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Is Brokerage Moving to a Flat Fee?

UK's Purplebricks is bringing its flat-rate brokerage concept to Los Angeles, and while the company is currently focused on residential, it believes flat fees are the future of brokerage.

By Kelsi Maree Borland | kelsimareeborland | Updated on October 11, 2017

Eric Eckardt Eric Eckardt

Residential brokerage is moving to a flat-fee model, and commercial brokerage may not be far behind. The UK-based residential realty firm Purplebricks is making its foray into the US market with an office in Los Angeles. The company works on a flat-fee, rather than commission-based, model, and has seen major success. It is the number one residential brokerage firm in the UK and expanded to Australia last year.

“Given the changing consumer behavior, the marketplace was thirsty for a model with both great service and value,” Eric Eckardt, CEO of Purplebricks, tells GlobeSt.com. “Today, we are now the number one real estate firm in the UK. The US has one of the highest commission rates for an industrialized nation. Right now, commission rates are anywhere fro 5% to 1 0%, despite the fact that home values have increased over the last decade. As a result, consumers have spent more than $70 billion per year in commissions. We thought that the US was the next logical step.”

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