt said.
Purplebricks’ U.K. marketing strategy of casting agents as overpaid has irked the industry across the pond. But Eckardt said the brokerage’s U.S. messaging should “ultimately resonate” with both consumers and agents here.