Aspirant trade body CIELA – the Charter for Independent Estate and Letting Agents – has complained for a second time to the Advertising Standards Authority about Purplebricks.
It follows a complaint which was upheld by the ASA last October.
The ASA said that Purplebricks should always make it clear when comparing itself to other fee models that its fee was always payable.
However, Charlie Wright, CIELA founder, claims that Purplebricks has ignored this ‘plain English’ ruling.
He said that the calculator on the Purplebricks website does not state that the fee is payable regardless of whether the property is sold.
Last night a spokesperson for Purplebricks said: “We are confident that we are and have since the ASA’s ruling been fully compliant.
“Following the ASA decision, changes were immediately made to our TV advertising and our website, which now features prominently in the FAQs greater transparency in our pricing.”
The fact that you have to pay Purplebricks whether you sell or not should be on their homepage in the same part as the fee calculator. Most people wont ever read the FAQs, and from what i read it isnt overly explained to people on valuations/sign ups that you have to pay if you dont sell.
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“The operating statistics reported today look impressive, although despite the sparkle we still cannot see how many customers have actually been able to sell their homes after paying Purplebricks an average of £1,138 (ex VAT)”
Source http://www.propertyindustryeye.com/eye-newsflash-purplebricks-reports-sales-of-43m-in-uk/
The Purplebricks actual declared average fee to the city investors (£1,365.60 inclusive of VAT) Rather more than the £849 advertised and no mention of pay upfront as required by the ASA in previous rulings.
With just circa 50% of transactions completing (according to the Sunday Times) this equates to an average fee per sale of £2,731.20
This is paid whether you sell or not so, comparing fee earning point with fee earning point (instruction to sale in this case) (approximately 1.2% – Possibly more than the average high street agents average fee per sale using Purplebricks conveyancing partners own figures.
Everyone is entitled to make the odd, genuine mistake in an advert. To continually make the same statements you know to be untrue suggests that those who are paid by the tax-payer and, professional estate agents to protect the public and agents need o take a long hard look at themselves in the mirror.
I’d like to thank CIELA for picking up my tweet when I spotted this and taking a complaint forward.
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Oh dear Chris, using other people’s misleading quotes now to mislead.
The £1138 figure is average income per instruction so not an upfront fee and most likely includes commission earned on completion as well as energy performance certificates, paid viewings and premium listings in Rightmove. It may in fact include commission earned from mortgages leads for both sellers and buyers. The average also includes London fees which are £1199 I think.
You are well aware of this.
Pot calling the kettle black there. Perhaps the ASA need to hear about yet another attempt to mislead?
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The advert states “standard fee”.
A standard fee is what most people would understand to be the fee they would expect to pay if they choose to list with Purplebricks PLC
Purplebricks investor information makes it clear that their average take per customer is at the level quoted by Jefferies </>.
London fees are what a London seller could expect to pay and will be a significant number of potential customers (circa 8.8 million people) whether they sell or not. It is a ‘standard fee’ for a significant number of viewers of that advert.
The ASA has ruled on this issue before. No doubt it will again.
Have you ever considered doing something creative with a pair of walking boots and a short pier?
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Chris my comment was in regard to your misleading statement. The fact you refer to the amount PB receive which is an average income per instruction as fees paid by the customer when they are obviously different things.
The ASA have of course not ruled on this issue before because technically it appears different. The question that will be answered is whether information available on the website elsewhere is satisfactory?
I expect the ruling to go against PB but maybe not. Once the ASA make their decision PB will no doubt comply.
Perhaps if CIELA took a look at your posts on here, your website, your blog and tweets they would find something to bring before the ASA?
In the meantime whilst these complaints rack up, as posted by somebody earlier, we have traditional agents charging a percentage of the asset they sell but hardly being transparent in regard to how the charges and keeping quiet the fact that they charge different customers different amounts. Likewise there’s no disclosure in regard to commission they earn on financial products and other referrals in regard to their clients.
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Yawn.
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And ‘set typical estate agents commission’ is not comparable is it…..because a typical estate agent’s commission normally includes accompanied viewings…and you are free to choose your own solicitor which is a lot cheaper.
The comparable figure for PB should be £1,500 to include the viewings charge and the extra you pay if you defer payment for 10months and still want to use your own much cheaper solicitor.
