Agent challenges Purplebricks over referral fees paid to conveyancing firm

| Rosalind Renshaw

An agent has published new criticism of Purplebricks.

Chris Wood, of PDQ Estates in Cornwall, has posted claims that Purplebricks’ customers are “over-paying for tied solicitors by hundreds of pounds”.

Wood claims that customers could feel ‘commisery’ if they have been encouraged or required to use a specific firm of conveyancers “only to find that over £380” was going straight into the agent’s pocket as a referral fee.

Wood says this is perfectly legal, but does question the introducer fee charged by Purplebricks – and says that this fee should be declared to the customer at the outset.

Wood says that customers could be unaware of this.

Purplebricks did not comment on the claims.

This is Wood’s latest blog:

Commisery for Purplebricks customers overpaying for tied solicitors by hundreds of pounds?

 

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37 Comments

  1. DomPritch134
    January 31, 2019 at 06:55

    And this is a story because? It’s like a broken record with the quarterly let’s try and get an article in PIE attempt, so tiresome.

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    1. Bless You
      January 31, 2019 at 09:21

      It’s important because people like Chris wood have values and speak for other agents who can see the disgusting practices of bricks.
      Unfortunately rightmove zoopla asa property mark which? etc have no idea and allow them to operate .

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    2. WiltsAgent
      January 31, 2019 at 11:03

      The only story should be that today, the 31st January, Purple Bricks have lost another £4 million of other people’s money since new years day. New year same old story just like a broken record.

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    3. Mothers Ruin
      January 31, 2019 at 16:12

      I’m surprised at the negative comments arising from this article. It’s not a broken record it’s a valid point and a very topical one since it’s  being debated right now. As a result of greedy corporates charging ridiculous tenant fees they’ve now been completed banned. If the rip off conveyancing referral fees continue then they’ll be banned too leaving smaller agents out of pocket again. Frankly it’s getting ridiculous and this definitely needs to be capped soon otherwise everyone will lose out! Having said all that smaller independent agents and franchisees will probably still survive but I doubt that Purplebricks will if they lose this income.

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  2. JWVW
    January 31, 2019 at 07:17

    I disagree. There is a serious point here. The consumer should have a right to know what commission is being received by the property agent on conveyancing, insurance and for property management on loaded maintenance invoices. My pension broker tells me exactly how much commission he receives. Why be so opaque? Openness and  old fashioned honesty might improve our lot with the public. Being sneakily fleeced is somewhat passé. From my point of view though, I’d like to go back to charging fees in guineas.

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  3. Londonbound
    January 31, 2019 at 07:34

    As usual Chris Wood is wrong again…

    The quotation system is the same for both buyers and sellers. Perfectly transparent and legal.

    With only 13 instructions Chris, maybe it’s time to concentrate on your business?

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    1. Chris Wood
      January 31, 2019 at 07:52

      I suggest you actually read my article. It’s about the amount, not the transparency. My business is running at a profit for this financial year. I’m happy with that.

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      1. Londonbound
        January 31, 2019 at 08:17

        “Wood says that customers could be unaware of this”

        It’s TRANSPARENT. Stop flogging a dead horse.

        Dont make me go through your stock and see how old some of that stuff is.

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        1. Woodentop
          January 31, 2019 at 08:37

          LPE!

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          1. Property Pundit
            January 31, 2019 at 11:27

            To$$er more like.

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        2. jackobabe70
          February 2, 2019 at 18:23

          Hahhahahaha. Go sell some houses Chris

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          1. The date & time sponsored by PIE is;
            February 3, 2019 at 21:13

            Londombound – 13 listings on NSNF might not sound a lot, but then Purps numbers are worrying too.

            LPEs averaging 30 ish listings each, which is clearly more, but then;

            A heap of those have to have been relisted, LPEs don’t get paid twice, and the vendors have paid for failure.

            Collectively 10,000 ish listings are reduced at any one time, but at least the vendors saved a few quid on commission.

            How many they sell is still a fooking mystery and irrelevant when you’ve already been paid.

            The very best case is they list and sell 30 each, which they dont, so scrub that thought.

            However all 30 vendors have paid and a large portion of those won’t get the result they paid for.

            The law of averages says a third fall through, and every vendor pays for that as well.

