Real estate trends from abroad have now reached the U.S., as flat-fee agency Purplebricks expands overseas following successes in the U.K. and Australia. A $177-million investment from Euro media giant Axel Springer, who is acquiring 11.5% of the company, made the expansion possible.
Accelerated Growth in the U.S. Anticipated
$71-million of the $177-million in funds has been allocated for accelerating the company’s expansion into target markets. This will help bolster Purplebricks’ company infrastructure, ensuring adequate recruitment and training to fill essential positions, and ensure managerial depth.
Funds will also be used to support technological advancements, boost advertising and marketing, and expand the company’s service offerings. The added funds from Axel Springer are twice the money it’s used to fund its U.S. operation to-date.
Where is Purplebricks Building Up Business?
Trends have drawn the company to the L.A. market, with later expansion to Fresno, Sacramento, and San Diego. It was plotting a move to the New York market for June 2018, but thanks to the funds from Axel Springer, Purplebricks has pushed up their move to April, setting up regional headquarters in Manhattan.
How are Customers Reacting?
Purplebricks’ flat-fee platform was well-received in all California markets. Homeowners pay a flat fee of $3,200 for listing, regardless of home value, agreeing to pay the buyer’s agent commission on closing. Included in the fee is a dedicated ‘buying expert,’ home photography and 3-D touring video tech, and the ability to make/review/negotiate offers online anytime with the click of a button.
According to the company, a New York homeowner listing a $560,000 home can save $13,600 compared to the standard brokerage commission model. Purplebricks’ partnership with Axel Springer is expected to fuel not just its geographical growth, but reap the benefits of the company’s digital and IT development expertise, sharing innovative new offerings with customers.
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