Adulting can be tough- there is so much to learn! I’m still learning. Lately, it’s been about buying and selling property. We have just purchased our first investment property, with the ultimate goal of having several- some for a shorter-term investment and some for growing over time. This is our retirement strategy given that, as a freelancer, I have almost no super, and property is a pretty sure thing.
It’s been reported that in Sydney alone the property prices are growing by $10k a month. I know that the house we built 6 years ago cost us $840k and it’s now worth $1.7m. It’s crazy! We have just bought near Brisbane in a new suburb as part of our investment plan and I’m looking forward to watching our portfolio grow, although it does mean that I’m having to learn a bit about property management, negative gearing and tax breaks, which I know nothing about.
But with buying eventually comes selling and that is an area I haven’t dealt with yet, but I have heard friends talk about marketing fees and commissions, comparing rates and hearing stories about agents and buyers. So when I was given the opportunity to learn more about Purplebricks, a new agency in town that is disrupting the traditional commission-based model of real estate, I was keen to hear more.
Purplebricks was set up originally in the UK, by two brothers; Michael and Kenny Bruce They looked at the traditional commission-based model of selling houses and saw a better way to do it. So they started Purplebricks and are the first agency to set a flat fee for marketing and selling your house. They have just launched in Sydney after successfully launching across Melbourne, Brisbane, the Sunshine and Gold Coast in August 2016.
Traditional Commission Structure
Let’s take a quick look at how the commission structure works first, for those of you that have no clue, like me!
– Agents usually charge around 2.2% of your final sale price as their commission.
– You then also pay a marketing fee of around $2,500 (but this can be wildly more dependant on where you live and the level of marketing you choose) for your professional photos, online/newspaper listings and a signboard.
-So, if you sell your house for $1m, you’re paying around $22k to your agent plus the $2500 for marketing.
-Purplebricks has set a flat fee of $5500 for selling your house, regardless if it is worth $500k or $5m, which can end up being a massive saving for you.
What do I get from Purple Bricks?
So what do you get for your $5500?
Purple Bricks provides the following services:
-24/7 access to the Purplebricks app where you can see how many viewings have been booked, requested inspections, put in offers and so on. You can also message directly with potential buyers who might have questions about the property
-Representation by a Purplebricks Local Property Expert in your area that will take you through the process from start to finish and assist you with negotiating with buyers, exchanging contracts and settling.
-You can run your own inspections at times that suit you, rather than in business hours only.
-There is also a central property team you or your buyer can contact 24 hours a day to ask any questions about your property.
-All your marketing including online listings, photographs, and a signboard.
You can upgrade your Purplebricks representation to have an agent run all your inspections for an additional $550. If you would like an auction the flat fee is $6600, and this includes your auctioneer and private home inspections for potential buyers.
Purplebricks has only been in Australia for four months but they have already exchanged or settled on over 150 houses, and estimate that they have already saved Australian sellers $1.7m in commission fees too!
Check out their TVC to get a good sense of how they work-
To find out more information visit www.purplebricks.com.au