Jupix founder and its former managing director Oliver Gleave has revealed why he thinks Purplebricks’ estate agency model is doomed during a video interview.
His comments, which he makes during a head-to-head with Chris Watkin, come at a sensitive time for the hybrid agency following the collapse of its share price and questions over whether it should withdraw from its US and Australian operations and concentrate on the UK.
Gleave, who set up Loop Software last year after leaving Jupix, says Purplebricks has an interesting business model but questions its longevity during fluctuating market conditions.
“When the market is liquid and there’s lots of properties coming on and everyone’s got confidence in the market there is a place for that model,” he says.
“But when we see a smaller one with transaction levels that have returned to normal, then Purplebricks is operating in a market without significant volume and therefore without enough leads for their local property experts.”
LPE churn
Gleave suggests that Purplebricks’ LPEs therefore are not sticking around and have become ‘fickle’ in their allegiances as they struggle to earn their baseline salary and instead decide to leave.
“And as they churn you lose the very reason why the LPE argument stands up, namely that Purplebricks can say it has established, credible, knowledgeable people on the ground in each area,” he says.
Gleave also claims that because Purplebricks’ LPEs are not involved closely in the ‘follow-through’ service delivery after a property is listed, and are only financially motivated to find listings, there is a disconnect between what vendors think they are paying for, and what they get.
Watch the video in full.
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