With the Virtual Demise of Purplebricks, Is DIY Estate Agency Completely Dead?

By Trevor Abrahmsohn, Glentree International

Well, well, well, the founding shareholders of Purplebricks have had a rude awakening, and what a tumultuous journey they’ve been on.

For a company floated on AIM in 2016, at 100p, which rose stratospherically at one point in 2018 to over 500p, after goodness knows how many rescue cash calls, is now languishing at under10p, and it is probably only worth the good will of the name.

‘run naked through the village high street’

Many moons ago, I predicted that the great British residential property owning public, would rather ‘run naked through the village high street’ than make a feeble attempt to sell their own property.

Flawed Model

This flawed and doomed model, effectively put inexperienced ‘lay people’ in charge of selling their single, most important, tax free, asset, which is the equivalent of a surgeon sending you in the post a scalpel, some bandages, a YouTube video and wishes of good luck for the DIY operation that you much needed.

There has been a love-hate relationship between the consumer and estate agents since time immemorial and it is only recently that politicians and bankers have reached a lower echelon of disrespect in the hierarchy of the most ‘deplorable’. Nevertheless, estate agents are, after all, a ‘necessary evil’ since they provide the marketing, administration, spin doctoring and nurse-maiding service that effectively constitutes the business.

Lambs to Slaughter

Some of the naïve DIY estate agency victims have been ‘lambs to slaughter’ and some have been vulnerable to the avaricious appetite from hungry bargain hunters, who prey on these unsuspecting victims by trying to steal the family jewels at a bargain price. Dad’s Army versus the SAS if you like!

The much-used adage of ‘cheap is dear!’ springs to mind. Here consumers are lured in by thinking that a fixed rate, relatively modest fee would be a great benefit to the property owner. But ignorance and naivety blur their vision, such that they can inadvertently give away tens of thousands of pounds by underselling, which is a cruel outcome for these innocent souls.

I have always believed that the fees estate agents charge of 1.5/2% are worth their weight in gold (I would say this wouldn’t I?) particularly in difficult markets, where homes do not ‘fly off’ the shelves and need an insatiable amount of nurturing.

A ‘fly on the wall’ documentary of the intricate, painstaking, work that estate agents do to sell some properties, which can consume many months and often years, (and sometimes never) where the skill set required is not just property knowledge but also an object lesson in psychology, empathy and valuable human skills which are so lacking in the DIY model.

I appreciate there are rogues in the business but the far-reaching draconian laws which now police the business today, have weeded out most of the serial offenders.

Cradle to Grave

We have to hold the hand of our sellers from ‘cradle to grave’ and guide them through the labyrinthine maze and invariably, we become firm friends by the end of the process.

Lest we should forget, you only pay these ‘contingency fees’ when the seller gets their bounty, which is invariably bloated by inflation across the years.

Although Purple Bricks did give it a ‘good go’, it was a flawed model and I am not sure that the British public will ever be ready for this passive, DIY service, which may be better suited to our American counterparts.

Endearing Reserve

There is an endearing, quintessential reserve, and self-deprecation, which makes the British such a lovable nation. By way of illustration, motorists in this country hardly ever use their car horn, yet on the continent of Europe, the Middle East, the USA, India etc., it is the most over used amenity that is effectively a means of gratuitous communication, as long as you don’t have to suffer the cacophonic sound.

As Brits we are happy to queue without a complaint and a perfect example was the orderly, five-mile-long line to pay respect to the late Queen Elizabeth’s coffin. This was British reverence at its best, without a whinge or a gripe.

President ‘Micron’ of France swanning about in a ‘deux chevaux’

The Presidents and Prime Ministers of every country in the world usually reside in a palace and drive the most prestigious limousine they can muster. On the other hand, our Prime Minister lives in a modest flat in a terraced house IN 10 Downing Street and is driven in an ordinary Jaguar saloon, once owned by Ford, and wouldn’t dream of being chauffeured in a Bentley or Rolls Royce. You can just see President ‘Micron’ of France swanning about in a ‘deux chevaux’.

As if we need another example, a professional medical, man who studies for eighteen years as a surgeon would be upset if he were referred to as ‘doctor’ instead of ‘Mr.’. The latter title, which in any other place in the world, would be deemed prestigious and respectful.

This British understatedness is endemic in the culture and a further reason why a DIY self sell residential property service will never succeed in this country. A good try though!