One of the most used avenues for lead generation agents use is to call FSBO’s in their local market. Some of the common reasons why homeowners opt to sell their home on their own typically ranged from looking to save money to envisioning little effort involved in being able to sell their own home. Just how big is the FSBO market in the U.S.? According to the field report generated by NAR, FSBO homes accounted for a total of 8% of homes sold in the States. This report does not include the number of houses placed on the market by homeowners. The report also shows that the typical price of homes sold by FSBO’s was $185,000 compared to $240,000 sold by an agent. There are numerous articles showing the advantages of using an agent, allowing homeowners to net more money by selling for a higher price compared to saving the money by not paying commission.

The top 5 areas FSBO’s had the most difficulty in when selling their home included:

  • Pricing the home correctly 18%
  • Preparing the home for sale/ fixing property 13%
  • Understanding the required paperwork 12%
  • Selling within the timeframe they had anticipated 3%
  • Having enough time to devote to the sale 3%

It seems that two of the largest motivators for FSBO’s came down to saving the commission paid to agents and the lack of value agents provide from their perspective.

These two pressure points are the foundation of what PurpleBricks was created on. If you are in North America, chances are you may not have heard of PurpleBricks just yet, and furthermore, how they will impact the real estate industry. PurpleBricks, founded in 2014, labels itself as a hybrid between FSBO and a full-service agent type of service. It charges home sellers a flat fee (approximately £1000 in the UK and $4500 in Australia), with no added commission. Homeowners who choose PurpleBricks are not completely on their own, they still meet with local agents to help them throughout the process.

Here is how it works:

Step 1. Book a free valuation: Homeowners book a date and time for a local property expert to meet with them

Step 2. Receive Advice: The local expert will meet with homeowners and provide their evaluation and advice- with no obligation.

Step 3. Hire PurpleBricks: Sellers would then choose to list with PurpleBricks, receiving services such as photos, floor plans, property description, advertisement and online listing, all done with the local expert.

Step 4. Monitor Traction: Sellers can monitor the traction, receive viewings and feedback by accessing the online platform

Step 5. Accept Offer: Once they have accepted an offer, the local expert will provide advice and guide them through the process to complete the deal.

Now, PurpleBricks is not the first online real agent service, especially in the UK, as this concept has been around since 2004. Other online real estate agencies such as eMoov, HouseSimple and Teplio offer a similar service. Their model, however, has been more of an A La Carte menu, offering flexibility to pay for specific services. What makes PurpleBricks’ model different, is that it offers one package, a flat fee and an ‘I don’t have to think’ menu. This self-labeled hybrid approach has proven to be the model needed, as PurpleBricks is now the leading online agency. They are selling more houses than their 4 largest competitors combined, accounting for 2.6 billion dollars of volume within the 6 months alone.

According to, their success is attributed to 3 main factors:

  1. Aggressive advertisement through T.V and radio
  2. Simple pricing structure with a set fixed fee
  3. Offering a hybrid between FSBO and full-service agents

PurpleBricks, a UK company, saw a loss of £6 million in 2015, however, they were able to quickly turn this around by finally showing a £300,000 profit by December 2016. Their leadership in the marketplace quickly grew, making a sale every 16 minutes, forcing their competitors to follow suit with a flat fee model and referencing themselves as a hybrid service. PurpleBricks also expanded in Australia in August 2016, and also have their eyes set on expanding into France and Germany.

PurpleBricks has also announced that they will be entering the U.S. market, which accounts for approx. $70 billion worth of commissions in the real estate industry a year. They have allocated £50 million for their expansion into the U.S. market, and have seen a 15% increase on their shares after the announcement. Their rollout strategy into the U.S. market is to begin by making a presence in certain key markets across different states.

PurpleBricks’ model is not a replacement of real estate agents, as it still requires agents to work together to service clients. Michael Bruce, CEO of PurpleBricks, provided insights during an interview with Kevin Turner at During this interview, Bruce explained that one of the largest advantages for homeowners was the flat fee of paying only £1000, instead of £4500, with traditional real estate services, combining lower fees and value into one. Bruce also went on to explain the PurpleBricks provides quality agents without requiring agents to pay a franchise fee, as they would with traditional brokerages. The flat fee would be divided between PurpleBricks and the real estate agent, with PurpleBricks also earning revenue from other avenues such as mortgages. The only add-on they offer homeowners are auctions with an additional fee of $850, and full-service home viewings conducted by agents for an addition, for $385.

U.S. will not see a change overnight, however, the concept only took approximately a year to catch on in the U.K.  Their structure is not only a change for real estate agents but also to real estate brokerages. PurpleBricks is proving that a brick and mortar business is not necessarily needed to find success, as with other industries. Of course, with any new concept, the structure is not flawless for everyone. There is a close eye, however, on the profit, volume, and rate of growth of PurpleBricks. In any industry or business formula, value seems to be at the core. This may propel brokerages to provide more value to their agents, and agents to demonstrate more value to their clients.

  • Rob

    Thanks for a great article! I have only recently discovered your blogs and so far you hit the nail on the head every time. Keep’em coming please

    • Shahla Jalali

      Hi Rob! Thanks for the feedback, glad we can contribute to your real estate business. We’re always adding new ways to help agents, don’t forget to subscribe so you never miss it!

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