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FintechReal Estate

Flat-fee real estate agency Purplebricks plans expansion to New York

U.K. company first launched in U.S. in September 2017

Last year, flat-fee real estate agency Purplebricks expanded into the U.S. after building a successful business in the United Kingdom and Australia.

Purplebricks’ first foray into the U.S. was Los Angeles, a market selected because it “offers the ideal conditions for market testing,” and includes “concentrated population densities and a plethora of properties across all price ranges, thereby providing enormous upside to sellers, buyers and agents.”

The company recently expanded beyond Los Angeles to Fresno, Sacramento, and San Diego.

Now, the company is plotting the next phase of its U.S. expansion and is looking to the opposite coast.

Purplebricks announced earlier this week that it will be expanding to the New York area later this year, and plans to be active in New York by June 2018.

Purplebricks offers a flat listing fee, which it claims will set it apart in the competitive New York market. The company charges sellers a flat fee of $3,200 to list their home and a “highly competitive” buyers’ agent commission of 2.5% once the home sells.

According to Purplebricks, the New York designated market area, which includes more than 20 million people in select counties across New York, New Jersey and Connecticut, is “particularly well suited” for what the company has to offer.

The company claims that real estate commissions can reach as high as 7% in the New York area, and with an average home sales price of approximately $560,000, its flat fee model will save buyers thousands of dollars.

According to the company, on a $560,000 home, a seller would save $13,600 by using Purplebricks instead of the paying the standard real estate brokerage commission.

Additionally, the New York area’s high population density and transaction volume should “allow for accelerated brand awareness.”

“Purplebricks has broken down barriers in an industry that has historically been reluctant to change. We are providing a simple and convenient way for both buyers and sellers to conduct business and save thousands of dollars at the same time,” Purplebricks U.S. CEO Eric Eckardt said. “With Purplebricks those sellers and buyers are able to enjoy the changes to the process and pricing they have been calling for. We are excited about our planned entry into the New York DMA, which is the largest in the U.S. with more than seven million households.”

According to the company, Purplebricks can charge less than other real estate agencies because it offers a technology-focused selling experience.

Sellers are assigned a dedicated “local real estate expert,” who provides advice and full service through closing. Additionally, the local real estate experts provide a comparative marketing analysis to determine the selling price, arrange photography and digital marketing and stage a 3D virtual tour.

Sellers can also used Purplebricks’ “easy-to-use online platform that provides an unparalleled level of control and transparency over the entire sales process.”

Purplebricks is “currently recruiting” licensed real estate professionals in the New York area to serve as the company’s local real estate experts.

“It is a sign of confidence in the potential of the U.S. business that we are today announcing our expansion to cover both the East and West coasts, with our planned entry into the New York market,” Michael Bruce, founder and group CEO of Purplebricks, said.

“With higher than average rates of commission and transaction volumes, New York was the natural first move on the East Coast for Purplebricks. Our local team have an in-depth understanding of the U.S. market and considerable experience of New York specifically,” Bruce added. “While early, we are encouraged by the exceptional quality of the LREEs that we are able to recruit, which reinforces our belief that we will deliver a better service for our customers while saving them thousands of dollars and delivering attractive returns for our shareholders as the business grows.”

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