Purplebricks Share Discussion Threads

[buywell3] 29/11/2018 15:07

stantini

Very good work 9.5/10

Rightmove is a veritable treasure trove if you mine it properly ain't it.


Have you noticed the percentage of houses for sale that agents are now reducing their asking prices recently ?

Also the numbers of new properties for sale coming to the market

Some of which though are just agent switches to kid mug punters

Rightmove will perhaps also suffer at some point as the housing market drops further

[andy] 29/11/2018 14:46

stantini,

I believe it is the follow throufh and accessiability to the agent when things get sticky that sets the local agent apart from an online servoce.


PURP agents are commissioned, so incentisised to sell rather than provide an aftercare service.

I believe that will become an Achilles heel for PURP, once property rices start to fall and chains collapse.

[andy] 29/11/2018 14:43

chucko1,

Exactly, brand loyalty is not there, so whereas the High St. dinosaur has a window to market his houses for sale, PURP has to continually advertise in expensive media to reach potential customers.

[stantini] 29/11/2018 13:22

Well at the start of 2018, there were 7 online estate agents listing more than 1,000 properties, Hatched the oldest online agent closed in September, leaving 7.

Tepilo, having lost 7.5M over two years, merged with Emoov who managed to lose nearly 20M over two years. This was four months ago, now they are likely to go under. That leaves 4 agents.


YOPA, Housesimple, Purplebricks, Doorsteps. I invite you all to look at their company accounts today and tell me if any one of these has ever made a profit.


As the owner of the now defunct Hatched commented (and the Skipton Building society own two traditional agency brands that will make nearly 70M profit this year) you can sell property via an online agency - but the cost of getting the client/vendor in the first place is way higher than the fee you charge.

So back to that TV advertising and other media advertising, with no bricks and mortar office, comes lack of brand awareness.


Three months of no TV commercials with Sir Mo Farah running through a wall, or smug vendors saying that they paid no commission (but they did pay a fee even if they do not sell) and very soon new vendors will not remember to call the online agents.

Brand and heritage is everything, vendors go back to the agent they used and had a good experience with, if online agents sell 50% of the stock, then 50% of their clients have paid upfront for nothing, and it does not take long to erode your customer base rather than grow it.


Also the upfront cost is getting ever larger around £1,500 which is only half the national average fee of a traditional agent, when Purplebricks started it was sub £1,000 and there was a clear distinction, now the gap is closing, and in a tighter market vendors will vote with their feet.


Rogthepodge, I am not a crusader for traditional agents, as I do not now own an estate agency, but I do mentor a number of estate agency businesses, and the most common thing they say about online agents is that they do almost zero sales control, leaving it up to them.

Why? well the onliners already have a fee, if a property sells great if not great, whereas the traditional agent only gets paid on completion - so the focus and business model if different.

[chucko1] 29/11/2018 12:59

Andy (7080), this is, I think, the central point. What is brand loyalty regarding an estate agent? Well, I have bought and sold loads of places over the years, and cannot recall using the same provider more than once. Of course, maybe I’m just odd (I will not be offended by any response).

So then the only purpose for the large marketing spend is if it can really differentiate the offer - and for me, that would be the completion rate. Anyone can match the price should they need to. So, all that marketing spend, and we have no idea what the completion rate really is in the case of PURP.

Not a reason to invest at all at this price as even more of the cash is gong to get spent on brand awareness which will, in of itself, generate a puny return.

[rackerrs1] 29/11/2018 12:56

wow - so you are neither long nor short here and yet you spend so many hours commenting.

wish i had your amount of spare time.

[andy] 29/11/2018 12:41

3dwd,

I wish IG would allow a short, last time I tried they said "no borrow available".

This looks so overvalued.

[3dwd] 29/11/2018 12:20

I added to my short position today.. As I see 3 main factors.. Australia.. Valuation.. Woodford... Simply overvalued.. Plus UK economy.

[andy] 28/11/2018 19:21

Philo,


You hit the nail on the head with the constant need for marketing spend for PURP, as house moves are infrequent at best, and therefore impossible for PURP to build up a loyal following, hence requiring constant and expensive advertising.


I can name some of my local estate agents and would know who to go to straight way if the need arose.

[cowtrader] 28/11/2018 19:15

hear hear look at this Rog has been completely decimated again lololol with no logical or reasonable response to philsopherad1's well-worded post

[philosopherad1] 28/11/2018 18:34

I'm not so sure Roger dear chap. It may be that the express train in on the PB line. If the enterprise runs out of the funds to maintain the huge marketing commitment they have undertaken to date they will experience difficulty in maintaining momentum, imo. If they have to shut down the Australian and US operations, as looks increasingly possible, then that will be a considerable blow to the overall strategy.

[rogthepodge] 28/11/2018 17:32

Muppets
You are in denial still, and won't see the express train heading for bricks and mortar agents
Don't say I didn't tell you lol

[philosopherad1] 28/11/2018 16:37

FYI. I was fortunate enough to have sold my business a few years back so have no 'axe to grind' with anyone.

[philosopherad1] 28/11/2018 16:35

After 35 years in the business I think your analysis is correct Stan. I suspect, like myself, you have seen quite a bit during your time and although the current circumstances are different to what has gone before, there remains a reliance on people (staff/operators) to do the business, be that money upfront or ns/nf. I remain of the opinion that PB = agency lite and has serious obstacles to overcome if it is to be profitable going forward.

[henchard] 28/11/2018 09:54

Andy, City analysts have been urging PURP to give completed sales numbers for years, but so far the company has flatly refused to do so.

[andy] 28/11/2018 09:16

stantini,

Excellent posts by you, and thanks for publishing some statistical information that helps people form a judgement.


Having someone from the trade here certainly helps, and one that can put some real information rather than just opinion.

I have noticed that PURP do not declare the number of actual sales

[stantini] 28/11/2018 00:53

You are all hilarious - especial cuddles for rogethepodge - Purplebricks share price may well flutter up a little as there is talk that Emoove/Tepilo/Urban are about to hit very stormy waters, which potentially means a bigger player could absorb them or their vendors, or if they should fail, it would leave only 4 major online only players: -

Purplebricks, Yopa, Housesimple and Doorsteps – my new favourite as it sounds like my sandwiches.


Doorsteps - yummy - has a 20-year old CEO – who has never bought a house? and I am not sure owns a car? but is in the rich list of 2018? – but only pays himself £1k a month?

But to be fair they have raised 1.2M through Crowdcube in just under a year, and rounded everything off this week by offering to sell property for a £1, this company is one to watch, they are seriously going to spend a lot of other peoples money.

And the company is valued at over 10M, (just do not look at last years accounts, at companies house, as this will spoil everything.) Maybe the will start selling property for a Dollar a go in the US, as global growth seems to be key. Hmm - thoughts?