The Real Estate Institute of Western Australia (REIWA) remains concerned that Purple Bricks is deliberately misleading the public, says Hayden Groves.
Their advertisements state "they're real people, they're proper real estate agents", but Purple Bricks might be deliberately misleading their clients by doing so, according to the President of REIWA, Hayden Groves.
He told WILLIAMS MEDIA that Purple Bricks have ignored the fundamental principle of an agent's responsibility, which is to sell property.
"We contend that it’s entirely appropriate that if an agent fails to complete the job they’re employed to do,(to successfully negotiate the sale of the vendor’s property), then they shouldn't be paid. This is a fundamental principle of an agents’ fiduciary responsibility at common law and by statute. Purple Bricks simply ignore this as they are paid at, and therefore incentivised by, listing a property," he said.
"Their agents have no fiduciary interest in ensuring the vendor achieves the best possible result because they’re not renumerated by achieving a result other than listing. This in itself is not a problem other than that’s not made clear to consumers.
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"If a consumer wants a 'proper agent', then they should get one - not some sort of hybrid agency service," he said.
According to property commentator, Property Nerd, Purple Bricks has listed 400 properties in Western Australia and has only sold a quarter of those."
The findings show there were a total of 4,157 unique properties listed by Purplebricks and 3,195 were sold during the period of August 2017 and May 2018. From this number, 405 properties were listed in Western Australia, and there were 138 sales, a result Mr. Groves said was, "hardly a beneficial arrangement for vendors".
"A reliable source in WA tells me Purple Bricks "Area Experts” are not employees of the company, and are required to sign management authorities under their own company, in violation of WA laws unless the “Area Expert” is a holder of an Agent’s Licence; which I am told is often not the case. I am also informed that they exclusively sign up vendors for 12 months. A quick scan of those associated with Purple Bricks in WA reveals almost all of them have received their sales representative registration in 2017. Only four of the list of 22 held a full agent’s licence.
"There is certainly room for Purple Bricks and other models like them in Australia but they need to come clean with the public and cease comparing themselves to proper agents. REIWA calls on our regulators to look at the Purple Bricks’ model and hold them to account; just like they do for proper agents," he said.