By Mario Toneguzzi

Purplebricks, a real estate brokerage providing fixed-fee real estate services, is poised to expand its presence in the Canadian market despite some challenges it has faced with the concept in Australia and the United States.

Lukas Lhotsky, COO and general manager for Purplebricks Canada, says the company has a growing network of about 100 Realtors across Canada operating in Ontario, Manitoba and Alberta. There are plans to enter the market in British Columbia in the future.



Lukas Lhotsky
Lukas Lhotsky

Purplebricks officially launched its operations in Canada in January. The company acquired the DuProprio/ComFree Network from Yellow Pages Digital & Media Solutions Limited in June of last year.

“We’re pretty excited about what’s happening. I think that we’ve been growing very significantly since January,” says Lhotsky. “We moved into a much bigger new space (of about 10,000 square feet) in Hamilton, Ont. We’re growing in all of the markets we’re in. So, it’s exciting to see.

“We’re still a small part of what real estate represents. I think we’re modest enough to know we’re never going to be all of real estate. There’s always going to be room for a variety of different models but we think there’s a lot of opportunity to continue to grow and to continue to offer the service that a lot of Canadians are asking for in the markets where we operate. Our goal is just to continue to be more present, more signs on the ground.”

Lhotsky describes Purplebricks as a duly registered real estate brokerage that helps people buy and sell their home for a single fixed fee, offering the same expertise consumers would expect from traditional real estate.

The fixed fee varies a little bit by market but is generally about $799 – the cost of the core listing fee. If consumers want help with showings and negotiations, they can purchase those add-ons for a fixed fee as well.

The people who work with Purplebricks are licenced Realtors, who list the properties on the Purplebricks online network.

“They all work for us. They’re all Purplebricks Realtors,” says Lhotsky.

“We’ve had a lot of success so far and we think we can continue to make inroads. A lot of people – especially once they use the service – they say afterwards, ‘How come I didn’t always do this? It works’. That’s what gets us excited and where we think there’s more opportunity.”

Part of the company’s recent marketing effort has been a television advertising campaign to spread the word about what it does.

“It’s being seen in a lot of places. We’ve got a pretty significant media buy that covers sporting events. We were in some of the NHL playoffs. We were in a variety of other TV shows. We did a lot of buying of daytime television as well as some of the top shows in almost all markets,” says Lhotsky.

“The main message is incredibly simple. There are different ways that you can sell your home and you can sell your home for a fixed fee and save on commission. That’s the core message we’re trying to get across. You don’t have to compromise on getting access to real estate expertise and getting a very high level of service and you can still get that without necessarily paying the full commission that you might in a traditional brokerage context.”

Does the Purplebricks concept appeal more in a buyers’ or sellers’ market? Lhotsky says it’s an interesting question and he really doesn’t know. But he said the company has seen that it has been quite vibrant in both types of markets.

“Because we’ve got an offer and negotiation service, people feel really comfortable using us in very hot markets. They know we’ve got a very dedicated team that does nothing else but offers and negotiations. An individual on that team will literally do hundreds of those in a year,” he says.

“They literally do more in one year than most Realtors will do in a lifetime. So, in a hot market like Ottawa is right now, we’ve done very, very well. And in challenging markets… there are people that see the value because they are value conscious. There’s a lot of really smart people out there that are doing their homework and when they start to add it up they start to realize,  ‘Okay, what am I really compromising? I know the market’s difficult but I’m going to get the same visibility. I’m going to get access to the same Realtor’s level of service if not more. And I can use that money right now’.”

Purplebricks’ parent company is based in London, England. It first expanded to North America in September 2017, operating in Los Angeles.

Internationally, the company has faced some recent challenges. Its founder and chief executive Michael Bruce left the company. It also reported that it was pulling out of Australia and placing its U.S. business under review.

In early May, the company posted a report on its website that said this about the Canadian, Australian and American markets:

“The Group’s Canadian business continues to perform well and trading is in line with management’s expectations. The Board has a strong belief in the future opportunities in this market.

