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 sellers or buyers 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.
While their pitch is enticing, these benefits come with drawbacks.
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. The lack of offices and the expenses they entail allow Purple Bricks to charge clients less.
Purple Bricks claims that this also allows them to dedicate more time towards clients, resulting in faster transactions and better customer service.
Purple Bricks advertises that you'll have everything you need to sell a property for less than $3,000. There's an upfront fee of $499, and if your home's sale is a success, there's an additional $2,499 fee.
The Purple Bricks fees cover a handful of services. You'll get a local property expert (realtor) who will assist you in negotiations and property viewings, as well as "for sale" signs for your property.
They'll provide an advert for your property including the copywriting, the floorplan, and high definition photos of your home. You'll also get a listing on Realtor.ca and Purplebricks.ca.
Other services include phone support and access to the Purple Bricks' online portal.
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 a 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 property's value in the current local market.
Once your property gets appraised by their agent, they then prepare the advertisement. They'll submit it 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 also submit their offer online for a property. Sellers can then see all the offers made, and they'll have the option to accept or reject them.
When the seller accepts an offer, the conveyancing process begins. Purple Bricks provides a support service to help the seller with any questions they may have. However, if you examine the individual parts of the post-sales process, you'll see that a lot of work relies on the seller.
The seller must provide a lawyer's details within 24 hours of accepting an offer. The seller must oversee the lawyer's progress on the paperwork and continue to follow up if needed.
Purple Bricks is responsible for taking note of the lawyer's details provided by a seller. They'll also ensure that the mortgage arrangements are set. They'll advise and support the seller if any problems arise.
The lawyer will be the one to obtain leases and legal documents and liaise with the buyer's lawyer. Agreeing on exchange and settlement dates is also the lawyer's responsibility.
Problems that may arise from reports and mortgage positions will be the seller's responsibility. The lawyer and Purple Bricks will only be available for support.
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 all inquiries. 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.
Purple Bricks' realtors are 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.
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 an online real estate agent will require you to get more involved.
Traditional agents secure 13% higher prices than private sellers for similar properties. A real estate agent is a professional who does the work discussed earlier 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 with these deals ends up being a waste of time and money.
Professional realtors review potential buyers before they hand you any paperwork.
If you're hoping to sell your home, Purple Bricks can be a great platform. Many home sellers mentioned in their reviews that they felt satisfied with how Purple Bricks advertised their homes. A majority of the positive reviews also praised the ability to manage the sale online.
However, there're also negative reviews coming from buyers, claiming many complications with the online system. Buyers often found it difficult to contact a real person through Purple Bricks.
In the last year, Purple Bricks only sold half of the properties listed.
For first-time 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. However, you should be wary of the complications that may arise during the sale close process.
Whether you prefer to save on fees but take on more risk, is a personal decision that'll depend on your financial situation and the amount of time you can dedicate towards the sale of your property. Knowledge is key when it comes to making the decision to buy or sell your home. What method you use could mean the difference of saving tens of thousands of dollars or losing tens of thousands of dollars. What cannot be compromised however, is your homeowners' insurance. We find that more and more folks are turning to companies like Onlia to begin their journey towards home ownership, or even to switch from their current plans. They offer unbeatable rates and coverage, and additional discounts should you bundle their services - we love that.
If you're a buyer and looking for the best mortgage rates on the market, visit our Mortgage page! We look forward to being part of this excited new phase in your lives!