            Purp are haemorrhaging cash at an unsustainable rate.

            So perhaps you should worry.  Worry that 13 current NSNF listings is more transparent and sustainable than a company who gets paid on tens of thousands of listings.

            Now that is worrying.

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  4. SLF
    January 31, 2019 at 08:10

    zzzzzzz

    When is Chris Wood going to realise that constantly knocking the competition isn’t very becoming?

    I had 20 years plus in the high street before going “online” so have experience of working with both models. I don’t give the deficiencies in the way the high street works a second thought. Why would I? I’ve got work to do, life’s too short and I don’t feel the need for constant attention.

    Chris does not speak from a position of any direct experience when it comes to his continuing bashing of a sector of our industry that he’s never worked in and from many of his comments on here, doesn’t really understand.

     

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    1. AgencyInsider
      January 31, 2019 at 08:30

      Wood may be an obsessive but he is not afraid to put his head over the parapet and call out bad or illegal or questionable behaviour. Good for him I say.

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      1. Chris Wood
        January 31, 2019 at 08:36

        Others are ‘obsessive’ I prefer the term ‘highly focussed and determined’. 

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    2. Chris Wood
      January 31, 2019 at 08:35

      I devised and helped develop a hybrid model as consultant to Tesco/RBS in the mid noughties and piloted a trial of my own a few years ago, so I have a fair idea of the model.
      I write my articles in a journalistic format rather than as a competitor because I’ve worked for 30 years in agency trying to raise standards for consumers and agents alike, as well as eliminating cowboys/ rogues in the industry. Accordingly, you don’t see any requests to use my business in these types of articles and I always reference facts/ statements.
      I respect that you hold a different opinion but try to do so from a position of knowledge rather than ignorance X 

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    3. AgentV
      January 31, 2019 at 08:50

      SLF

       

      I don’t understand what you are trying to say about the difference between ‘high street’ and ‘online’. All high street agents are ‘online’.

       

      The real difference is between ‘Full Service’ and ‘Call Centre Listing’, so my question is are you a Call Centre Lister, or do you give a full service from appraisal to completion?

       

      If you are ‘Full Service’ then you are much closer to independent high street agency than you are to the likes of the national Call Centre Listers such as PB…so what is your problem?

       

      I don’t understand why you seem more content to align yourself with Call Centre Listers!

       

      BSOS23PC

       

       

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      1. SLF
        January 31, 2019 at 09:20

        “Call Centre Lister” is a name the likes of Chris, and in fairness many others use to describe non high street agents. It’s a way of trying to belittle what we do.
        I work for a company that don’t have high street offices but most definitely do offer a full and professional service. I’m in absolutely no doubt that I can offer a better, fuller and more personal service than I could in the high street. Having worked in both I’m well placed to judge and do not as Chris suggests “come from a place of ignorance” which bearing in mind I’m in my fourties and estate agency is all I’ve done since leaving college is a really desperate comment from someone who doesn’t know me, the company I work for or how I work.
        Happy Thursday x
         
         

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        1. Chris Wood
          January 31, 2019 at 10:08

          You still don’t understand do you? I am a fan of the hybrid system as long as it is honest about what it does and how it operates. I also know there are many agents who offer a fantastic service but do not have a high street presence. When my high street office lease expires, I will not be renewing it and this has been planned and discussed openly with colleagues and my suppliers for some years.

          I don’t know your career, skills or service because of your anonymity. You may well offer and operate a terrific service. How would I or anyone else on here know?

          Agents who claim to offer a personalised 24/7 service but, in fact, do nothing of the sort and rely on call-centres to deal with much of the work should be called just that. Online, as has been said many times before, is a misnomer.

          My beef with Purplebricks is that they have continually misled people since they first claimed all of their experts were all qualified but were not, and have fallen foul of consumer legislation and the law (including admitting hundreds of Anti Money Laundering issues) ever since. I also know that there are some good people who work for or, as franchisees of Purplebricks. Some of them are in regular contact with me and keep me well informed.

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        2. AgentV
          January 31, 2019 at 11:55

          SLF
           
          I’m in absolutely no doubt that I can offer a better, fuller and more personal service than I could in the high street
          So do you personally offer a full service from appraisal to completion of the sale?