“During the two and a half years that Purplebricks has been operating in Australia, market conditions have become increasingly challenging. This, combined with some execution errors, has resulted in the business not delivering the progress the Board expected. The Board has therefore concluded that the prospective returns from Australia are not sufficient to justify continued investment. Accordingly, the Group has chosen to exit the Australian market and the business there has been put into an orderly run down with immediate effect, pending closure. The business remains committed to our current customers.

“Whilst good progress has been made in launching our brand across the U.S., the Board has materially cut investment in marketing and other overheads to reduce expenditure to sustainable levels and begun a strategic review. As part of this review, management proposes to examine the options for delivering the next phase of growth in a more effective and cost-efficient way including more closely considering the opportunities and risks associated with a materially scaled-back U.S. business. A further announcement on this strategic review will be made in due course.”

32 COMMENTS

  1. Historical data has been available for decades and decades. Second historical data sharing is the decision of a real estate association as to weather or not they would allow this information to be shared. Just because there is information on the internet does not mean a person knows what or how to do something. Do you drill and fill your own cavities?

  2. Could not agree less. Real estate is a service industry not an information industry. Just because someone can read something on line does not make them an expert. Look at what is going on in the world. I have heard this line more and more the past year or more. ” I am teched out” I see so many purple brick listings that do not sell and end up listed with realtors.

    • Unfortunately the CREA Code of Ethics prevents you from telling the public about this reality.

      CREA is an organization designed to protect the weak and failing and often unscrupulous brokerages from
      consumer awareness by preventing the strong, successful and highly ethical brokerages from saying “hey we are actually better here are our stats and theirs”.

  3. That goes hand in hand with the false testimonials they were posting on their site. I have no problem.with Purple Bricks. I do have an issue with false and misleading advertising and claims. And this includes realtors as well.

  4. There still are gas stations on every corner. And new ones being built. And yes quality is better then quantity. That is why the consumers use realtors . What kind of quality can Purple Bricks offer? You get what you pay for.

    • All I can say is that the people who manage Purplebricks’ FB are rather thin skinned. I asked a very simple question last week and they took minutes to remove it and block me from commenting.

    • Lets be honest….on the Listing side they offer more than the vast overwhelming majority of REALTORs in the country do.

      Lets be honest realtor.ca has pretty much wiped out the Listing Brokerage based model. The DDF not only speeded up the demise of the Listing Brokerage but as AI is applied to Listings through companies like Zillow, Compass or Redfin who now have access to coveted MLS historical data for pennies the pace will quicken further.

      • Nelson, perhaps in the future the listing companies of today will be replaced and then all Realtors will be buyer agents. Unfortunately it will not get rid of dual agency. Oh well! Now that will reduce the numbers in the business.

        • The Legacy Franchise, Brokerage and Co-Operative Listing Service model will experience unprecedented scrutiny as historical data is fed in AI models which will discredit that legacy.

  5. Organized real estate around the world is being attacked by alternative models. How many Realtors would buy an airline ticket or pay for a hotel room at full price if they can save money purchasing online? Do you get better service from the airline by paying a higher price for your ticket? Real estate consumers are no different. What consumer in their right mind would voluntarily pay $20,000 to $40,000 if there are alternative options for them to save thousands of tax free dollars. In the past 20 years how many travel agents have closed their offices because consumers were able to buy directly online from the airline? Remember when there was a gas station on every corner. Now consumers pump their own gas. The real estate business is in change, but has been much slower. How many agents does it really take to sell a house? The problem with the real estate industry comes from within. There are just too many Realtors. Today many brokers don’t make their money selling properties, but on the number of agents renting desks. Back in the 1970’s and 80’s a large real estate office had 40 -50 agents and we thought there were too many back then. Today there are some brokers with hundreds and even thousands of agents renting desk space. This is ridiculous and is not in the consumers best interests. So Realtors had better get used to the fact that their existing business model will continue to see the commissions decline. Quality is better than quantity! What is the best real estate model?

