Home Selling Is Purplebricks About To Offer Refunds To Dissatisfied Customers?

Is Purplebricks About To Offer Refunds To Dissatisfied Customers?


There is a rumour on the grapevine that Purplebricks is about to start offering refunds to customers if the agency fails to sell their home. 

Purplebricks entered the UK housing market with a unique customer proposition. Instead of using a commission-based pricing model in which agents are paid a percentage of the sale price, Purplebricks uses a fixed up-front fee model

This means people who want to sell their home pay Purplebricks around £1,000 up-front and then not a penny more. On paper, this seems like an extraordinary offer, potentially saving thousands, if not tens-of-thousands, of pounds.

However, it’s not that simple. With the traditional commission pricing model, agents are incentivised to work hard to sell your home quickly and ensure it sells for a good price. And if it doesn’t sell, they don’t get paid. 

With the Purplebricks model, you may only pay £1,000 but, once the agent has received this, they have no reason to work hard on your behalf. This is because they get the £1,000 regardless of whether or not your home actually sells. Furthermore, regardless of how much your home sells for, the agent isn’t getting another penny. 

Because of this, Purplebricks is often accused of caring more about winning listings than selling homes, and of giving their agents no good reason to provide an above-and-beyond service. 

As a result, many Purplebricks customers never sell their homes through the agent. Either they give up and work with a high street agent instead, or their home sits on the market for months, and then years. The up-front fee they paid is money down the drain. 

Fixing a hole

There are now whispers within the property industry that Purplebricks is going to try and address this issue, if only to mitigate some of the bad press they’re getting as a result of it. 

This is according to our in-house property expert, Russell Quirk, who has written an industry-facing article about Purplebricks’ impending offer of ‘a reimbursement of the up-front fee if the home is not sold’.

However, as Russell goes on to explain, the small print makes the situation much more complicated. 

“To qualify”, Quirk says, “the seller must first wait for 10 months and the property must be marketed continuously – no breaks. A request for a refund can only be made in a 28 day window from the expiry of the initial 10 months’ marketing. You’ll also have to have sought a valuation from a separate ‘local property company’ before instructing Purplebricks in the first instance – your initial asking price must be at or below that figure. And if you refuse any viewers in that ten-month period and for any reason, the money-back guarantee is void. If a buyer is introduced that then withdraws, the MBG is also invalid.

“In other words, PurpleBricks have made the qualifying criteria about as difficult to achieve as me out-pomelling Max Whitlock. Why? In order to significantly mitigate the number of refunds that they will have to make – to lessen the likelihood of the money-back guarantee costing more than the revenue increase that it may bring.”

So, while Purplebricks does seem to be making a move to solve what has become their biggest customer relations crisis, they’re hardly putting themselves out there. They’re placed numerous significant obstacles in the way, myriad ways in which you, the customer, can fall foul of the rules and thus void any rights to a refund. 

While Purplebricks might seem like an attractive, cost-saving option, we strongly recommend listing your house with a local, trusted agent. If possible, make it an agent who is recommended to you by a trusted friend. Don’t try and save a quick buck because there’s a good chance you’ll be left stranded, money down the drain.

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