Why Purplebricks isn’t the best way to sell your house
It is fascinating to watch people make decisions that cause themselves harm whilst ignoring advice that could actually help them. A simple example is smoking; everybody knows the damage it causes to the body but some choose to ignore the advice from friends and family because they either don’t want to think about it due to the enjoyment it provides in the short term or because they are simply addicted. A less obvious example is where financial harm is caused by poor decisions.
On the minor end of the spectrum, many will change their spending habits to get shopping points and then drive out of their way to save 4 cents/litre. Or maybe shop only in the one store due the the points that seem to be of such benefit but that actually amount to a tiny amount when actually converted to dollars.
On the high value end, when selling a property, some will go to extreme lengths to save a few dollars. This might be by simply choosing the cheapest agent or maybe even selling it themselves. In between are companies like Purplebricks, the English discount fee company. The one thing in common with all three options is the focus on saving costs, rather than the more important objective of maximising the (net) return.
Having a skilled negotiator working on your behalf will likely be of far greater value than saving a percentage of the sale fee. Surveys have shown that sellers regularly lose tens of thousands of dollars by properties being undersold due to poor negotiation or flawed sale processes; significantly more than the entire selling fee let alone the amount the owner was able to save by hammering down the fee of the (poorly skilled) agent.
The following article, recently published in a well respected financial advice newsletter, provides a well reasoned argument for how such efforts at saving money are a true false economy. Whilst not agreeing with the rationale for providing accelerated incentives to agents, it is a reasonable argument if there is no established trust. Another discussion for another day…