It should say ‘£1,500 chargeable on deferred basis whether you sell your property or not compared to 1.2%’
Now that would be transparent!
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Still meet people who have seen the adverts on TV or the Internet and are totally unaware that it a service they have to pay for, whether they sell their property or not. They automatically assume it is just a cheaper less personal ‘no sale, no fee’ offering!
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I’m assuming that all the agents jumping to criticize Purplebricks all advertise their fees clearly on their websites and office windows and will happily quote a fee over the phone? Nope….didn’t think so. We’ve done all this for the last three years. Clients like the transparency and we use it as a big selling point. Being clear and honest with our fees has done us no harm. Maybe others should try?
For an industry who are notoriously evasive about displaying it’s fees it’s a bit hypocritical to keep trying to catch out one of the few agents that do advertise their fees. I’m not a huge PB fan but they do give the public a clearer idea of their fees that 90% of high street agents. Fact.
And come on……the public know they’re an upfront agent and even if someone didn’t know, nobody’s ever listed with PB without knowing! No doubt they’ll make an amendment to the calculator then give it another month and another agent who hides his fees will make a new complaint about something that he doesn’t do either.
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What incentive is there for PB to sell my house?
If I ask the LPE will they sell my house, are they going to reply: “I take your money even if I don’t sell your house”.
Do they have a high street presence for those that do have use of the web or want personal contact and local marketing confidence?
Answer: They are not the same as traditional estate agents.
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MrLister
“I’m assuming that all the agents jumping to criticize Purplebricks all advertise their fees clearly on their websites and office windows and will happily quote a fee over the phone? Nope….didn’t think so.”
Yup – always have. I’ve never hidden my fees.
And I lose market appraisal opportunities as a result, when people are just hunting for an el-cheapo Agency.
Some might say that I was never going to get the business in any case, so I haven’t wasted time on an appointment. But to me NO appointment is a waste of time – it is an opportunity to form a relationship… which might benefit both parties in some way.
It is understandable that many are reluctant – or even refuse – to quote fees over the phone/in the office.
But your attempt to deflect attention from the real issue has limited effect.
This is not about those that don’t publicise… that don’t quote on request – they are doing no wrong.
Those that do – must do it correctly in accordance with Legislation.
Purplebricks – the company you say you’re not a huge fan of yet jump to their defence whenever their name is mentioned for all the usual wrong reasons – have what can only be described as an impressive record of having their wristies slapped for their failure to follow what is effectively an Idiot’s Guide to keeping on the right side of the Law in terms of published claims. Here is YET ANOTHER example of their serial disregard of ‘authority’ – yet you wish to use this as an opportunity to berate those that don’t flout the Law.
Methinks your keenness to improve night-time relations with your LPE partner is clouding your judgement, pal.
Take a leaf out of the books of the old guard – use your brain to overrule your loins.
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If they do list their fees they must do so clearly and without using misleading information. That is the point at issue here.
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As much as i think Cilea is a damp squib, I must admit i admire the tenacity Charlie has in regards to PB.
Shame ARLA etc do not.
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Pity NAEA can’t see the bigger picture beyond the fees they get from the Call Centre Listers
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It would be interesting to know just how many of those fees they actually are getting…
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I would hope its per rep as opposed to per area.
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Whilst I agree with the comments above that the pricing should be clearer, and it should be made very, very clear that you pay PB whether they agree and conclude a sale or not, it does make me chuckle somewhat that people are stupid enough to think they would pay nothing. Do they think PurpleBricks are a charity selling houses for nothing?
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Morning Cyberduck
I note your comments above.
Did you forget to include the huge conveyancing referral fees for both users and some buyers?
What about the deferred fee payment of £360 for those users who later decline to use PB’s conveyancers possibly as a consequence of some very poor reviews?
With these huge extra charges in addition to those you quote above, I must admit that I am surprised that PB’s average fee per transaction is so low.
Does this imply separate conveyancing company’s where these considerable profits are accounted for elsewhere?
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I wouldn’t say people are ‘stupid enough’ but I would say that a generation of first time sellers, that have been brought up on the ‘free this, free that’ internet may be inclined to think it earns its money from other sources, such as paid for advertising, banner ads, selling data and ongoing other service commissions….perhaps like ‘comparethemarket’.
