- After one month of operation, Purplebricks U.S. has 24 agents, 12 listings and plans to expand to San Diego, Fresno and Sacramento next.
Purplebricks, the online agent that has seen massive success while battering the incumbents in the U.K. market, launched in the U.S. about one month ago. Let’s take a deeper look at its launch, its tactics, the numbers and its next targets.
The business model in the U.S. is similar to the U.K. and Australia (where Purplebricks also operates): Purplebricks charges a listing fee of $3,200, plus the typical compensation paid to buyer’s brokers (typically between 2 percent and 3 percent).
Sellers must pay the fee either upfront or at closing, regardless of whether their home sells.
Purplebricks also works with homebuyers, paying a $1,000 rebate out of the buy-side commission toward closing costs.
The customer proposition
Pre-launch, the customer proposition for the U.S. market was the key question for me. Given that in the U.K. there are only listing agents and no buyer’s agents that Purplebricks needs to work with, the customer proposition is simple and straightforward: agents are bad, and Purplebricks is the alternative.
That approach would not fly in the U.S. market because it would end up alienating the industry and the important role of buyer’s agents in bringing prospective buyers to properties for sale.