Purplebricks did vendors a favour encouraging sales

Advertisement

The AFR is in meltdown defending its real estate buddies today (Domain being in business with them and all):

Real Estate Institute of NSW president Leanne Pilkington said she was left “horrified and speechless” over an “outrageous” competition run in NSW by fixed-fee agents Purplebricks to pressure vendors to lower their asking prices.

As revealed by The Australian Financial Review, Purplebricks offered $5000 cash prizes to agents who secured the most 5 per cent or more price reductions from their clients as the company tried to clear a growing list of unsold homes amid the slowing housing market.

In some instances agents of Purplebricks, which is not a member of the REINSW, pressured vendors into reducing asking prices by as much as 20 per cent in the space of a week as they competed for the $5000 prize “generously supported” by co-founder Kenny Bruce. In total more than 100 price reductions were secured as part of the “NSW Raffle”.

Earth to Ms Pilkington, prices are falling ever faster:

The sooner you sell the less profits or capital you will lose.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.