This release is for information purposes only and does not itself, nor does its distribution in any jurisdiction in which it is received, constitute an offer or invitation to subscribe for or otherwise acquire or dispose of any securities in the Company and does not constitute investment advice.
- Purplebricks intends to launch in the United States in the second half of 2017
- Purplebricks has become the most recognised real estate agency brand in the United Kingdom (“UK”) in less than 3 years
- The hybrid real estate service, combining customer facing technology with Local Property Experts (licensed real estate agents), saves customers significant sums versus traditional agents
- Purplebricks has sold circa US$7.5 billion of property since its launch in the UK
- The Company launched its business into the Australian market in September 2016 and now services Queensland, Victoria and New South Wales. Purplebricks intends to launch in Adelaide and Perth soon
- Eric Eckardt has been appointed US CEO
Purplebricks, a UK listed company, which is changing the way people buy, sell and let property, is pleased to announce that it intends to launch its hybrid real estate agency services in the United States in the second half of 2017. The Directors consider expansion of the Company’s business and the Purplebricks brand into the US real estate market to be the next step in the Company’s rapid expansion. The United States is one of the world’s largest real estate markets with circa 5.5 million residential properties sold in 2016.
US market dynamics
The US real estate market, which Company management estimates generates some US$70 billion in annual real estate commission, remains highly fragmented. As an example the top five states by residential sales volume units (California, Texas, Florida, Illinois and Ohio) represent, on average, approximately 25 per cent of the total residential real estate transaction volume (5,450,000 in 2016 – over five times as many as in the UK). This fragmentation is demonstrated by the fact the market is comprised largely of individual agents – with the US Association of Real Estate License Law Officials recording more than 2 million licensed real estate agents.
Details of the Company’s proposed strategic expansion into the US
The Directors consider that there is now a significant opportunity to make a meaningful and lasting impact on the US real estate market, and the Company intends to launch in the second half of 2017. It is intended that, initially, Purplebricks will strategically roll out in a defined number of US states, before rolling out more widely across other states. The launch will be led by a US Chief Executive Officer, Eric Eckardt, supported by Founder and Group CEO Michael Bruce and his brother and co-founder Kenny Bruce. Eric has more than 20 years of experience in real estate, finance and technology.
Unlike traditional real estate agencies, the Company does not have a retail presence. Instead it offers a sophisticated online technology platform which, together with its Local Property Experts (LPEs), who are licensed real estate agents, is intended to provide US customers with a convenient and transparent means of engaging in the process of buying and selling real estate 24 hours a day, seven days a week, to suit them. Purplebricks provides a service that is accessible 24 hours a day, seven days a week with the click of a button. Buyers, sellers, LPEs and real estate agents will be able to safely and securely communicate with one another through the Purplebricks platform. The Purplebricks model is intended to make LPE’s, Listing Agents and Buying Agents more productive and for the customer’s journey to be more convenient, transparent and cost effective.
The Company is seeking to attract some of the most experienced real estate agents in the industry, who want the opportunity to run their own scalable, profitable business like many of Purplebricks’ existing LPEs do in the UK and Australia. LPEs will benefit from having their own dedicated regions, supported by Purplebricks’ technology and marketing infrastructure. Purplebricks expects LPEs to have strong local knowledge and a genuine desire to offer first class service to customers.
The Company intends to launch with an adapted business model to fit the US market, that meets the needs and requirements of customers and will address the buy and sell side commission system that operates there. In the UK, Purplebricks’ customers are offered a flat fee which is a percentage of the average fee charged by traditional real estate agents.
Background on Purplebricks
In less than three years, Purplebricks has become the most recognised brand in the UK real estate agency market having become known for being a fair, modern and transparent way to sell or buy a property. In support of the customer service ethos, Purplebricks is the most positively reviewed real estate agent – rated Excellent and scoring 9.4 out of 10 by over 12,400 reviews on independent review site Trustpilot.
To date, over US$7.5 billion1 in residential property has been sold via the Purplebricks model in the UK alone.
The Company launched its business into the Australian market in September 2016 and now services Queensland, Victoria and New South Wales. The Purplebricks real estate agency model is expected to be launched in Adelaide and Perth in March and April 2017 respectively. Growth in the Company’s Australian operations has occurred faster than in any of Purplebricks’ UK regional launches.
The Company has over 400 LPEs.
Michael Bruce, Founder and Group CEO of Purplebricks, commented:
“We are proud to announce our plans to launch Purplebricks in the US, a market that we estimate to be worth some US$70 billion in annual real estate agent commission. Our customer proposition of high quality service and value, delivered through the combination of technology and people, is driving irreversible change in the UK and Australian markets. We are confident that with our understanding of the US market and our experience from having already launched in two markets Purplebricks can build a significant business in what is one of the most fascinating and rewarding real estate markets in the world.”
For the real estate agents we recruit Purplebricks presents an exciting new platform to build scaleable, profitable businesses in their own dedicated regions, supported by our strong technology infrastructure and marketing reach. For US customers we are seeking to offer a better deal in selling and buying their homes, with a more convenient, transparent and cost effective service.”
1 At current exchange rates