Purplebricks boss Michael Bruce has said that traditional estate agents “have been able to charge people too much for too long for too little”.
In an interview with the Mail on Sunday, Bruce said as a result agent were not incentivised to go out and create technology that would drive down their fees by 70%.
Bruce, who told the paper that Purplebricks is making a sale every 16 minutes, said that customers could save between 50% and 70% using his firm, depending on whereabouts they are in the UK.
He said: “It’s a considerable saving but at the same time they get a much better service. We’ve got over 10,000 rated excellent reviews, and try finding an estate agent anywhere in the world that gets positive reviews. They’re very difficult to find.”
Bruce also criticised the estate agency model which “requires the leads of estate agents to send their troops out to get a property on at all costs, tie a customer into 12 to 16 week agreements, spend the next 12 to 16 weeks chipping them on price.
“If they chip on price they sell, if they don’t they churn in the market. That’s why 60% of houses sold in this country sell with a second or third agent”.
Bruce said that people do not want a totally technology-driven service, but one where someone can advise them. He said the first Local Property Experts hired by Purplebricks “must have been mad” because they had to sign non-disclosure agreements, and were not shown the technology: “We just told them about our dream and how we were going to achieve it,” Bruce told the Mail. “What surprised me is how many people believed in the same dream.”
Purplebricks enjoyed a good day on the stock market on Friday, with its shares finishing at 151.75p, up 7.75% on the day.
The firm also announced that two members of staff last week exercised options to subscribe to options in a total of 600,000 ordinary shares at 0.01p each. Director of marketing James Kydd has been granted 500,000 options and chief technology officer David Kavanagh has been granted 100,000 options under the employee share option plan.