As Michael Bruce sat talking to his brother Kenny in the boardroom of their traditional estate agency business he said “Kenny why is it that we see so many first class people in this industry who want to give great service and look after customers but the minute you mention the word Estate Agent everyone has a wry smile on their face and an inner feeling of unhappiness?” Michael also enquired “why is it that many millions has been spent all around the world helping buyers know what is on the market, what is selling and for what price etc but nothing had been spent on sellers, the people who pay the fees and create the revenue in the industry?” He then asked “How is it ever going to be possible to guarantee a great service when the industry has such a high turnover of people, as much as 40% annually? How can you deliver on your promises when 4 out of 10 of your great people don’t turn up to the game?” Four simple questions sent the brothers minds into overdrive. Four simple seeds of thought were the start of the revolution, the seismic shift that is happening in the estate agency industry.
The brothers first looked at whether they could operate Purplebricks alongside a traditional model and came to the conclusion that sending two people to the same house, one armed with a £1,000 fee and one with a £4,000 fee, knowing that the one with the £1,000 fee was going to offer at least as good a service if not better was now going to be a credible model for future growth and success. The desire and indeed the need to make a change, to make a difference was well and truly planted and they sold the traditional estate agency business to bring to life the Purplebricks dream.
They did not rush to market. They spent 2 ½ years preparing to launch a business that was going to hit the ground running, had ambition to scale quickly and would need to educate a consumer on their being a real credible alternative to the traditional model. They spoke to 1000’s of consumers about what they loved about the industry and what they did not, what they liked about the process and what they did not and what was abundantly clear is that people are not yet ready and may never be ready to hand over the sale of their property entirely to technology. As a result the model became a mix of great people and great technology that made everything work automatically and systematically 24 hours a day.
People used to go into estate agency offices because if they wanted to know what was on the market they would have to register with an agent and they would be in control of telling you what was on the market or coming to the market. With the launch of rightmove and zoopla the balance of power changed, moving away from the agent to the buyer who could see everything that was on the market and only needed to engage with the agents that had what they were interested in viewing. As a result the need for offices and all the costs and infrastructure that went with them were no longer required. They were an unnecessary financial burden in the commission based cost structure of the traditional estate agent.
With the advent of the internet, internet banking, shopping online and the speed and efficiency in which things could happen without waiting for a shop or office to open started to change the mindset of the consumer. They wanted everything to be more instant and transparent. Why can’t I book a valuation like I can a haircut or a table at a nearby restaurant? Why can’t I book a viewing, give feedback, make an offer, negotiate an offer, agree a sale or be treated like an adult and be able to speak to the buyer direct? Why can’t I see clear and transparent information on the performance of my marketing and why am I paying a percentage commission when the work is predominantly the same for a one bed flat as it is for a four bed house? The Bruce brothers knew that technology could be the answer to all these questions.
The Bruce brothers invested all of their money into building technology, employing an infrastructure, creating TV adverts and a brand in addition to the recruitment and training of Local Property Experts for launch. They then attracted further outside investment to scale quickly post launch. The Purplebricks brand was launched on the 13th April 2014 in one region of the UK with 30 Local Property Experts. The business grew region by region across the UK and became national by July 2015.
Purplebricks successfully floated on AIM in December 2015 at 100p per ordinary share. Since then the Company has expanded its market share considerably, launched into the £3.3bn Australian estate agent market in September 2016 and more recently into the US in September 2017.
Since the launch of Purplebricks customers can now engage with the market 24 hours a day. They can book valuations instantly, schedule viewings, give feedback, make offers, negotiate sales and instruct lawyers 24/7 with the click of a button. They can change their price and it instantly changes all of their marketing and buyers can arrange viewings without waiting for an estate agents office to open. Sellers, buyers, Landlords and Tenants can communicate with Purplebricks at any time, day or night. Everyone asks why this was not normal sooner.