I started writing this blog post about six months ago, and then put it into my draft folder as after I finished proof reading it, it sounded more like a rant against the company rather than my intended post, which is to educate and inform. I’ve deleted the original draft, and will start fresh

Before we dive in, let’s get my full disclosure out of the way. I am a full time licensed Realtor in Ontario, and like the vast majority of Realtors, am paid 100% via commission on the successful sale or purchase of a property.

Yes, this is in contrast to Purplebricks’ model, which charges an upfront flat fee, regardless of a sale or not. The only similarity I can see between myself and PB’s, is we both have a focus on saving consumers (in their case) and clients (in mine) money. For over twenty years I have been operating this way, providing a high value consultant approach, versus the traditional way real estate is transacted.

So why am I talking about a company that has very little market share, and in a highly probable way, does not intersect with my targeted clientele?

Mainly because there is a lot of misinformation surrounding how PB’s operates, as well as the misleading (and potentially unethical) practices they are operating under.

Many might not know this, but recently an article on Forbes.comsaid Purplebricks Canada offered employees paid days off in exchange for made-up positive reviews on Facebook and Google. Holy shit!

This got the attention of many Toronto based Realtors, and then eventually caught the eye of the Real Estate Council of Ontario. Joseph Richer, RECO’s registrar, says: “We are aware of the allegations regarding the soliciting of online reviews at Purplebricks, and we have received numerous inquiries about it as well. We are currently looking into the matter to gather more information, in order to determine whether this would constitute a violation of the legislation.” (taken from REM online)

I’ll be the first to say, that I’m certain some individual Realtors have made up false reviews to puff up their online presence, which in part is what I believe PB’s excuse was. But for a national company to do so sends a dangerous message to the public. And I would be the first to say, if I heard that the company I worked at did the same, I would leave it immediately. 

Note: for those who think the above is overly dramatic, Realtors for the most part operate as Independent Contractors, they only hang their licence at the Brokerage they work at. We are not employees, so moving from one Brokerage to another is quite common.

A second area I take offence with is right smack dab on the first page of their website, they mislead by stating how much money a consumer would save by using their service over someone paying a 5% commission (which is actually negotiable within the industry). In small print below they reference: “Buyer agent commission not included, if any”.

For those outside the real estate industry, this might not seem like a big deal, which in part, is the deceptive nature of their marketing (basing their savings against a 5% fee, then not mentioning that 2.5% of the fee a PB consumer would still be required to pay, if you are comparing apples to apples).

Mentioning anything resembling a standard fee for the sale of a property is a forbidden and tricky mind field to navigate at best, even for those of us who abide by the rules and regulations under RECO.

Purplebricks was founded in the U.K. and still operates there, although what many aren’t aware, is that their agency laws are different than ours. They don’t have the typical two-agent setup, that we see throughout most of North America. So the gap between going it alone isn’t as high. But when PB’s tried to bring their model to both Australia and the United States, they failed, and in the process racked up massive losses.

In Canada, they opted for a different route, and bought the failing company Comfree, which had most of its market share in Quebec. I actually think this was a good move for a successful chance to last in Canada when many discount or sell-it-yourself models have failed or not taken hold. If they did that in the U.S. might they still be around today?

The beauty of the entrepreneurial real estate brokerage (and agent) marketplace, is that it allows a wide range of options from which consumers can choose which services, and at what fee, is best for them.

Do your homework and seek out which is the best option for you and in your neighbourhood market. Not all Realtors are alike. Even the ones whom operate under the same brokerage banner vary. Get into dialogue and invest time in seeking out your options. I for one, am always looking at ways to provide my services to my select group of clients in a cost efficient manner.

Deceptive marketing practices are not the way to go, and it makes me think after failing in both the United States and Australia, is the writing on the wall for PB’s in Canada as well, and the risk of skirting the rules a stab at survival? They weren’t the first and they won’t be the last of their kind. But if they do vanish, I for one, will miss their funny commercials.