How Purplebricks ‘cleverly’ spun the web that trapped it in the end

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Purplebricks cleverly promoted that 90 per cent of people who sold through the fair fixed-fee agency would use it again, but it never promoted how many people who didn’t sell through it who would use Purplebricks again.

This is according to Century 21 founder and chairman Charles Tarbey, who added that there are many vendors who were disappointed in the Purplebricks model.

“Although they claimed to seek a lower fee, although not in all cases, those who did not sell through Purplebricks, and again there were many, were left at a distinct disadvantage,” Mr Tarbey told REB.

“Purplebricks in the early days seeking the full fee, marketing fee and commissions or whatever one chooses to name it, upfront, meant that home sellers paid whether they sold or not, and if they did not have the funds, they would generally need to borrow to ‘save’ on the traditional agents commission.”

Mr Tarbey said the reality is that many did not sell and have been left short of cash and in some cases with a high interest loan.

“This I always felt would ultimately work against Purplebricks and the agents they engaged to work for them.”


Mr Tarbey said that since the birth of Uber, people have looked for the Uber of real estate.

He said that this has spawned many different models, most of which have not gained traction.

“The way we promote ourselves and deliver our message as an industry has changed; however, one important principle has not and has stood the test of time, and the most successful agents in Australia have understood this: to build and respect relationships with your customers and clients. This is not done overnight and mostly not earned because of what you charge people but because of what you can do for them.”

Mr Tarbey said there is always room for fixed-fee models and low-commission agents, but to build and maintain a high-quality real estate service is costly to agents, and a balanced fee for service is necessary.

“Traditional commission charges may seem high, particularly in a boom; however, in a stable real estate market, not every home sells yet there is and should be an expectation that an agent will do what they can to promote a seller’s property for sale, even if they are not paid a single cent if the home does not sell or if the seller withdraws for personal reasons.

“As an industry, we need to look successful, and to that extent, agents have the appearance of being highly successful even if they are not. I have always said that when perception meets reality, reality comes off second best.”

But Mr Tarbey warned that this can be detrimental in many cases as it creates the image that agents make a great deal of money for doing very little.

“Social media has over the years given obscure, unknown and average-performing agents a platform to look like they know what they are doing when many of them had absolutely no idea,” he said.

“Some have made it through, but many have made the industry look like we are just a bunch of show-offs — posting ‘what colour Ferrari should I buy’ or ‘do I look better with or without a beard’ crap is not what the consumers want. Simply put, if you are acting for a client, they want to know that you have 100 per cent of their interests in mind.”

Mr Tarbey said that vendors need to know you are capable, but they don’t need your success shoved down their throat.

“They should know that money is not your priority but that helping them is, because with this approach money will find you anyway because of the reputation you build.”


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