The term ‘commission’ in the context of estate agency is set to be at the heart of a complaint to the advertising watchdog.
The Advertising Standards Authority will almost certainly have to determine whether a commission is a percentage of the sale figure achieved by the agent; or whether the term also includes a fee.
If the challenge goes ahead, as seems likely, the ruling could have important implications for a number of online agents and others operating a flat fee structure.
In correspondence we have seen, a high street estate agent is challenging Purplebricks’ latest ‘commisery’ TV adverting on the grounds that it says it does not charge commission.
The agent – who has asked not to be named at this stage but who we must make clear is not a ‘regular’ on EYE – is citing a dictionary definition which says that a commission can be a fee or a percentage.
In an exchange of emails, Purplebricks strongly disputes the definition, saying that it does not charge commission but a flat fee.
The dispute has so far been dealt with between the two businesses, but it is now set to go before the ASA.
The high street agent maintains: “If you look for the full definition in the English dictionary for commission you will see it defined as . . . a fee or percentage allowed to a sales representative or an agent for services rendered.
“The fee you (Purplebricks) charge for the services you provide is commission. This makes your advert completely misleading to members of the public.”
The agent is also questioning the claim in the Purplebricks advert to be offering the same full service as a high street agent.
He has told Purplebricks: “I would class my business as a traditional estate agent yet our service is completely different to yours.”
However, Purplebricks has replied to him saying: “We do not agree that our TV advert breaches the BCAP Code of Conduct.
“Commission is a payment that is directly related to the amount sold. Purplebricks does not charge commission – we charge a flat fee, regardless of the price of the property.
“We also offer our customers the same service they would receive from a traditional estate agent. Our Trustpilot rating of 9.4/10 from over 12,000 reviews and world class NPS score of +80 evidences how highly our customers value us.
“Also, all our TV adverts are Clearcast approved before broadcast and are rigorously checked against the BCAP code, a code which we take very seriously. We also support the ASA and if they were to contact us, we would work with them directly to resolve any issues.”
The latest Purplebricks TV advert is here:
The definition of commission to which the agent refers is here, under section 4
“we charge a flat fee, regardless of the price of the property”…….. or whether the place sells or not
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When I read that I pictured Batman going “POW!” on an unsuspecting thug.
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Purplebricks (and others) charge a commission for listing a property for sale, not for selling it but, they do charge a ‘commission’.
Given their (and others) systems that allow clients to control every aspect of their listing, it is dubious whether PB are acting as estate agents at all (just a passive intermediary). I am currently awaiting a response back from Rightmove as to why such firms are being allowed to list.
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Don’t hold your breath, Chris!
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They don’t come under the description of a ‘passive intermediate’ Chris. This would make them not be required to join a redress scheme. A passive doesn’t offer ancillary services and has to connect the applicants directly to the agent including from boards.
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They are a passive intermediary Trev and it is best for them they stick to that as a description; your knowledge of the law should tell you why a business that is barely scratching its backside let alone covering its fixed costs ought to be very wary of classifying itself as an estate agent that takes remuneration from clients who fail to sell.
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The concise OED definition of commission refers only to a percentage, not a fee. The ASA will almost certainly reject the complaint and people, like my other half did when she first saw the ads, will go on thinking that PB don’t charge to sell a property. #conmisery
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This is the real misleading part…. everyone thinks they do it for free. I have had to tell several people otherwise.That’s just not right, because it is designed to make people make the initial contact after being misled. If you pick the phone up to someone enquiring about a valuation you’re already three quarters of the way there.
What we really need to know is how this marketing is affecting their listing numbers…..how they have changed since the start of the year?
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I would be surprised if the ASA decided it is a commission. Is it not the same as placing an advert in the local paper, you would not call that a commission payment.
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Is that an admission that is all they do? they are a passive intermediary internet listing facilitator. Most accurate and honest thing I’ve read.
They charge on average £1060 to whack a listing on the portals , they take a fee for the listing not a commission for the service.
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They ‘PiILFer’ in other words!
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For people who haven’t already seen this….
http://www.callwell.co.uk/blog/2017-02-07-commisery-or-commisential
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With all respect to ‘Bricks their previous adverts with the 2 actors pretending to be the Bruce brothers were ok, but these new TV and radio adverts are rude and ignorant. I cannot think of another industry where this sort of campaign would either happen in the first place or be allowed to take place. But as many people of authority look down on what we do, they probably see it as harmless fun. But as has been said many times previously this is for the NAEA really to take a stance.
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But still the NAEA stand, watch and do nothing as one of their members uses deliberate misleading propaganda on national TV advertising to try and put some of the majority of its other members out of business!!!!!
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A friend of mine is selling an inherited property in Cheshire for £45k. The agent is charging him 1.5% + VAT (no sale – no fee) which makes him a little less miserable than the fixed fee charged by some on-line agents for listing it. He get’s to use his brother to do the conveyancing too.