Equally there will be vulnerable customers who will believe what they are told and are desperate to sell at an ‘unattainable‘ listing price for a low fee….because of the situation they are in.
Finally there are still many people out there that do not realise it is a pay whether you sell or not model …..until I tell them on the appraisal.
At the end of the day the advertising and marketing is aimed solely at getting people to make contact in one shape or form. If someone picks up the phone to me I immediately start building a relationship with them from that point, and that’s three quarters of the battle isn’t it? If they ask me my fees I will tell them straight away. We win the business from quite a high proportion of the people that contact us, the same I am sure as most agents who know what they are doing.
So the more people that contact you, the more business you get….which is why the Call Centre Listers do everything possible, including disguising fees as low as possible (often using investor supported fee subsidies), without the extras that would normally be included (like viewings), gaming/working the review site systems and keeping information that might be off-putting hidden or in small print (like pay whether you sell or not)…to get more people to contact them!
BSOS23PC
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Sorry – but I’m firmly of the opinion that CIELA are simply making their chops wobble to muster support.
That carries bu99er all weight with me.
As pointed out above this is an expected reaction to a Chris Wood Tweet seen by Mr Wright.
Surely they should have been aware of this most recent example in a long line of misleading published claims themselves, having already engaged ASA on the subject?
CIELA have done nothing from day #1 but react to what others have been saying – and then take these borrowed ideas forward as their own.
What happens when their ‘ideas tap’ is turned off?
I’d like to ask Mr Wright the following ‘open question’ (annoying as it is – it seems to be the modern way of doing things)…
Mr Wright.
On the CIELA website it states
“We will publish a comprehensive public register of all known legal operators.”
Could you please confirm whether or not PurpleBricks will qualify to be listed on CIELAs ‘public register’ of “legally compliant” Estate Agents.
Thank you, PeeBee.
(proud Member of your anonymous Troll collection)
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So far two Tweeted requests to CEILA for a response to the above by Mr Wright have brought exactly what you can see here – SQUAT.
#Wonder_Why…?
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The radio advert for Purplebricks makes no mention of their fee being payable whether they sell or not – should it ?
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Absolutely……otherwise it is leading someone to make a transactional decision without knowing the biggest ‘material fact’ of all. Best you contact CIELA with where you heard it and when!
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PB do as much as they possibly can to obtain calls, which they do very well indeed. Even their current radio advert asking how are your fees so cheap – the answer was we don’t have high street offices. Wrong answer! The correct answer is they make whether you sell or not and that is very much unclear, so they get the calls.
I think all forms of promotional advertising should make it clear that the fee is payable whether you sell or not as clear as “traditional agents” state that they work on a “no sale-no fee basis” – that will make the pitch fair for all and wont mislead the general public as most people know when advertising you need to “speak” to the lowest common denominator, so everyone has an understanding.
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dannymagix79
You are absolutely correct – but unfortunately what you rightly say should happen won’t.
Following their most recent spanky bum-bum (credit:’Neighbour’, Not Going Out) punishment by the gummy puddy-tat that is the ASA, the ruling stated that
“…when making a comparison to other fee models in their ads, they made it clear that their flat fee was always payable.”
So – what happened as a result of that fairly bold, precise and compelling ruling?
The micro-wording, which appears for approximately twelve seconds (and doesn’t actually pop up until almost one third of the advert has played) was amended to contain the following weak, wooly and unclear-as-to-its’-message wording –
“Fee payable regardless of sale.”
Surely should that message not read
“Fee is payable whether or not your property sells.” ?
But it won’t. Or – if it is challenged again (which of course it bl00dy well should be…), ASA will roll it round those toothless gums again for another few months, during which time more and more will take the bait and he reeled in – and those that suffer #CONmisery will no doubt blame our entire industry as a result of the doings of one firm.
The answer is clear.
All of us looking for fairness; all of us who have fought and are fighting tooth and nail for a level playing field – we need to amend accordingly our expectations of what is “fair” and what is “level”.
Seems like a much easier plan than to continue to suffer the perpetual disappointment of expecting these jobsworth organisations to actually #DO_SOMETHING to make it happen…
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