Purplebricks aren't offering proper agents: Hayden Groves

Purple Bricks and agency groups like them are not “proper agents” as their television ads claim, industry leader Hayden Groves has claimed. 

"They are not properly negotiating the sale on behalf of the seller, taking on the risks nor managing the sale through to settlement because there’s no incentive for them to do so," he blogged this week.

"They’re not using ACCC approved contract documents either and if you want to use your own settlement agent, you’re forced to pay extra.

"That’s just weird," the Freemantle-based agent suggested on a blog which appeared on the REIA-funded website, the Real Conversation.

It renewed the campaign by the Deputy President of the Real Estate Institute of Australia who had previously attacked “pseudo agent” models.

Groves pointed out that “proper agents” are incentivised through the payment of a commission at settlement which ensures they work for their client from beginning to end to procure the best result possible.

"That is our responsibility by law."

Appropriately, an agent that fails to complete their task doesn’t get paid, he said.

"Comparatively, Purple Bricks charge no commissions but incentivises their agents to list your property for about $5,000 (including advertising), then effectively you’re on your own unless you pay for “extras”. 

The REIWA governing council re-elected Hayden Groves as the Perth institute’s president last October.

Groves claims WA Purple Bricks agents are not employees of the parent company and therefore must hold their own agent license.

He suggested of the 90 registered Purple Bricks participants in WA, "only three hold a license (sic) that enables them to act on a behalf of a seller; with the remainder (if not employees) breaking State laws." 

He pointed out Purple Bricks has fallen fowl of the Office of Fair Trading (OFT) in Queensland for alleged breaches of the Australian Consumer Law and Property Occupations Act (Qld 2004). 

Queensland’s regulator claim consumers were misled by Purple Bricks about additional services offered by them, despite the agency advertising ‘low, fixed fees’ for their services when selling property.

"Purple Bricks also failed to fulfill some of it's regulatory obligations around properly accounting for funds held in trust and some other technicalities that “proper agents” need to comply with."