  6. Thought I would post this for REM regulars and for Jim to Ask Joe where are the charges.

    Nice to see Forbes doing work no Canadian Journalist is willing to do to protect consumers.

    https://www.forbes.com/sites/emanuelemidolo/2020/01/22/purplebricks-canada-offered-employees-days-off-for-made-up-5-star-reviews/#25c3f3eb7182

    It constantly amazes me that REALTORS who are willing to violate rules, regulations and laws are allowed to build businesses from doing so.

    • Nelson, the Purple ads are still running very often on American and Canadian tv channels amidst the news and other programming.

      Carolyne L ?

  7. I just re-read this article on Purple Bricks and the comments posted by realtors, and what I get from it is that Purple Bricks which is failing in other countries took over the failing company (comfree) and offering a cheaper package by appealing to those bargain hunters when at the end of the day most of the bargain hunters are out of pocket a fee with no sale? I am getting this right? It would be interesting if companies had to show their success ratio of listing taken and listing sold. I am against more regulations but I am also for an informed client. This is were our boards are failing, not informing the public of what to ask. We have silly adds with no education.

  8. Purple Bricks USA is closing down. This means Australia and USA market failure.

    Expect to ComFREE back on the market at a discounted price.

  9. People are gullible. I’ve often thought that I’d take $1000 or in this case $800 for nothing and hopefully get to charge the fee again when they realize they’ve overpriced their property too late. My broker told me 32 years ago that when sales are strong home builders don’t know you and when they’re weak they will kiss your feet. People don’t change, times do.

  10. If it’s a franchise like other most “no commissions “ companies and the owner has to meet a quota to keep the franchise then most won’t survive!

  11. What com free and purples brick don’t tell you is not on your local
    Realestate board and that the fact is the a very high %
    Of the sales are put together buy other realtors so the seller still has to pay a commission

    • Yes I don’t understand why RECO and CREA allow them to advertise no commission when most of their listings that are sold pay commission to the co op brokerage.

      • That’s another thing sellers are not really being told. And they are out of pocket even if they don’t sell

        • Sabine, but why doesn’t the public understand this (false advertising)? Back in the 80’s, colleagues years in the business might remember “Pear Tree” and others. It is quite sad that there is no rule saying these businesses must divulge (in writing) what the true costs to the consumer are, base line, showing the public their anticipated Net at time of sale, given all the various options at hand. Listing reps are meant to produce a guesstimate Net for their would-be sellers at time of listing. Addressing likely and possible varibles.

          As I noted on this thread previously, are foreign institutions not subject to the Canadian Competition Board being involved with such a foreign merger/acquistion/takeover (call it what you will) to vet the procedure. No one commented. Even within Canadian boundaries mergers and acquisitions are often challenged. But foreigners are not? If they were/are, we were not privy to hearing any of it within the walls of the actual industry? As Nelson commented, we had to find out the current situation reading “Forbes” (for those who read such) or in my readings where I follow the overseas newspapers’ headlined relative industry stories. Major Canadian franchises are opening all over the world. We don’t hear much about that topic, here in Canada, either.

          Someone here on REM forum mentioned that those types of MLS listings such as offered by PurpleBricks et al, are garnered expressly for the purpose of “collecting” buyers who will then buy other listings, such being used as a loss leader.

          Where double-ending is forbidden, in particular, isn’t the whole MLS system designed to be exactly that? I have penned several articles over the years, addressing this very topic. When Mr. John P. Public signs a listing (any MLS listing with any company) he must be told that the system is not in fact designed to have the listing corporation or specific listing sales rep (registrant in Ontario) agent actually bring a buyer to produce a sale. That in fact dual-agency is frowned up in many domiciles and forbidden in others. If a genuine survey were to be had, it would become clear that in fact, the public doesn’t know this, were not told this at time of listing, and that leads to unrealistic expectations by all concerned.

