The Truth About Purple Bricks

What does $2.7 million marketing budget buy you in half a year? It buys you a ‘dent,’ I suppose.

That’s what Purple Bricks spent during their first 7 months in the US and a lot of people – ok: most of them were Realtors – took note.

At Help-U-Sell we are (as always) a little flattered that a ‘new’ competitor tries to mimic something we’ve been doing for more than 40 years: Set Fee Pricing.  At the same time we chuckle when it becomes clear that the marketable part of the Set Fee is all that was copied.  The spirit behind the fee – the passion for saving consumers tons of money while delivering exceptional service -always seems to be left behind.

Set Fee pricing – where everybody in a local market pretty much pays the same thing to sell their houses – makes perfect sense.  It is logical; which means that the % nonsense the other guys are doing, whether 6% or 5% or even 1%, makes no sense at all! So, good for Purple Bricks for (kinda) adopting that pricing structure.  A little digging on the company website reveals that their Set Fee is mostly smoke and marketing mirrors.

Here is one of my favorite passages on purplebricks.com (it is on their FAQ page, in answer to the question, ‘When do I pay my fees and how do I make payment? ‘):

You can either pay the Sell Side fee on the sale of your home, after 6 months from appointing us as your Broker or when you withdraw the Property from the market, whichever happens sooner – so you can ‘pay later’ or you can just pay on appointment ‘pay now’. The choice is yours. . .

Did you catch that?  The fee is due and payable at one of 3 junctures:

  • At closing
  • Or at the six-month anniversary of your listing date
  • Or when you withdraw the listing or it expires

Whichever comes first.  In other words, you pay the $3,600 fee* no matter what.  Even if your Purple Bricks home selling project sinks like the Titanic, you’re going to pay the fee.  The Help-U-Sell Set Fee is payable only at closing.

The part that is not so obvious is that buy-side fees are always paid in Purple Bricks transactions. You don’t have the option to find your own buyer and then pay less. It’s not in the verbiage because that’s pretty standard in the industry.  To my knowledge, Help-U-Sell Real Estate is the only brand that makes this feature part of our offering.  We unbundle commissions so that your Listing Fee (the Set Fee) is paid at closing and if you find your own buyer, say through your network of friends or by holding an open house, that’s all you pay.  Buy side fees are only paid when an agent – ours or somebody else’s – brings the buyer. Like I said, it’s logical.

Another gem hidden in the fine print of the Purple Bricks website is their complaint procedure. I can’t copy/paste it here because it’s sooo long! Eleven points in all!  But you can read it here.  I don’t know how many complaints they get, but you have to wonder why a real estate company would publish an elaborate procedure like this on their website.  I don’t find a similar page on any other real estate website – so this must be one of Purple Bricks’ unique features!

Purple Bricks, like most of the new real estate companies emerging today, is a corporate entity. The people you work with are often employees, empowered to do very specific tasks, usually for very specific fees.  Any higher level arrangements or negotiations are handled by someone else, usually faceless and located miles away.  At Purple Bricks, an agent comes to your house and takes your listing (it is rumored that they get paid about $800 for doing that), and then turns you over to their corporate office in New York or Southern California. From that point on, your home selling project is managed by phone and internet.

At Help-U-Sell Real Estate, we see things differently. We believe that a transaction involving the biggst financial asset most of us have (our homes), deserves the knowledgable assistance of a trusted advisor: a Help-U-Sell Broker or Agent. Sure, we market the heck out of our listings, online and everywhere else; but we also stay with you every step of the way, answering your questions, advising, negotiating when an offer appears, and managing the transaction from beginning to end.  We are not a machine, not some nebulous, faceless entity in the cloud. We are real people who care very much for our business and our customers. We are local and our success depends on how well we take care of our local buyers and sellers.

We have a Tag Line at Help-U-Sell:  Sell Fast – Save Thousands.  I think we should add another imperative to that:  Be Delighted. Because, that’s what our home sellers and buyers generally are at closing: Delighted.

*Changes seem to be coming fast and swift at Purple Bricks! When they arrived in the US, their listing fee, proudly proclaimed at the top of their website home page, was $3,200.  A few months later, it was $3,600.  Today, the word ‘From’ has been instered before the fee:  ‘From $3,600.’ To determine your fee, you first have to input your Zip Code – so the fee varies by marketplace. In 10001, New York City, for example, it’s $5,900.

Price vs. Value

You are not the lowest price in the market! Nor should you be!

Your Low Set Fee consumer offer is designed to create a ‘tell-me-more’ inquiry only.  It is not what will cause sellers to list with you. That takes something more substantial.

