The British invasion continues apace. On Monday, the U.K. “flat fee” brokerage Purplebricks announced its expansion to three new markets: San Diego, Sacramento and Fresno. The move comes four months after the tech-focused Purplebricks debuted stateside in Los Angeles and Orange County.
Purplebricks will add 18 real estate experts in these markets, for a total of 60 agents in the U.S. so far, many of whom tally as many as 20 transactions per month through a technology-forward business model that eliminates some commission fees and reduces the role agents play in the process.
“We decided to accelerate our launch strategy in California, which includes Sacramento, San Diego and Fresno,” U.S. Purplebricks CEO Eric Eckardt told Inman. “The reason we picked these markets across California is it gave us different price points and varied demographics.”
Eckardt claims the Purplebrick business model, which eliminates seller-side commission fees and reduces the buyer-side, will save clients in each of the new markets as much as $19,000 per transaction. The average list price across the three markets ranges from $350,000 in Sacramento to around $615,000 in San Diego, Eckardt added.
“Our agents work remotely or virtually in the field because they’re spending time with the consumers,” said Eckardt, who said no physical brokerages will be built to support the new agents. “We have technology that allows us to be more productive and efficient so we do not have a brick-and-mortar store front store or office, other than our core office in Irvine.”
Publicly traded on the London Stock Exchange, Purplebricks disrupted the real estate industry in the United Kingdom, and later Australia, by charging a flat fee to sellers. In the U.S., it charges home sellers a one-time listing fee of $3,200, plus the “buy-side” commission. Sellers must pay the fee either upfront or at closing, regardless of whether their home sells.
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Sellers then receive a multiple listing service (MLS) listing, a lock-box and for-sale sign, on-demand consulting from a Purplebricks expert and Matterport-powered 3-D home tours. They also receive access to a platform designed to approve showings, view feedback and communicate with prospective homebuyers or buyer’s agents–and even negotiate contracts.
Purplebricks works with homebuyers as well, offering a $1,000 rebate out of the buy-side commission toward closing costs. On its website, buyers can search MLS listings, schedule tours, message sellers — either directly or through a buyer’s agent — and submit offers.
Last year, Purplebricks indicated plans to eventually expand across the United States, with an eye toward Florida, New York and Texas. On Monday, however, Eckardt said no new timetable for those stateside expansion plans was available.
“We’re obviously looking at all markets, but right now we’re in the fourth month of operations in the state of California, so we’re going to continue to stay laser-focused on driving seamless execution and making sure we continue to offer great service,” said Eckardt.
Email Jotham Sederstrom.
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