          Not meaning to sound negative, just stating the facts as I understood them for nearly four decades. In later years, I even added (another) liability disclosure, and had my would-be sellers sign confirming that they understood they should not expect that as their listing rep I would be under contract to “sell” their property, but rather to promote it to colleagues, business associates, relocation apparatus where applicable, and to the general population at hand who might most likely already have their own agent, with the hope that an offer would appear enabling “my” sold sign to appear on their lawn. Truly this came as a surprise to those with an intent to list, and I was often questioned as to why no other agent explained this, much less asked to have confirmation in writing that the topic was addressed and clearly understood. Some found it openly shocking. But at least they could not say they didn’t understand.

          Carolyne L

    • Exactly. People are told that they are on MLS. It’s just not mentioned that for most listings they are lot listed with the local boards. For those folks the exposure is minimal at best. I read a while ago that 87 % of those “private sales” are through buyer agents Not sure if that number is still valid.

  12. The discount brokerage model has been around since the beginning of my real estate career in the 80’s and has never seemed to take hold. In my opinion because we are not just sales or listing service. We are almost a paralegal service and held accountable and one can not sign their obligation away for a flat rate. While I agree some agents only put your property on MLS and wait, most do so much more. I have an entire marketing plan that I launch weeks and sometimes months in advance of posting a listing on MLS and it isn’t just a sign that says “coming soon”, which by the way, I believe I was the first agent to do “coming soon” signs in the 80’s. You can blame me for that one :)

  13. Purple Bricks is not new nor exciting. And it is my opinion that to advertise “No Commission” is misleading and unethical. Almost 100% of Purple Bricks listings in my market area offer a cooperating brokerage a commission. And they do not disclose fees a seller is responsible for. Which will add up to a seller. So the savings, if any , are negligible. Just like other similar models they are using a listing as a lost leader to attract other potential business such as attracting buyer’s the agents can sell other brokerage listings to. And to state that their realtors negotiate thousands of contracts must be a slight exaggeration as I only see a hand full of Purple Bricks listings in my market place. There is no way that can total anything short of a few sales. And I still notice most do not sell and end up listed with other Brokerages. It was much better as Comfree before they became a brokerage as Comfree was a great source of leads.

    • You nailed it David-misrepresentation in their marketing, leaving the impression that you can sell your home for free, their listings are mostly sold by full service companies and are paid a commission–this is more than misrepresentation–it’s semantics and word games that trick the consumer and as far as I’m aware those tactics are illegal. You want to offer a choice for the consumer–nothing wrong with that. But follow the rules like everyone else.Truth in advertising. Truth in your stats. I work for one of the top franchises and if we were to do this kind of stuff we would be in front of a RECO tribunal in 5 minutes.

      • Well said, David and Mauro. I’m a Real Estate Broker in Montreal, QC, and we’ve been seeing that on the 4%-6% market share by DuProprio (now owned by Purple Bricks), more than half end up listed by Real Estate Brokers because they don’t sell, or purchsed via Real Estate Brokers meaning that the Seller has agreed to pay a commission to the Buyer’s Broker on top of all the other up-front fees they must pay for zero guarantee of success. So “commission-free” is a huge exaggeration.

        Also, they represent themselves as a Real Estate company when they are anything but! They are a marketing company intent on making a profit. That’s it.

        -Mare Paule L, Montreal (QC)

  14. Imagine…..Yellow Pages which basically dominates the glossy print advertising business of the brokerage business luckily bails and gets ComFREE off its books to a Foreign new comer.

    Apparently no one educated Purple Bricks on the structure of organized real estate in Canada or the fact 1% listing commissions ( performance contingent ) are available in every market that matters today.

    This will not be the revolution that will mark the paradigm shift in the real estate brokerage industry. Just ComFREE in a purple suit.

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