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.”

19 COMMENTS

  1. 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.

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

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

  3. 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.

  4. 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!

  5. 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

    • 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.

  6. 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 :)

  7. 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)

  8. 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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