Looking to buy or sell your home? Then you might have heard of the online real estate agent Purple Bricks.
The promised advantages of online real estate agents may be tempting. This is a commission-free option for home buyers or sellers who wish to save money on traditional real estate agents.
Purple Bricks is a For Sale by Owner (FSBO) service. This means you get to control the process of your property’s sale. It removes the middle man or the traditional real estate agent, allowing you to save your money.
When looking for Purple Bricks reviews, keep the following in mind. While their pitch is enticing, these benefits come with drawbacks. Read on to learn more about how online real estate agents like Purple Bricks work.
Founded in 2012 by Michael Bruce and Kenny Bruce, Purple Bricks is a low cost online real estate agency. Besides Canada, they also operate in the UK and Germany.
After acquiring ComFree, Purple Bricks had its official launch in Canada in 2019. It has since become one of Canada’s most popular online realtor sites.
Their “proprietary software system” allows for real-time communication between their agents and clients. This helps to avoid the delays many people experience when they attempt to reach their agent.
This also removes the need for physical branches, further cutting costs for customers. The lack of offices and the expenses they entail allow Purple Bricks to charge clients even less.
Purple Bricks claims that this also allows them to provide more time for clients. This would result in faster transactions and better customer service.
Note that Purple Bricks still provides you with a realtor despite their sales pitch. This is part of what you pay for with their flat rate.
Purple Bricks advertises that you’ll have everything you need to sell for less than $3,000. There’s an upfront fee of $499, and if your home’s sale is a success, a fee of $2,499.
The Purple Bricks fees cover a handful of services. You’ll have a “local property expert” who will assist in negotiations and property viewings, as well as a Purple Bricks signboard for your property.
There’s a property advert which includes the copywriting and floorplan. You get a listing on Realtor.ca and Purplebricks.ca. There’s also a professional photography package.
Other services include phone support and access to the Purple Bricks’ online portal.
Purple Bricks makes money through the fixed upfront fee of $3,000 for a property listing. This fee already covers the materials and expenses necessary to market a property. However, the seller pays the fee regardless if the property sells or not.
It starts once a seller books an appraisal of their property. The seller submits their address and preferred date and time using an online form. They can then confirm the appointment with a Purple Bricks’ local property expert.
This local property expert is Purple Bricks’ real estate agent. Because of the lack of offices, you’ll be dealing with your real estate agent online. If there’s a need for any face-to-face transactions, then these agents can come to the seller’s home.
The agent creates a floorplan of the property then estimates the properties value in the current local market.
Once your property gets appraised by their agent, they then prepare the advertisement. They’ll submit this to you for review. Once approved, the listing goes public.
Properties for sale are viewable by prospective buyers. If they’re interested, they can use the Purple Bricks portal to make an appointment for a viewing.
Prospective buyers can submit their offer on a property via Purple Bricks’ portal. Sellers can then see any offers made, and they’ll have the option to accept or reject them.
If the seller accepts an offer, then the conveyancing process begins. Purple Bricks provides a support service to help the seller in the process. However, if you look at the parts of the post-sales process, you’ll see how much work relies on the seller.
Purple Bricks is responsible for taking note of a lawyer’s details provided by a seller. They’ll also ensure that the mortgage arrangements are set. They’ll advise and support the seller in any problems that may arise.
The lawyer or conveyance will ensure that the lender has all the needed information for the loan. They’ll be the ones to obtain leases and legal documents and liaise with the buyer’s lawyer.
Together with Purple Bricks, the lawyer also assists in problems that may arise. Agreeing on exchange and settlement dates is also the lawyer’s responsibility.
The seller must provide the lawyer’s details within 24 hours of accepting an offer. He/she must also ensure the lender has all the necessary information for the loan. The seller must oversee the lawyer’s progress on the paperwork and continue to follow up if need be.
Problems that arise from reports and mortgage positions will be the seller’s responsibility. The lawyer and Purple Bricks will only be available for support.
Should you decide to go with Purple Bricks, what would be in it for you?
For starters, it’s a For Sale by Owner method. This means you’ll be the main agent to promote and show your property for sale.
You’ll need to plan open houses, host viewings, and answer inquiries on the phone, among others. Should a prospective buyer show up, you must be available to accommodate them.
You’ll be in control of the selling process. You must be ready to receive, reject, and accept offers on your property. Some buyers may not even be pre-qualified to make a purchase.
Their local realtors are also paid upfront, which could also be a disincentive. There’s also no guarantee that they’re the best local agents. Their business model does not attract the best-qualified realtors with the most experience.
Critics have also shown that Purple Bricks has a poor track record of selling. Purple Bricks claims a 77% sale agreed rate. Anthony Codling, an analyst at global investment bank Jeffries, disputed this in 2016.
The relevant question now is whether it’s worth all this trouble to save money on commission.
This is a fair question knowing the drawbacks of the For Sale by Owner method. Hiring a traditional real estate agent can be far more convenient. Selling on your own with the help of a real estate agent online may require you to get more involved.
A traditional realtor may also be the more responsible choice if you’re tight on finances.
There’s also a misconception with the idea of saving money by not working with a traditional real estate agent. This can be true for rare properties or those in the best locations.
Traditional agents secure 13% higher prices than private sales on similar properties. A real estate agent is a professional who does the work mentioned above for you.
They also ensure that prospective buyers are serious as well as qualified. There are FSBO cases where the seller encounters buyers who aren’t pre-qualified. Going through these deals may only end up being a waste of time and money.
Professional realtors review potential buyers before they hand you any paperwork. A bidding war is the best you can hope for in a property’s selling process.
If you’re hoping to sell your home, Purple Bricks can be a great platform. Trustpilot has many Purple Bricks reviews praising the online system. Many home sellers felt satisfied with how Purple Bricks advertised their homes.
A majority of the positive reviews also stems from their ability to manage the online sale. However, there were also many negative reviews coming from buyers. There were many complications with the online system.
Buyers found it difficult to contact a real person through Purple Bricks. In the last year, Purple Bricks only sold half of the properties they were marketing.
For beginner home sellers, Purple Bricks may have an enticing pitch. For a fixed price, you control your property’s selling process. You also get to save on a traditional real estate agent’s pricey commission.
Regardless of your decision to use an agent or an online service such as Purple Bricks, you’ll want to start comparing mortgage rates. Visit our top rated, financial comparison platform to begin your buying or selling journey today. We compare multiple lenders at once to find the ideal option for you. Visit us today. We look forward to working with you.