Purplebricks has officially launched in the US seven months after it raised £50m from the City to fund its expansion over the pond.
As announced in June, Purplebricks’ US launch has kicked off in California beginning in Los Angeles before being rolled out across the state and later other key states and cities across the US.
Its American team, which is led by CEO Eric Eckardt, has also revealed its fee structure, which has been adapted to fit the US way of selling properties. Agents charge vendors a 5-6% fee to sell their home and then give up to 3% of their fee to the buying agent who successfully introduces a purchaser.
Purplebricks is to instead charge vendors in the US a flat fee of $3,200 to list their homes, although they will have to pay the buying agent’s fee when the property is sold. As in the UK, vendors will be able to delay the up-front listing payment by effectively taking out a loan to fund it.
But buyers who purchase their properties through Purplebricks without using a buying agent will receive a cash payment of $1,000 when they buy the property, effectively inducing purchasers to cut out buying agents and ‘go direct’.
One unusual feature of the launch is that Purplebricks is partnering with US-based 3D virtual reality firm Matterport to create ‘virtual viewings’ of potential properties and that, if it proves a hit with US house hunters, will be rolled out across it Australian and UK operations.
“Launching Purplebricks today in the US is the single biggest moment in the Company’s three-year history and a proud moment for me personally,” says Michael Bruce, Group CEO of Purplebricks (pictured above, in California).
“It is testament to the quality and dedication of the team that we have achieved this ahead of schedule and expectations. We are excited about the opportunity, in this $70bn market, while mindful of the challenges.”
The Purplebricks US team is bolstered by several people with UK backgrounds including CFO James Davies, who until recently worked at betting firm William Hill; CTO David Kavanagh who has worked at Tesco, DEFRA and BT; and Operations Director Andy Harris – who has worked at Jackson Stops and Countrywide.