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          1. SLF
            January 31, 2019 at 15:51

            Yes

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            1. AgentV
              February 1, 2019 at 08:18

              SLF

              Then you are nothing like the Call Centre Listers are you? You are the same as a good independent high street agent….just without an office.

              So why do you get upset about criticism of Call Centre Listers who don’t supply a full personal service from appraisal to completion, but try and claim they do?

              I still don’t understand.

               

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          2. Quags
            January 31, 2019 at 17:07

            I was wondering this too.

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    4. Property Pundit
      January 31, 2019 at 11:36

      ‘Chris does not speak from a position of any direct experience when it comes to his continuing bashing of a sector of our industry that he’s never worked in and from many of his comments on here, doesn’t really understand‘.
      So you can only bash the call-centre listers or know anything about them, if you’ve actually been one. OK, got it.

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  5. Woodentop
    January 31, 2019 at 09:02

    The issue is the statement not the person. PB marketing is telling everyone they can save money using them rather than the high street or put another way “Commissary” saving on agents commission v their fixed fee.

     

    This is the bone of contention, as the consumer has to try and read the small print in the very quick TV advert, next to impossible and doesn’t cover all the small print in any event. This is a practice that has been allowed to fester with any type of marketing due to the limitations of air time. However in any other type of advertising the small print is mandatory just as prominent as the rest of the advert.

     

    The consumer is left with the initial impression they are saving money, far cheaper than the high street but they claim they are the same agents. This they are not and arguably clever PR portrayal of what they really are. Limited service unless you pay the extra and continue to use supporting data which is out of date and arguably for most of the country is misleading when they use a national average on commissions. When you are advertising Nationwide surely comparisons should be relevant to the market area they are trading in. If someone quotes London rates for trading in Newcastle is that not misleading? The rules as are, say no and is taken advantage of, what a fiasco. So much for consumer protection!

     

    When you add in the costs added for extras (provided for free by the high street) and the charge regardless of sale achieved (provided for free by the high street if no sale) are consumers really saving £k’s? Many around the country are clearly not, as fees have become very competitive and don’t even reach into the £k bracket. Their is an estate agents practice order (getting on for 30 years!!) that requires agents to disclose in their contracts, if they receive a third party commission (not the amount). There have been court cases where failure to disclose, requires the commission to be paid to the customer. The question is the public being duped on all counts.

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    1. AgentV
      January 31, 2019 at 12:06

      The latest radio adverts I have heard also claim they sell quicker than other agents, and do not have any mention that people have to pay a fee whether they sell or not! I thought the ASA had ruled they had to state that in all advertising or have I got that wrong?

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  6. midsagent197772
    January 31, 2019 at 09:13

    What makes this article lose credibility is that it focuses on one agent. All of the agents I’ve worked for get a kick back from the solicitors, and none of them draw this to the attention of the customer, it’s detailed in the written quote/contract that they’re asked to read.

    Obviously we all know why it’s only aimed at PB, but if you’re going to try to act as though you’re a consumer champion, at least present the full argument.

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    1. SLF
      January 31, 2019 at 09:29

      midagent.
      Unfortunately Chris’s doesn’t like criticizing the high street. Thousands of high street agents get referral fees but he only mentions one competitor…..the same one he always mentions. 
       

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      1. Chris Wood
        January 31, 2019 at 10:25

        Over three decades, from being elected to the NAEA as a council representative, branch chairman board member and, amongst other roles, an inaugural member of the Property Standards Board, I have championed all forms of good agency and spoken without fear or favour against bad practice, especially on the high street. I was also part of the team that lobbied to ensure that declaring referral fees were introduced into TPO code in the first place.
         
        When the corporates were the devil incarnate back in the early 90s’, I was highly unpopular in some circles because I stood up for their right to be admitted to and treated equally within the NAEA. I have always called for all agents of all business models to play fairly and legally, nothing more, nothing less.
         
