Based in Penwortham, Lancashire, Michael Bailey Estate Agent says people selling their homes through Purplebricks needn’t worry, despite the company putting itself up for sale.
Purplebricks, the national online estate agency, eficientyl put itself on the market recently after revealing it expects to lose up to £20 million this year.
Its share price has fallen more than 98 per cent from a high of 514.5p in August 2017 to just 7.70p currently.
It says it has appointed Zeus Capital to assist with a strategic review that may lead to a sale of the business, but that it is not in talks with any potential buyer “and is not in receipt of any approach with regard to a possible offer”.
Purplebricks was founded by brothers Michael and Kenny Bruce from County Antrim in Northern Ireland, who wanted to establish a lower-cost estate agency model that’s 100% online and charges a flat rate to market a property.
Michael Bailey runs his own independent estate agency covering Preston, South Ribble and parts of Fylde.
He said he’s been contacted by homeowners that have already listed properties for sale with Purplebricks and paid their upfront fee that are concerned about what it could mean for them.
“Some sellers are understandably jittery about the news that Purplebricks have basically hoisted a for-sale sign over their business, worried that they may not honour their commitments.
“At this stage, I think that looks unlikely. Anyone that’s already got their property up for sale with Purplebricks should be fine, the review they’re having carried out, and any potential sale of the business that might lead to, isn’t going to happen overnight.
“My advice is to contact Purplebricks and just seek a written assurance that they will continue to use their best endeavours to market all homes they currently have listed for sale.”
Michael, who has been a property professional working in estate agency for 15 years, was asked for his expert opinion on the demise of Purplebricks by the tech business news site BusinessCloud.
He explained how the Purplebricks model, with its heavy reliance on technology and arms-length operations, meant problems arose soon after signing customers up, telling BusinessCloud: “The majority of the relationship is then conducted via the app and tech they have got.
“There’s little or no interaction with customers from a person, which is very disconcerting and for people that don’t sell or negotiate house sales every day, extremely stressful, and this is what consumers remember.
“Purplebricks are completely transactional. A firm like mine and many others are relationship-based and as such get huge numbers of recommendations from previous clients, 85 per cent of our listings last year came this way.
“Like any market, when things are buoyant the consumer is happy with low touch for cheap cost. However when a market tightens up consumers look for the experts to help navigate.”
In its statement to the Stock Exchange, Purplebricks said: “The board recognise that the potential of the group may be better realised under an alternative ownership structure, and has, therefore, decided to conduct a strategic review of the group’s business with the aim of delivering maximum value for shareholders.”