Purplebricks, the United Kingdom-based flat fee brokerage firm, is expanding its reach into the US housing market by launching its operations in New York on April 3.
Founded in 2012 by brothers Michael and Kenny Bruce, Purplebricks is said to have a quickly garnered a 60% housing market share among the top 6 online estate agents in England and Australia. It announced its first profit in December 2016 and moved into California as its foray into the US housing market in September 2017. Speed and effectiveness are obviously watchwords for Purplebricks.
All, however, has not been smooth sailing for this flat fee brokerage firm. There have been controversies abroad over misleading advertising and investor guidance. Apparently, Purplebricks claimed to have sold more homes than it did. And, it claimed to utilize investment funds for projects that were undefined in investor solicitation materials.
Be that as it may, Purplebricks is undeterred in its efforts to garner additional investment capital and to expand its reach into global real estate markets. Alel Springer, a well-known German media entrepreneur, recently targeted Purplebricks with a $71M investment.
According to co-founder Michael Bruce, “this investment is a clear endorsement and reflection of confidence in our business model and global ambitions. It will serve to more quickly bring our highly differentiated, cost effective and consumer centric model to buyers and sellers in new markets across the United States.”
The Purplebricks is a flat fee business model…the consumer pays a flat fee of $3,200 to list a home and then later pays the buyer’s agent a commission when the home is sold. The fee paid when the home is initially listed is non-refundable if the home is not sold. Purplebricks agents list the home and provide all marketing materials.
Eric Eckardt, the US CEO of Purplebricks, said, “Since launching in the US in September 2017, we have achieved tremendous success and recognition in what we consider to be some of the most highly competitive real estate markets in the world (the California market0. Our platform has been well received in all four California markets and we are excited by the promising opportunity we see in the New York (designate market area.)”
Eckardt continued. “The $71M from this investment will be utilized to bring on strategic hires that will bolster our growth, support technology updates and enhance our marketing and advertising programs, giving us expanded visibility in the region.”
As New York’s anthem sings, “if you can make it there, you’ll make it anywhere…” It’s up to you, Purplebricks.