Flat Fee Disruptors

Flat fee agencies are not new and with the arrival of Purple Bricks, it has people talking about this model again.

Since the arrival of the listing platform named Purple Bricks, I have had so many people ask me what my thoughts are and whether I am worried about them as a competitor? I will get to my thoughts about them in a moment but the answer to whether I am worried about them as a competitor is No.

This type of platform has been around for a very long time, yes there are small differences in some areas but essentially they are a 'flat fee' model. Now, here comes the key difference between Purple Bricks and the flat fee agencies that already exist in our market and I want everyone to pay particular attention to this, the advertised starting fee of $4500 is to LIST your property for sale, it is payable upfront and whether you achieve a sale or not, that money is gone.

Our industry has always been based on the philosophy of 'reward for performance' and that any success fee that is paid to Real Estate Agents is only payable once all of the following steps have occurred:

  1. The property is marketed for sale
  2. The client has received an offer they are happy to accept
  3. The offer conditions (if any) are met
  4. The property settles (money is exchanged between a buyer and seller)

So, Purple Bricks are paid $4500 at point 1 or before of the above, thats a large investment without any result at that point in time or perhaps without any result at all. With a full service agency, if a settlement does not occur, no commissions are payable.

So here are my thoughts - I love competition in our market, I believe it is what makes our industry progress and always strive to get better at what we do. Without competition there are no winners, nobody striving to be the best and the ultimate loser will be our clients. It's all about choice isn't it, whether you think this 'new' model is value for money or not is your call, I simply could not fathom paying a Commission to a Real Estate Agent without them having first achieved a result that I was happy to accept. If I was going to even consider this path, I would negotiate with them and get them to agree to be paid upon successful settlement, I wonder if they would?

 

Posted on Monday, 17 April 2017
by Matt Travia in Latest News

← Earlier Post Later Post →

Archived Posts