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The NTSEAT guidance on residential sales advises fees should include VAT not be plus VAT. The agent needs to look at how they show their fees.
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This is true Trevor, but as I am not their agent, please don’t report me. 😉
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Trevor, Eric is posting on Eye about a 3rd party, no-one is touting for business with incorrectly displayed fees or are you telling me the legislation has a subsection that means he has actually broken the law?
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Wasn’t just me that thought that was a strange/bizarre response then!
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I did a viewing for someone on one of our properties for sale yesterday, who is selling with PB, and has been doing so for the last year now. When I asked them about their experience they said they were really fed up over the whole thing, because they had signed without realising they had to pay whatever. They thought the service was no sale no fee, like ‘normal’ estate agency. They said that they had even complained to the ombudsman…who then came back and said they had to pay. It was clear they don’t trust anyone anymore!
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Well done on the agent challenging this.
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Surely the point here is not to discuss semantics with the ASA but whether they should turn a blind eye on an advertiser getting away with giving the impression their ‘service’ is FREE, gratis, and for nothing. Absolute scandal if this misleading (if not downright dishonest) type of advertising is condoned.
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If I sell something and get paid £50 (not a %age of the sale cost )for doing so, am I getting a fee or commission ?
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To be amore realiistic scenario you need to ask;
If I don’t sell something and get paid £50 (not a %age of the sale cost )for doing so, am I getting a fee or commission ?
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So would the ASA or trading standards allow this scenario?
Roll up, roll up, today’s special is the all singing all dancing 50 inch flat screen TV and music system that will save you 1000s!
What the advert does not say is that your £900 will be entered into a draw whereby only one in two people shall receive the TV.
It also fails to mention that their is no warranty on the TV and if it all goes wrong, either way, then tough?
When will the regulators realise that these company’s have to advertise success rates on a 1/4 basis so that the consumer is aware of the cost implications?
#Commission……A guarantee that you only pay for a product on completion of the deal?
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Strictly speaking you’re getting a fee. But that’s not the point. The point is that the gullible public thinks PB is offering its ‘service’ for FREE !! Because that’s what the advertising implies. The ASA is out of order for allowing this impression to persist.
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I couldn’t agree more ……but unfortunately, for the ASA to take it seriously it needs a potential customer to complain, not another agent….what about your mom?
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“We also support the ASA and if they were to contact us, we would work with them directly to resolve any issues.” No doubt, informally yet again!!!!!!
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Think Letting Agent fees and the poor, poor consumer – Letting agents have to quote “+ fees” in their property descriptions because consumers apparently didn’t realise that the monthly rent advertised wouldn’t include any of the associated referencing costs etc. Equally, where fees are displayed it wasn’t enough to mention the fee “+ vat”, the fee including the vat also needs to be displayed because apparently consumers can’t use a calculator and/or didn’t realise that adding vat onto any fee will considerably increase it.
So, what about the poor, poor consumer watching the Purple Bricks advert? Surely they won’t realise that “commission” and “fee” are (allegedly) 2 entirely different things?
So, is this an ASA issue or a consumer protection issue??
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PB have not moved on in the last year or so. They have settled at around 3% of the market, and this is roughly the same as when the on-line listings were shared around the other firms before PB arrived. The other online firms have suffered but we (proper estate agents) haven’t. There will always be sellers who are happy to risk using a cheap alternative and that is their prerogative of course.
The Trustpilot (TP) drivel needs looking at though. I have been engaged by lots of sellers (who initially went with PB) after they realised that there is no depth to PB’s service. I went on and sold the properties – but those sellers had still paid PB of course. Those sellers did not put negative comments on TP (even though I begged them to), as they were too proud to openly admit their mistake in being so gullible. I have also heard many buyers moaning about the difficulty in getting an appointment to view a PB property, let alone the attrocious ‘follow up’ service that is expected from a real estate agent. Again, these people have nothing to gain in putting a negative review on TP. So, it stands to reason that the TP figures will show PB in a positive light – another insidious PB tactic.
It is sad that the NAEA are refusing to do the right thing and at least publish their thoughts on this issue. Also, the ASA should insist that PB’s adverts say ‘non returnable fee, whether you sell or not, as opposed to a traditional model of no sale – no fee’. It’s not worth talking about what RM should do as they don’t care!
Regardless of the above, the only way that proper estate agents can ‘win’ is to continue to offer a far superior service to PB. All 8 of my offices are performing very well at present and we are overflowing with thank you cards, chocolates and flowers from happy clients. Keep faith….
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All good points. One thing is for sure… I will never take any notice of a TrustPilot review again, as it appears to be a ‘good publicity milking machine’ as opposed to a serious review site.
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Just read this guff on BBC site about Agent’s earnings. It’s as if the author was given 4 minutes to write an article on Estate Agents. http://www.bbc.co.uk/news/business-39002428
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Complete b0ll0cks! They never asked me!
I was earning more in ’97 than I am now.
A LOT more.
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