People contact you because they think you might be able to save them some money.  They list with you because they perceive you are the best Value.

Value is the place where price and service intersect. A low price coupled with slashed service, i.e. Purple Bricks, is not a good Value. Great Service at a big price, i.e. many ordinary Realtors, is not a good Value. Great Service at a really good price, i.e. Help-U-Sell,  is a good Value. All of which leads us to this:

What is the Value you bring to a home seller? What do you have – beyond your Low Set Fee and savings – that will cause a seller to say, ‘Yes!’

Right now your biggest competitors are in two basic camps.  There are the new entries – Purple Bricks, Redfin and the like. And there are the old establishment – the ordinary Realtors.

They old guys have a business model that runs on high fees and big splits to agents.  But current realities dictate that they cut commissions to be competitive.  So when they cut commissions they are cutting the fuel it takes to run the business model. Their cut really is a CUT. The commissions are lower, yes; but what had to be cut on the service side to accomplish that?  Less marketing?  Less competent agents?

The new entries have a sleek model that emphasizes technology and minimizes the importance of agents.  They take the listing, plug it into the technology and wait for something to happen.  The agents are paid less and are really just clerking the listings leads created by the corporate marketing machine.  Yes, they charge less. But the service they offer is also reduced.  It is the service of a clerk and a computer, hardly a good Value.

Your Value is so much more than either of these!  When a seller deals with you, they’re dealing with the owner of the company.  You have years, even decades of experience.  You have a track record and can document your success. You have systems that enable continuing contact during the listing period and beyond.  You are their skilled consultant, guiding them through the largest financial transaction they will ever have.  Yes, you charge less; because your business model is designed to run more efficiently (you are not dependent on high-split agents to grow your business). But the service you provide is the best available today.  That’s the very definition of Value.

So, market your Low Set Fee and the savings it produces.  That creates inquiries.  But, once you have the inquiry, sell your level of service and the Value you bring to the transaction.  That’s what creates signed listing agreements.

The 10 Most Important Things I Know About Running A Successful Real Estate Company

I’ve been doing this for 34 years: helping real estate brokers be more successful. I’ve worked with ordinary brokers whose lives revolved around recruiting and I’ve worked with extraordinary brokers who put the consumer first and built real businesses.  Over time, I’ve learned a few things that are powerful and true for any real estate company.  Here are my top 10:

No leads means No listings.  Really, I can’t tell you how many times I’ve had a real estate broker kavetch that s/he is not getting any leads.  In time I discovered that there was a direct correlation between lead production and listing activity.  Think about it:  why would you have leads if you have nothing to sell?  So, got no leads?  Go get a listing.

The inquiry is where the rubber meets the road.  Dramatic improvement in the bottom line is possible if you focus on the intake process.  A 3% to 10% increase can usually be achieved in a matter of weeks if you just tighten up how you respond to inquiries, how effectively you procure contact information and permission (real or implied) to continue the conversation.

Incubation is essential.  Going hand-in-glove with the previous point, you must have a way to maintain, track and interact with your leads going forward.  Our business is very different from what it was ten years ago.  Rarely does anyone contact you, needing to get their home on the market by the weekend.  Now, most leads take 3 – 12 weeks to mature, sometimes more.  Without a lead database that you massage regularly, you will not be competitive. It’s critical.

Face-to-Face always wins. We may have leapt into the digital information age, may have transitioned to online and less personal marketing, but this has only made face-to-face contact more powerful.  Never email or text when you can call or see the prospect in-person . . . and in-person is probably 40% more effective than calling. This is most important when working around one of your listings.  A mailed Just Listed or Just Sold card is not nearly as effective as one that is hand delivered with an attempt at a brief conversation.

Key Performance Indicators (KPI) are . . . KEY.  In our business, the most important KPI are: Days on Market, Sale Price as a Percent of List Price, % in-house sales, and Seller Savings.  If you will gather this data on your company and then gather the same data on your MLS – you will always come out way ahead! If you don’t, there’s a problem and we ought to talk about it! Using this kind of information in listing consultations and marketing can make the difference between getting the listing and not.

The most important thing you can do with online marketing is to become findable.  That means:  Claiming your business on Google and Yelp, building out your listing with photos and information and getting some five-star reviews on each site.  It means creating a Facebook Business page, posting relevant and important information and occasionally boosting your posts to expand your reach. It means updating your Zillow and Realtor.com profiles and building out your ‘Meet the Team’ page on your Help-U-Sell website with photos and bios on all staff.  And, a little icing on the cake:  it means dropping a few bucks each month into Google AdWords.

