It has been a year since British online estate agent Purplebricks Group Plc brought its flat-fee real estate service to the shores of the U.S. and now it is planning to enter the New York market in the second quarter of 2018.
The company plans to expand further in the United States after having built a leading position in a fragmented industry at home.
Purplebricks, backed by star fund manager Neil Woodford, said it was recruiting local real estate experts in New York and had set up an office in Midtown Manhattan.
“With higher-than-average rates of commission and transaction volumes, New York was the natural first move on the East Coast for Purplebricks,” Chief Executive Michael Bruce said.
The company entered the U.S. market in 2017, making it the company’s third market after Britain and Australia.
The company kicked off in Los Angeles because it “offers the ideal conditions for market testing,” and includes “concentrated population densities and a plethora of properties across all price ranges, thereby providing enormous upside to sellers, buyers and agents.”
The company recently expanded beyond Los Angeles to Fresno, Sacramento and San Diego.
For agents and brokers, the company now is looking to the East Coast as it expands in New York and plans to be active in New York by June 2018.
Purplebricks offers a flat listing fee, which it claims will set it apart in the competitive New York market. The company charges sellers a flat fee of $3,200 to list their home and a “highly competitive” buyers’ agent commission of 2.5 percent once the home sells.
According to Purplebricks, the New York designated market area, which includes more than 20 million people in select counties across New York, New Jersey and Connecticut, is “particularly well suited” for what the company has to offer.
According to a statement, the company claims that real estate commissions can reach as high as 7 percent in the New York area, and with an average home sales price of approximately $560,000, its flat fee model will save buyers thousands of dollars.
The company points out that on a $560,000 home, a seller would save $13,600 by using Purplebricks instead of the paying the standard real estate brokerage commission.
Additionally, the New York area’s high population density and transaction volume should “allow for accelerated brand awareness.”
According to the company, Purplebricks can charge less than other real estate agencies because it offers a technology-focused selling experience.
Sellers are assigned a dedicated “local real estate expert,” who provides advice and full service through closing. Additionally, the local real estate experts provide a comparative marketing analysis to determine the selling price, arrange photography and digital marketing and stage a 3D virtual tour.
Purplebricks is “currently recruiting” licensed real estate professionals in the New York area to serve as the company’s local real estate experts.