How Does PurpleBricks Make Money: PurpleBricks Business Model Explained

PurpleBricks is a UK-based online real estate agency that has disrupted the traditional real estate market with its unique online platform.

Purple Bricks was founded in 2012 by Michael Bruce, Kenny Bruce, and David Shepherd. The company aims to make home buying and selling more affordable and accessible.

Although Purple Bricks offers multiple free services, they do make money by charging customers a fixed fee for selling their homes. Plus, they earn from add-ons such as professional photography, EPC, Rightmove listing, and floor plans.

Now, if you’re curious about how they manage to offer such low fees for sellers, read on to see PurpleBricks’ business model and how they make money in detail.

Key Takeaways

• Purple Bricks is an online real estate agency that provides customers with a range of services to sell and buy properties.
• The company charges a fixed fee to sell properties and offers additional services at an extra cost.
• PurpleBricks’ streamlined model, with reduced overheads, allows them to remain profitable despite lower fees.

What Is Purple Bricks & What Does it Do?

PurpleBricks is a hybrid estate agency that combines the convenience of the online world with some elements of a traditional high street estate agent.

The company is supported by venture capital firm DN Capital, as well as Neil Woodford, Paul Pindar, and Errol Damelin.

Unlike standard agents who charge a percentage commission, PurpleBricks’ business model is based on a fixed upfront fee.

However, when Purple Bricks first arrived on the scene, they were not well received by everyone.

The company has faced criticism from some quarters for its business model, with many criticizing the company’s fees and the services they offer as not as comprehensive as those of traditional estate agents.

Despite this, Purple Bricks has continued to grow and has become a major player in the UK property market.

Check Out Next: How Does AccuWeather Make Money: AccuWeather Net Worth & Revenue Streams

How Does PurpleBricks Work?

The company’s main focus is on providing customers with a low-cost way to sell their homes.

Purple Bricks operates on a free basis but charges a fixed fee for additional services as you require.

This means that customers pay a set fee for the services that they receive, regardless of the value of their property.

Selling your home with PurpleBricks generally follows these steps:

• Valuation: Get a free valuation from a PurpleBricks local property expert.
• Instruction: Select add-on services (if desired) and pay the fixed fee.
• Listing: Your property details and photos are listed on the PurpleBricks platform and popular property portals.
• Viewings: Manage viewings through the PurpleBricks app, with the option for accompanied viewings by a local property expert.
• Offers and Completion: Receive support in negotiating offers and completing the sale process.

The company’s fees are typically lower than those charged by traditional estate agents. It typically costs £899 to market a property in the UK, depending on the location.

Here’s a breakdown of their packages:

The company’s services include property valuations, professional photos, viewings, and advertising on major property portals.

Plus, PurpleBricks also provides customers with access to a dedicated account manager who can help them through the selling process.

Check Out Next: How Does Trading 212 Make Money: 7 Ways T212 Sustains Its Business Model

How Does PurpleBricks Make Money?

Now, let’s dive into the core of how PurpleBricks earns its profits:

1. Fixed Upfront Fees

This is the foundation of PurpleBricks’ revenue streams.

Sellers pay a fixed fee. The fee varies depending on location and chosen package but normally it’s £899.

(A fee of £1,399 applies if you live in London, as well as in certain postcodes in surrounding areas.)

2. Optional Add-On Services

PurpleBricks offers optional services that sellers can add, generating additional revenue. Such as:

• Professional photography
• Premium listings on property portals
• Accompanied viewings
• Conveyancing services

3. Mortgage Referrals

PurpleBricks partners with mortgage brokers and earn a referral fee when a customer uses their recommended service.

4. Conveyancing Referrals

Similar to mortgages, PurpleBricks partners with conveyancing firms and collects fees for referrals.

5. Commission from Buyers 

PurpleBricks claims that it earns more from buyers than sellers.

This model allows PurpleBricks to offer a fairer, more transparent way to sell homes and make money, including the option to sell your home for free.

Check Out Next: How Does Bilt Make Money: A Complete Analysis

Is PurpleBricks’ Business Model Sustainable?

PurpleBricks’ business model is certainly innovative and attractive for sellers and buyers both as compared to traditional commission-based agents.

However, there are some points to consider:

Competition: The market is getting more competitive, with both traditional estate agents adapting and new online rivals emerging.

Market Conditions: Economic downturns can impact housing markets, potentially affecting PurpleBricks’ revenue streams.

Customer Satisfaction: Mixed reviews exist regarding PurpleBricks’ customer service. So, maintaining consistently good service will determine its long-term success.

3 Lessons We Can Learn from Purple Bricks’ Success

1. Disrupt the Status Quo with Innovative Solutions

Michael Bruce and his brother Kenny revolutionized the real estate industry by founding Purplebricks, a hybrid estate agent that combines online and offline services. They disrupted the traditional agency model by offering a more efficient and cost-effective solution, which resonated with customers.

2. Focus on Customer Experience and Satisfaction

Purplebricks’ success can be attributed to its customer-centric approach. Michael and his team prioritized providing an exceptional customer experience, which led to high satisfaction rates and positive word-of-mouth.

3. Be Adaptable and Resilient in the Face of Challenges

Purplebricks faced significant challenges, including regulatory hurdles and intense competition. However, Michael and his team remained adaptable and resilient, pivoting their strategy when necessary and persevering through difficult times.

FAQs About PurpleBricks

What is purplebricks?

PurpleBricks is an online hybrid estate agency platform that enables homeowners to sell properties with a fixed upfront fee model.

How much does PurpleBricks charge?

The fees vary depending on location and chosen packages. It’s typically £899 to market a property in the UK but you can find their pricing structure on their website.

How do PurpleBricks make their money?

PurpleBricks makes money primarily through fixed upfront fees, optional add-on services, and referral fees from mortgage brokers and conveyancers.

How does PurpleBricks work for buyers?

PurpleBricks functions like traditional agencies for buyers, with listings viewable online and the option to arrange viewings with sellers.

How does PurpleBricks work for sellers?

Sellers list their property on PurpleBricks, manage viewings, and negotiate offers with support from the platform and local property experts.