Fall-out in Australia reaches UK shores as ex-Purplebricks agent accuses it of failure

A former agent with Purplebricks in Australia, where property prices are falling at their fastest rate for five years, has released apparently damning documentation to a number of UK media outlets, including EYE.

If the documentation is authentic, then amongst it is an email from Kenny Bruce – apparently parachuted in to try and turn the Australian sales efforts around – asking its people not to go to the press.

Bruce’s email says: “I would ask that anyone considering sharing any information with external companies or people to think twice about it because you have all worked too hard to add any additional pressure to your colleagues when we are so close to making some improvements that will see you and your family thrive within Purplebricks.”

The email outlines a number of efforts being made, including: managing and reducing old stock; getting stock listed quickly; explaining the benefits of upgrades to customers; chasing back old appraisals and closing new appraisals.

“All of the above are second nature to top class real estate agents,” says the email which concludes “lots of love, Kenny”.

Purplebricks has told EYE it will not comment on any aspect of the apparent revelations.

They come from Jason van Straalen, a former local territory owner for Purplebricks in Australia, who said that the hybrid model will not work in a declining market.

The Australian market has been in boom for some six years, but now both prices and transactions are well down in key areas including Melbourne, Sydney and Brisbane.

Developers have been unable to sell units and are renting them out instead, and auction rates have collapsed.

van Straalen has said that he quit after earning less than half of what he was told he would earn. He has also accused Purplebricks of a bullying culture, as agents struggled to reach targets.

He says he worked 80-hour weeks and secured 67 listings in the 13 months he was there. However, he only managed to sell 20 of those homes.

He talked to the Australian publication, Financial Review, which ran the interview originally under the headline: “Inside the Purplebricks sweatshop: former agent accuses it of toxic culture”.

One specific accusation he makes is that the word ‘cancer’ was used to describe a sales assistant who was leaving. EYE has also seen what looks to be a copy of this email where the word was used.

He also says that share options promised after six months did not materialise.

Financial Review says that Purplebricks agents are expected to list at least eight properties a month, but claims to have seen internal reports showing that very few are achieving this.

Again, EYE has been shown this documentation, which appears to confirm the target and also to show that a number of LPEs made no listings at all in June.

If this documentation is correct, then Purplebricks’ listing volumes were just 27% of the target of 650.

Another email, from Purplebricks Australian boss Ryan Dinsdale, tells its people that the latest Financial Review story gave it no opportunity to respond – something that EYE has done in connection with this story although Purplebricks has not taken us up on the invitation.

Dinsdale says in his email: “You may have seen that the AFR have published another article today. Despite having a right to respond to such content we were sadly not given any opportunity by the AFR and the article was printed without any balanced, factual comment from Purplebricks. We have asked the AFR what their agenda is and why we were not respectfully given the opportunity to respond to this one-sided story.

“In any event, what is clear to me is this article simply highlights that there are a small number of former agents who don’t share our values as a business.”

An earlier email, dated June, from Dinsdale referring to another Financial Review story says: “We have sold more than 3,500 homes in Australia and you are excelling – this tells us we have a long term future in this market and we are a popular proposition amongst sellers and agents.

“To suggest that traditional agent models are better suited to a slowing market shows a lack of understanding of how Purplebricks works.”

van Straalen has now set up his own fixed-fee agency JVS Real Estate, which he says will be based on what he learned from his time at Purplebricks.

He says Purplebricks will have to change its business model “dramatically” if it wants to grow the business in Australia.

He told EYE that Kenny Bruce’s email in particular “confirms how much strife Purplebricks are in down under. It’s a mess you wouldn’t believe and they’re desperately trying to play it down.”

Not in dispute is that Purplebricks has appointed ex-Rightmove sales director Neil Tavender as chief operating officer, and earlier this month announced that it had handed him 500,000 share options at 0.01p each, with an exercise price of £2.87.

National sales director Brent May has departed by mutual consent, and Purplebricks co-founder Kenny Bruce will lead the Australian sales team pending a replacement.

The extraordinary turn of events in Australia begs questions of Purplebricks’ subsequent launch into the US market.

van Straalen told EYE that Purplebricks should have got its launch into Australia right first – and that this has been “anything but right”.

https://www.afr.com/real-estate/residential/inside-the-purplebricks-sweatshop-former-agent-accuses-it-of-toxic-culture-20180726-h135t7

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18 Comments

  1. smile please

    First of many stories I suspect. And hardly sounds like they are self employed.

    Still Neil has landed on his feet with the share options. Let’s hope he does a better job than the last estate agents he owned in the UK.

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    1. Bless You

      No sympathy. Bad company who need bad people to survive. PayanyWay is morally corrupt.  Next.