        When a major PLC tries to bully you with threats of legal action and the potential loss of your home because you are printing inconvenient truths about it, you have a choice, chicken out and roll over or, stand firm and fight an asymmetric campaign against a bully. I choose the latter course. I do so openly with my name for all to see.
         
        https://blog.pdq-estates.co.uk/2017/08/24/attempted-intimidation-by-a-plc-or-fair-comment/ 

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    2. Chris Wood
      January 31, 2019 at 13:20

      Again, if you read the article you will see that I was only able to write it because of a bonafide copy of a quotation being supplied to me.

       

      Had I been sent a quotation for a high street firm that publicly boasted of offering a better and cheaper service than its competitors but the best part of two-thirds of that fee went to pay a backhander to the agent for introducing them, the article would have been written about that agent instead. One or two high street agents names leap to mind who have a less than squeaky reputation but, I don’t hold the evidence, just plenty of hearsay and circumstantial evidence. Not a safe or fair way to publish.

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  7. Estate_Agent_Memes
    January 31, 2019 at 09:40

    I’ve mentioned these hidden/stealth fees many times.

    The FACT is that in our area, with all of the add-ons, PB are NOT cheaper than some proper agents. Fixed fees have been used here for many years, and can work out CHEAPER then PB.

    This means their advertising is lying as the savings aren’t guaranteed.

     

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  8. agent37
    January 31, 2019 at 10:02

    Out of interest does anyone know what referral fees corporate agents are paid? It’s always been standard when you’re in an independent, referring to an office round the corner to be £100 or so, but I imagine other nationwide firms with that amount of buying power are also receiving in the £100s in referral kickback for using their panel firm. That’s just business.

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    1. Woodentop
      January 31, 2019 at 15:54

      I was aware of double to triple, the more they referred the more they received.

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  9. GibsAgent
    January 31, 2019 at 10:17

    Have I misunderstood?  The fee is declared in the quote, so the customer is well aware of it before choosing to use PB?

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    1. Chris Wood
      January 31, 2019 at 11:30

      It’s not about the transparency of the quote, its the amount of the referral being paid to an agent who champions being cheap and does its’ best to tie customers into using an unnecessarily expensive firm of solicitors who are widely and publicly criticised by its customers on social media.

      Any agent of any business model* recommending a client to another company for reward when you know or suspect that company may not be the best company for that client is not acting in their clients best interests which, is a breach of the 1979 Estate Agents Act (a criminal offence)

       

       

       

      *This issue was discussed on PIE a few weeks ago.

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  10. Thomas Flowers
    January 31, 2019 at 14:11

    Any ‘tied’  deferment fee charge (£360) for non-conveyancing use,  ought to be advertised equally as additional fee income, however way it is wrapped, by any agent, if, it is part of the contract at inception?

    Any ‘tied’ conveyancing referral fee circa £400 for sale and presumably circa £400 for purchase, if buying on, ought to be advertised equally as additional fee income, however way it is wrapped, if, it is part of the contract at inception?

     

     

     

     

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  11. TwitterSalisPropNews53
    January 31, 2019 at 19:28

    Thank you for pointing this all out Chris. Alarming.

    But as a conveyancer, this is incredibly useful as we tell thousands of home movers a year that we will happily help them choose which estate agent to use when the sell, as we work with so many and we know what positives to look for. We shall point this out too.

    Only last week we had an employee of a high street estate agent chain apologise about how rubbish their tied conveyancers were, but that their HQ make them use them and yet they hate them so much. Yet so much money is changing hands in selling the customer to the inferior conveyancers I cannot see it stopping. Bad players are in the industry. It tarnishes the estate agent chain, estate agents generally, the conveyancing firm, and conveyancers generally.

    Not long ago I warned an estate agent who recommended a similar outfit that almost immediately they will have errors in their communications, the legal pack with be strewn with them, and that they take forever to reply to enquiries, burying their head if they cannot work out a situation to deal with. She said ‘oh my goodness I had no idea, but please do not tell your client as they pay us £300’.

    Utter madness. And yes, of course I told my clients. We even now copy in the CEO of a certain estate agent chain when we send emails to their tied conveyancers, as too frequently the email is pointing out an error/bad performance, and we hope (of course they won’t) take note they are offering up rubbish to the public.

    What a lasting impression Chris – a conveyancer receiving peanuts to handle a person’s home move. That’s why we continue to spot legal defects in house sales, as issues have been missed first time around. Why we handle negligence cases against certain conveyancers too.

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