UK brokerage Purplebricks on the hot seat for home-sale claims

Jefferies analyst says company’s figures could not be duplicated

TRD LOS ANGELES /
Feb.February 05, 2018 09:37 AM
(Credit: Pexels, Pixabay)

Purplebricks, a London-based discount brokerage that has quickly expanded into Southern California, is now fighting claims it sells far fewer homes than advertised.

The three-year-old company, which opened a Los Angeles office in the fall after raising $60 million from investors, offers a low flat fee to clients, and claims it has sold more than three-quarters of homes listed.

But a Jefferies analyst, in a recent research report, put that figure at closer to 50 percent, “near the middle of the pack of its study of 7,000 agents,” according to a BBC report, quoting his research.

The flat fee that Purplebricks charges can save home sellers thousands of dollars, the company said, compared to other brokerages that charge a portion of the home’s sale price. It uses a combination of online and local agents.

But the company, which as of December had a market cap of $1.32 billion, doesn’t disclose its data on home sales. The Jefferies report cautioned investors that the rapidly expanding brokerage did not have a proven business model, and its home-sale success could not be proven, according to BBC.

The company responded in a statement to the news outlet, saying it “firmly refutes the criticism in the research note of its revenue recognition policy” and stands behind its audited results.

A Purplebricks representative did not immediately respond to The Real Deal for comment. [BBC] — Alexi Friedman


Related Articles

arrow_forward_ios
(Credit: iStock)

“I like being a free agent”: In the gig economy, LA brokers say contractor status works

Malibu Real Estate Investments principals Bedros Oruncakiel and Kirkor Suri

Malibu spec mansion lists amid softening luxury market

Chandler Parsons and his property on Stone Canyon Road (Credit: Getty Images)

Durant wants out of Malibu, and now Chandler Parsons is listing his Bel Air mansion

CoreLogic's Andrew LePage and Orange County (Credit: Wikipedia)

SoCal housing market shows signs of life, with a caveat: report

Bridge Housing CEO Cynthia Parker and a rendering of the view from Walnut and Anaheim (Credit: SVA Architects)

Fully affordable complex set to rise in vacant Long Beach lot

Tracy Tutor and her Brentwood home

Tracy Tutor of “Million Dollar Listing ” asking a lot more for Brentwood home

Anton Lessine and 321 South Bristol Avenue, and Behati Prinsloo and Adam Levine with their home (Credit: Getty Images and Zillow)

This week in celeb real estate: Adam Levine unloads $45M home, a Hollywood film producer sells in Brentwood…and more

Anton Lessine and 321 South Bristol Avenue (Credit: Getty Images)

Hollywood producer Anton Lessine sells Brentwood Park mansion for $17M

arrow_forward_ios