Differentiation is essential.  It’s why you became a Help-U-Sell broker. And differentiation doesn’t end with low set fee pricing; it should radiate into all areas of your consumer offering.  People contact you because they think you might save them some money; but they will do business with you because you have a better marketing plan, a more savvy approach to the business, and the skill and experience to get them to and through closing.  Build your difference in all areas, and then brag about it!

The function of a listing is to create another and another.  Yes, we market to get listings.  But when we get one, that’s when we pull out all the stops.  If you plan your outreach in the neighborhood to go into high gear the moment a sign goes in a yard, you will often find another listing or two.  Marketing around a competitor’s listing is also powerful (Arounds), but nothing works better than marketing hard around your own.

Every Help-U-Sell Marketing Plan should include:  FSBOs, Expireds, Arounds, Just Listed and Sold, and Cis.  There is no flexibility here.  This is essential.  Beyond this you can pick and choose from things like EDDMs, newspaper ads, radio, online campaigns and fake tatoo logos.

There is a direct relationship between your marketing budget and your revenue.  In other words:  you have to spend money to make money.  If your marketing plan is designed correctly and faithfully executed, you should generate about $10 of revenue for each dollar you spend.  So if your revenue goal for the year is $250,000, you probably need to be spending $25,000 a year on marketing:  about $2,000 a month.

Video You Should Be Doing

There’s no denying it:  Video Works!  Use of video in email will more than double your click-thru rate.  Webpages with video have a much better retention rate than those with just text and graphics. It’s clear we have become a video dependent culture.

So why arent you using video in your business? Let me count the reasons:

  • I don’t have the equipment (yes, you do)
  • I don’t know what to say (yes, you do)
  • I don’t know how to set it up (it’s easy)
  • I’m not a tekkie – I don’t know how to edit a video (it’s easier than you think)

Truth is, the kind of video that will help you build trust and confidence in your local market IS EASY TO DO.  Here – let’s take a look at an example:

Yep, that’s  Help-U-Sell Greensboro’s Jack Bailey doing a great job.  And notice:

  • He’s got a great homemade logo and title for his video series:  <2 with Jack Bailey.  That’s less-than-2 minutes – the length of each video.
  • He’s using a simple office background.  It’s uncluttered, and does not distract.
  • He’s using natural lighting.  In other words – not using special lighting.
  • He’s not using a microphone.  Although the sound would be cleaner if he was using an exernal mic, he certainly can be heard and understood without.
  • I know you can’t see it, but Jack is using a Cannon digital SLR camera on a tripod to record. Almost any digital camera you buy today will have video capability.
  • Probably most important: he’s not reading a script. He’s simply presenting something he knows very well.

You absolutely CAN do this.  Some pointers:

  • Keep it short!  Two minutes or less ensures that most people will stick with it to the end.  Exceeding three minutes will greatly decrease the number.
  • Be educational. Yes, there are times when you probably should tell your story, sell your system.  But information (without obligation) is an item of value.  The educational approach will build credibilty and recognition for you and your company.
  • Plan what you are going to say, but don’t script it.  Trust yourself!  You talk about this stuff every day – you know it backwards and forwards.  If you are going to get into something detailed, write it on a piece of paper taped to the tripod.
  • Forget being slick and polished.  That will actually work against you! Be natural. Be less than perfect. You’ll be communicating a genuine sincerity that will pay off big time.
  • Don’t buy a lot of equipment.  Stage your videos near a window so you can take advantage of natural light.  Get a tripod.  A whiteboard is great if you are going to use it. Any digital camera will do – even a good smartphone can be used to record.  If you want to splurge somewhere, find an inexpensive lavalier microphone with enough cord to plug into your camera or phone.
  • Do a little light editing.  You will probably want to trim off the dead space at the beginning and end of the video.  Adding a title on the front and contact information (and a logo) at the end is essential.  Once you’ve worked with editing software a bit, you might want to put some words or numbers on the screen to emphasize what you’re saying.
  • A good basic editor is Microsoft Movie Maker.  It’s free and can be gotten here.  There are lots of more sophisticated – and more expensive – programs available but Movie Maker will serve your needs for awhile.  If you are an Apple person, IMovie works well.

Jack tells me he spends about 15 minutes setting up and recording his videos.  His assistant, Kay, will spend about twice that editing.  Once the video is done, she uploads to Jack’s YouTube Channel (It’s a free and easy thing to set up) and then Boosts them on his Help-U-Sell Greensboro Facebook Business Page.  $20 – $30 in boosting to a well defined target will produce thousands of impressions and hundreds of views.

So, quit telling yourself you can’t do this!  It’s not difficult.  And it can make a big difference in our business!

By the way, you can study Jack’s approach on his YouTube Channel.

