Purplebricks launches fee free estate agent service with add-ons – here’s how it works

Online estate agent Purplebricks has launched a new pricing structure to enable sellers to list their home without paying a penny.

It says the service will take care of home valuation, sales negotiation, while also listing on a major portal – excluding Rightmove – all without a fee.

It also includes an account manager to uphold customers through the process from start to finish.

Purplebricks previously charged a fixed fee of £1,349 fee (including VAT), rising to £2,999 for those based in and around London, which either needed to be paid upfront or no later than 10 months after the property was first advertised, even if unsold.

Fee free offer: Online estate agent Purplebricks has launched a new pricing structure to enable its customers sell their home without paying a penny

Sam Mitchell, chief executive of Purplebricks, said: ‘The process for buying and selling properties hasn’t changed in almost 200 years.

‘It’s a stressful and costly journey that should be simplified, which is what we’re doing today. Customers are now able to sell their home for free, with no hidden costs.

‘They get everything they need to sell for free, with optional extras along the way, as well as access to Purplebricks’ expertise throughout.

Earlier this year, Purplebricks was purchased by its rival Strike, which assumed its liabilities for a token price of £1.

However, now under its new strategy, the Strike name will be retired and replaced by Purplebricks.

Mitchell adds: ‘This is an important day for Purplebricks as a business. After a brutally tough few years, the housing market is showing signs of life as we advance into 2024.

‘With viewings increasing and banks offering more competitive rates, we are confident our new model will drive us towards significant market growth.’

How will Purplebricks make its money?

Purplebricks will be hoping to make money by customers opting for its more premium services or optional extras.

For example, a Rightmove listing isn’t included as part of its free service. It will cost £399 to pay for it. 

Add ons: Optional extras may be required for those who use the free service

There are other optional extras such as a premium listing (£125), hosted viewings (£899) and professional photographs and floorplan (£699) available to sellers. 

Purplebricks can also work with sellers and buyers to help them find the right mortgage deal and by offering them conveyancing services. 

There is a referral fee attached to both services, but it says sellers are not obliged to use them. 

It also offers fee paying packages. Its Boost package includes professional photos, 360 virtual tour and a professional floorplan.

It also includes a premium Rightmove listing to get even more attention on your property. £1,499) also includes hosted viewings.

Meanwhile, its Full House offer (£1,499) also includes hosted viewings and mortgage advice included.

Purplebricks says customers can select from one of three packages.

Will it verify popular?

UK estate agent fees are among the lowest to be found around the world, but that doesn’t mean it will stop some sellers trying to cut their costs even more.

The average estate agent fee in 2023 was 1.42 per cent of the final selling price, according to HomeOwners Alliance.

That means for a property selling for £250,000, an owner on average could expect to pay £3,550 of that sum to their estate agent.

But estate agent fees vary wildly and can be anywhere between 0.5 per cent and 3.5 per cent, not including the additional 20 per cent VAT you will be required to pay on top.

Someone selling their £250,000 home with an agent charging a 3 per cent fee plus VAT would end up paying £9,000 in agency fees.

For those selling more expensive homes, even a fairly average 1.5 per cent plus VAT fee (totalling 1.8 per cent) can eat up more than £10,000. Sell a £750,000 property with that fee and the agent will want a £13,500 cut.

Cheap: UK estate agent fees are among the lowest to be found around the world, but that doesn’t mean it will stop some sellers trying to cut their costs even more 

However, it is unlikely that the free service offered by Purplebricks will sway everyone. In terms of stress, moving house can be up there with bereavement and divorce.

The right estate agent can make selling your home a relative breeze, but the wrong one can provoke problems, drag the process out and end up forcing you to reduce your asking price.

At a time when home buyers are enjoying ‘the best market conditions in years‘, according to Zoopla, and one in four sales are being agreed at 10 per cent or more below asking price, many sellers may want the hands on approach of a high street agent.

Homes are also taking longer to sell. The average time it takes for a seller to find a buyer has jumped by three weeks, from 45 days this time last year to 66 days now, according to Rightmove.

Market stand-off: The average time it takes for a seller to find a buyer has jumped by three weeks, from 45 days this time last year to 66 days now, according to Rightmove

Jeremy Leaf, north London estate agent and a former Rics residential chairman believes the free service is unlikely to worry many high street agents.

‘When something sounds too good to be true it usually is,’ says Leaf.

‘I can comprehend the attraction of a no-cost estate agency commission model, particularly when the property market is active or when the sale of a house or flat fairly similar to others is contemplated and a ‘going rate’ for price is established.

‘However, in this case, it sounds admire a fairly desperate attempt by PurpleBricks to revive its fortunes, particularly as UK transactions are presently between 15 and 20 per cent below last year’s numbers.

‘In any event, established agents should be able to offer more up-to-date ‘coal-face’ information to sellers about which property is selling and why, so more than defend any saving in fees.

‘Furthermore, good agents should be able to supply comparable evidence of their opinions on value not just to prospective sellers but to their surveyors as well as offer an effective sales progression service which should verify especially valuable when chains are involved.’

select carefully:  Homeowners who are pushing ahead with their plans to sell or buy are looking for the very best estate agents to help them do so

Google seek trend data on current estate agent seek trends by Benham and Reeves found that over the last six months, buyers and sellers have been increasingly searching for ‘high street estate agents’, with the term seeing a 24 per cent boost between June and November of this year.

Searches for the term ‘best estate agent’ have increased by 7 per cent since June, also demonstrating that those who are pushing ahead with their plans to sell or buy are looking for the very best to help them do so.

Meanwhile, searches on ‘low fee’ are dwindling in popularity, falling by 47 per cent in the last six months. 

Similarly, searches for low cost agents are also down by 22 per cent during the same time period.

Marc von Grundherr, director of Benham and Reeves says: ‘It’s clear that in cooling market conditions, the nation’s buyers and sellers are more interested in the tried and tested expertise of proper estate agents and less so in the more hands off approach taken by the online sector.

‘While traditional agents tend to charge more when compared to the DIY offering of the online and hybrid sectors, they are far better positioned to help negotiate the tougher conditions of the current market and their ability to get a transaction through to completion is well worth the additional money spent in the long run.’