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Major real estate player to rattle agent commission model

By James Mitchell
20 July 2016 | 1 minute read

The CEO of the Australian arm of one of the UK’s largest real estate agencies says Australia’s agent commission model is ripe for disruption.

After extensive research, listed UK real estate group Purplebricks has identified a number of similarities between the Australian and UK markets, and found that Australians are more vocal than Brits about the need for change and the amount of money they pay in agent fees.

Purplebricks Australia CEO Ryan Dinsdale told Real Estate Business that the UK’s third-largest real estate group sees a huge opportunity to be the first hybrid estate agency in Australia.

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“Our ambition is to establish the Purplebricks model as the preferred way to sell or buy residential property, and offer Australians a real alternative to the traditional model – and one which is more convenient, transparent and cost-effective,” Mr Dinsdale said.

Purplebricks is currently recruiting agents, or local property experts (LPEs) as the group calls its sales force, and expects to make an announcement on its Australian arm before the end of the year. One of the key differentiators for the group, which has been a major disruptive force in the UK real estate industry, is its flat-fee model.

Mr Dinsdale said that while the real estate space has clearly gone through a huge digital revolution, the traditional commission model that Australians are used to has remained the same.

“We have found a successful model that fits both consumers and real estate agents. Purplebricks will offer Australians a real alternative to the traditional model and will deliver a convenient, transparent and cost-effective way of selling,” he said.

“All of our agents will be licensed real estate agents, and as local property experts they are entrepreneurial by nature. With the Purplebricks model, local property experts will be given their own territory to grow.”

Purplebricks will provide leads to its LPEs, driven in part by a significant investment in upcoming TV and radio marketing campaigns.

“This will remove the majority of an agent’s day-to-day duties and allow them to focus on delivering first-class customer service,” Mr Dinsdale said.

“There are no expensive operating costs for offices with Purplebricks. Our technology and 24/7 support will allow the LPEs to work remotely from their home or chosen work space,” he said.

Every local property expert also has their own individual review score from previous customers, and these are published online.

When Real Estate Business first broke the news that Purplebricks was planning on entering the local market, the story was met with mixed reactions from readers.

However, Purplebricks believes there is room for a new model in the local real estate industry.

“Australians are obsessed with property and we believe there’s a huge appetite for change. The Australian market is more similar than different to the UK, and we have found that people are more vocal than those in Britain about the need for change and the amount of money they pay in estate agent fees,” Mr Dinsdale said.

In the UK the company has been effective in attracting both investors and home owners with its proposition.

[Related: 3 proven ways to become the top agent in your area]

Major real estate player to rattle agent commission model
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Do you have an industry update?

top suburbs

12 month growth
Mirador
103.33%
Bawley Point
98.13%
Walla Walla
90.7%
Byron Bay
86.67%
Kiama Heights
85.93%
Greta
84.14%
Nulkaba
81%
South Hobart
78.78%
Diddillibah
76.25%
Lennox Head
73.98%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

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Enter your email to receive the latest real estate advice and tools to help you sell.