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Purplebricks scraps money back guarantee earlier than expected

The troubled agency drops the guarantee five days before it said it would just a few weeks ago.

David Callaghan

purplebricks

Purplebricks has withdrawn its ‘money back guarantee’ earlier than pledged, The Neg can reveal.

The struggling company wasn’t due to stop offering the guarantee until next Monday, 25 July.

But it disappeared from the ‘selling’ page on its website, five days early, which now only features information about its fixed fee prices.

Earlier this month, Purplebricks raised its fees and announced the money back guarantee was going at the same time.

helena marston

New CEO Helena Marston (pictured) said then: “When this [money back guarantee] was introduced, its objective was to inspire confidence among customers that we would deliver for them, and if we did not, they had the opportunity to get their money back.

“However, feedback shows it was not highly valued by customers, and too many of our conversations in the living room have been taken up discussing the impact of failure, rather than demonstrating why our affordable proposition will succeed,” she said in an internal memo to staff.

“We hope its removal will support our field agents and focus all their attention on communicating our affordable fixed, upfront fee and build confidence with our customers that we will sell their homes.”

Second lowest ever

Under the new fees, vendors selling a property outside London now pay a standard fixed-fee of £1,199 and £1,999 in the capital.

The firm’s share price slumped to 14.34p earlier this month, its second lowest level ever, and has only improved slightly to 14.74p since then. In May it revealed instructions were down 31% year-on-year.

The company is planning to publish its annual results in early August, when Marston is expected to outline how she will turn its fortunes around.

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July 21, 2022

2 comments

  1. The difference on the models Kelvin, is that Purplebricks takes the cash at point of istruction, the traditional agent on day of completion, so two very different approaches. In 2022 it amazes me why all agents do not as an industry say we are charging you Mr/Mrs vendor £600 to list upfront, that covers our marketing costs, with the balance if we get you an exchange.

    Given agents complete on 50% of inventory they list, they may sell 70% but with a 30% cancellation rate, they only get paid for marketing two and exhanging on one. The homeowner who sells and exchanges is subsidising the vendor who fails to sell, they are getting a ‘free’ ride. Adopting this system agents cashflow would improve, and agents could actually reduce their fee by 30% and still make the same profit a win for all.

    Purplebricks changed the psyche of the vendor from subservient agent, cap in hand, please instruct us its free – you only pay at completion model, to if you are serious aboout moving there is a cost let us share that cost and risk.

  2. What was the difference between a ‘money back guarantee’ and estate agents charging only on a sales completion? They are now going back to charging, whether they sell or not and the likelihood of that happening is reducing as the market changes and slows down.

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