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  2. ArthurHouse02

    When Mr Bruce talks about thriving, doesnt he mean him and his family? From my experience, very few LPEs are doing well, most scraping by, some having 2nd jobs. All being led down the path that riches they in wait for them. This company solely exists to make its owners millionaires whilst those on the ground slog their guts out staying up till 2am too scared to go to bed early incase the website chucks a 07:30 viewing in the next morning that they arent aware of.

    This is not estate agency and the penny is starting to drop.

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  3. Property Poke In The Eye

    The cracks are starting to appear.

    PB can mislead the public and investors but they can not mislead their staff.

    These for sale by owner sites / cheap selling models do not work in a tough market on another thread YOPA are pimping more in and will keep pumping more money in.

    There will be more PB agents leaving in the coming months and revealing their stories to the press.

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  4. Chris Wood

    More news just in from down under as National Sales manager ‘leaves by mutual consent’

    https://eliteagent.com/purplebricks-parts-company-with-national-sales-director/

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  5. letsallcalmdown73

    In PB’s defence they are thriving as a business in the UK and you do see their boards everywhere. Their concept was great and their execution cannot be disputed, however, they are known to be drive their sales force to the point of extreme. Who in their right mind would stay up till midnight to see if a valuation comes in…what sort of pressure must they be under to have to do this? I think that now Jason Van Straalen has started the ball rolling more and more people will emerge from the woodwork and tell of similar stories in the UK. How much shall we bet that poor Jason has been hit by a law suit for daring to speak up?

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    1. PeeBee

      “In PB’s defence they are thriving as a business in the UK and you do see their boards everywhere.”

      “Everywhere” presumably being approximately 1 for every 30 or so competitor boards – of which 98% are based on the nearest High Street?

      “Their concept was great and their execution cannot be disputed”

      Their “concept” is fatally flawed and destined to crash and burn… their “execution” of said crash and burn cannot be denied.

      Their choke-hold over the UK employees past, present and no doubt future is their key to survival at present. Once they see that the Aussies (and no doubt the Yanks) don’t hold back the truth for fear of purple revenge I think the floodgate will finally open.

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      1. letsallcalmdown73

        “Their choke-hold over the UK employees past, present and no doubt future is their key to survival at present. Once they see that the Aussies (and no doubt the Yanks) don’t hold back the truth for fear of purple revenge I think the floodgate will finally open”

        this is very true! The fear of the PB legal team has stopped many from speaking the truth. Im sure when this flood gate is opened we will hear of LPEs not being paid invoices when they chose to leave, areas being taken from so called territory owners, people being ‘sacked’ with immediate effect for small blunders.

        But what it would be naive to say is that they didn’t capture the market and shake up the online agency. They have succeeded better in their vision than any other online agent has previously. Whether they are ‘loved’ in the industry or not is besides the point… their customers have saved money, enjoyed the transparency of the service. I don’t buy all this Hype that they undersell houses, they clearly don’t and all agents will have stock they do not sell. Lets not forget the CW and Sequence charge upfront ‘marketing fees’ that are also lost to the customer if the property fails to sell.

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        1. PeeBee

          Your last paragraph reads like someone who has swallowed the bait and is being reeled in without a struggle.

          When do you start?

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          1. letsallcalmdown73

            surely ignoring the last paragraph you will know i am not foolish enough to swallow the bait. i just like to be balanced in the discussion. i for one will not be pledging alliance to the PB flag.

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        2. PeeBee

          “I don’t buy all this Hype that they undersell houses, they clearly don’t…”

          Suggest you have a read of this blog that PurpleBricks posted up on Tw@tter in a brag that I would suggest has blown up in their faces…

          themummybubble.co.uk/2018/08/26/selling-my-home-with-purple-bricks/

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  6. AgencyInsider

    ‘The wheels on the bus come off off off…off off off…off off off,

    ‘The wheels on the bus come off off off…off off off…off off off,

    One by one.’

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  7. GPL

    “Lots of Love, Kenny?”

    If this is accurate? ……I’m starting a Crowdfunding Page to gather donations to build the largest purple sick bucket in the world!

    Kenny? “Get real!”

     

     

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    1. Room101

      Well it is better than,

      ………..Lots of love, Kenny the leading purple veined one”

       

       

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    2. MarkRowe

      Or,

      …. Lots of love, Kenny the purple headed warrior..

       

      Is that allowed on here? Have I gone too far?

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      1. Room101

        I pulled out of an earlier post on that basis.

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  8. man perero

    Any self employed estate agent who needs to be told the very basics of agency is either not very good or not self employed!!

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  9. Property Paddy

    There are recruiters that specialise in Estate Agency, no surprise there then. Except what they think about PB. Despite having been a bit of a “cash cow” for them over the last few years.

    If you know a recruiter ask them what they think, could be a different storey in different parts of the UK. I certainly would be talking to them if I was a stock holder.

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