The Worst (and Best) Open House

I’m an Open House freak in my Las Vegas neighborhood. Every time I see a directional, I make the turn and go see the house. Of course I’m curious about the house – the floorplan, the decorating, the upgrade ideas. And I’m always checking the value compared to my own home (and thank goodness values have been skyrocketing in Vegas).

But mostly, I’m checking out the agent.  I want to see if they are skilled at getting my name and contact information, at qualifying me as a potential buyer or seller, at building the kind of rapport that leads to a working relationship.

With one very notable exception, were I the Broker, I would have fired all 20 agents I’ve met this year at open houses.  The infractions?  Let me list them:

Poor signage.  Three directionals do not a successful Open House make!  Let’s talk 10 or better!  Your traffic will improve and you will make a powerful impression on the neighborhood, one that may lead to another listing and another.

Poor preparation.  Usually it seems the agent just rushed in and didn’t have time to straighten up, freshen the air, put the dog out, empty the litter box and so on.

Poor greeting at the door.  That means a warm smile, a business card and, most important, the request for the visitor to sign in.

No attempt to qualify the visitor as a buyer, seller, or a curious neighbor.  The agents don’t seem to understand that they are there to make connections, build their database of potential sellers and buyers.

No credible and valuable information about the area, the house, similar properties and so on.

I probably could go on, but let me just give an example:

This weekend, I went to an Open House a block away from my home.  Of course there were just 3 signs (and one of them had blown down).  I got to the front door which was closed.  I rang the bell and opened the door.  Here came the agent, just off her chair in the back, wearing ripped jeans, and no shoes.  Her toes were nicely painted, however. She introduced herself but offered no card (I couldn’t tell you her name or company if my life depended on it).  And, she never asked who I was!  Much less how to reach me via phone or email!  She assumed I was a potential buyer (I think) but made no attempt to  verify this by asking.  When I got to the living room, here were the sellers, sprawled out on the sofa, looking bored, tired and not at all glad to see me.  Are you getting the picture?

Listen:  here’s how you hold a great open house.

You plan a week ahead of the event

Within 36 hours of the open house (that means a day before or an hour before), you go door to door around it, with flyers, inviting the neighbors (and probably picking up a listing lead or two).

You prepare the sellers to have the place in top shape and to be GONE – unless they are holding the Open House themselves or assisting you.

You arrive early and put out no fewer than 10 open house directional signs  (David Bartels tells me this is the most important thing; so important that he pays someone $50 per open house to do it for him – and he puts out 15 signs).  Yes, this will boost traffic, but the main reason you do it is to overwhelm the neighborhood.  You’ve already gone door-to-door, probably sent out Just Listed cards, and now have your signs all over the place; you will have made a powerful impression.

You greet people at the door with a warm smile, a business card and a clipboard.  You ask them to please sign in before you step aside to allow them entry.  Gene Manners is the absolute master at this. He gets contact information on pretty much everybody who shows up. His method?  Present it like a normal business practice – it’s just the way we do it; be warm, friendly and confident.

You ask: ‘what brings you in today?’ The answer will usually tell you if they are a potential buyer, seller, or just some dude like me who goes to open houses to evaluate agents.  By the way, if I am asked – which I never am – I’d certainly describe myself that way. And I’d take the opportunity to talk about Help-U-Sell, too.

You lead the tour and when they return to the front door you ask a qualifying or closing question:  ‘So what do you think?  Is this something you’d consider?’  No matter what they answer, you have the basis for a conversation here and an opportunity to either present other homes or close to write an offer.

If it’s a neighbor or a potential seller, talk about their home value and close to do a Market Analysis.

In short:  don’t be a schlub! Take control and interact with people. Adopt the kind of playful attitude you might take at a Singles Bar:  see how many names and numbers you can come away with!  And then WORK them.

I mentioned the one notable exception.  I went to an Open House in a nearby neighborhood.  The agent did everything right . . . ok, maybe she was a little skimpy with the signs, but other than that, she hit all of the high points I mentioned above.

She met me with a smile and a card and asked me to sign in; then she asked why I was there.  When I told her I was a nosey neighbor, you could almost see the gears shift.  She asked about my house, it’s location, size, upgrades.  She knew the neighborhood and the floorplan.  She asked if I had some of the options that came with that model. Then she congratulated me for choosing a gated community.

‘In this part of town, that gate adds about $25,000 to your value,’ she said.

‘Really?’ I replied, ‘I had no idea!’

‘It’s true,’ she said, ‘I’ve tracked the values and can document it.  And, if you were gated and guarded it would probably be more like $50,000.’

Needless to say, I was impressed.  And though that was last year, I still have her card.