Online agents MUST warn sellers if charge applies whether property sells or not, says advertising watchdog

Online agents who charge upfront have been told that they must forewarn the public if the charge applies regardless of whether the property sells or not.

Yesterday, the Committee of Advertising Practice issued new guidance via the Advertising Standards Authority website, with one sub-heading saying “Get what you pay for”.

The advice is prefaced by: “Just as bookshops, taxis and takeaways have seen their industries revolutionised by online companies where you can order anything you need at the press of a button, estate agents have also found themselves competing with new ‘online-only’ companies.

“Property is big business and the popularity of these services has grown dramatically over the past few years, as has the number of complaints to the ASA about ads for them. To help online estate agents see their ads through to successful completion, here are some key areas to pay attention to.”

The advice goes on to tell online agents to be careful about claiming ‘local’ expert knowledge – although it does say that Local Property Experts only need local knowledge, rather than be based locally.

Additionally, the new CAP advice says that online agents who claim to offer savings over fees charged by traditional firms must offer proof that they really are cheaper.

The new advice says: “Adequate evidence must be held to support any comparison. Savings claims must be supported with comprehensive documentary evidence.”

The new advice also says that consumers must also be told of any “significant limitations”, such as being charged an extra fee to use their own conveyancer, or being charged extra for accompanied viewings.

On Local Property Experts, the new CAP advice says: “It’s not uncommon for online estate agents to make claims about the ‘local’ knowledge and expertise of their staff, despite being an online company that might not be based in or around a particular location.

“Depending on the context, access to a ‘local property expert’ seems generally likely to be considered to refer to local knowledge of a geographical area, rather than necessarily the physical location of the ‘agent’.

“It is therefore broadly likely to be acceptable to refer to ‘local’ property experts if it can be proved they have relevant knowledge and experience within a defined geographical area.

“However, care must be taken not to imply the existence of physical branches or being based  in particular locations, when that is not the case.”

https://www.asa.org.uk/news/moving-on-up-online-estate-agents.html

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16 Comments

  1. AgencyInsider

    So, several years on from the launch of agencies that peddle the snake oil of ‘payanyway’ fees etc, the ASA issues this guidance.

    What have you been doing all this time ASA? Twiddling your useless thumbs and ignoring the tidal wave of evidence that customers have been and are being misled, missold, and conned left right and centre.

    ASA – YOU ARE A SHAMEFUL DISGRACE AND ARE NOT FIT FOR PURPOSE. And yes, I am shouting..

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    1. Bless You

      Interesting. At least something has been done.

      Did this come about from industry pressure, customer complaints or a general monitoring of sites like p.i.e?

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      1. Bless You

        Also  if trading standards were doing their job 4 years ago, there would be no fake payanyway industry and no public complaints. 
        Gravy train regulators are as bad as the rats. 

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  2. ArthurHouse02

    All well and good saying an LPE must have local knowledge, but presumably that knowledge is gained by either working or living in that area, not by looking at Rightmove etc. I know Man Utd play in Manchester, but it doesnt mean i know anything else about the area.

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    1. Malcolm Egerton

      ‘I know Man Utd play in Manchester’ – Don’t say that to a United supporter; City are the Manchester team (confusing, I know).

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  3. M Barnard

    Despite this guidance, and previous rulings (2016 & 2017) against adverts where Purplebricks have been told to make clear that ‘a charge applies regardless of whether the property sells or not’ their own website still does not clearly state this material fact.

    Beggars belief how these things are not followed through.

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    1. DASH94

      It’ll be a fast moving line of text – possibly with a speeded (sped?) up voiceover added to the final 2 seconds of the current TV ads.    If that.

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  4. Leespoon

    If you listen very carefully, you can hear the death knell tolling… it is feint, but it is there…

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  5. Ostrich17

    “the popularity of these services has grown dramatically over the past few years, as has the number of complaints to the ASA about ads for them.”

     

    How many complaints does it take for NTSLEAT/TPos etc to be stirred into action?

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  6. SLF

    And high street agents still don’t have to advertise their fees and still stutter and bumble if you ring them up and ask what they charge!?

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    1. ArthurHouse02

      Why should high street agents have to advertise their fees, we are a customer service based industry not competing purely on cost. The issue with certain companies referred to in this article is that they must make it clear that their fee is payable whether the owners property sells or not. Unlike a proper estate agent who only charge on completion.

      If anyone asks me our fee i will tell them, but unlike some of the companies referred to, I will clarify exactly what it covers….which is everything!

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      1. Malcolm Egerton

        ‘…we are a customer service based industry not competing purely on cost’ – so are, for instance, solicitors, but they disclose their fees upfront.

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        1. ArthurHouse02

          I fully discuss our costs before a vendor decides whether to go ahead or not, but they are not published on the website. If someone wants to discuss our costs before having us out, i will thoroughly discuss what we do and what the costs are.

          When car manufactures advertise what they are selling do they fully disclose the final on the road price in their advert so you can make a decision before you visit the show room? No they dont, for many reason but probably including that you arent making a decision based purely on cost.

          Cars like estate agents are very different from one another.

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    2. Purple is the colour

      Dear SLF,

       

      you’re absolutely correct. Take it on at almost any fee or price, just to get market share, blah blah blah.  The high street days are numbered for many Estate Agents out there and they know it which is why they constantly and ignorantly knock the online Agents.

      Never tell them our fee until you’re sitting on their sofa etc etc etc. Prehistoric times ladies and gents, Those Purplebricks guys have got it all covered.

       

      When the time comes and it will, you find yourself speaking to your recruitment agents you’re offered the opportunity to join the most exciting Agents in the country, think again before dismissing it, think where they have come from in 5 years and imagine where they will be in another 5 years!

       

      Do you not not think that TeamGB would not have done their due diligence on an incoming sponsorship partner?

      Hey they didn’t get it right in the US or Aus but they have it right here.

       

      The trolls amongst you, bring it on but really, don’t waste your pathetic efforts on me, surely your all too busy hitting your KPI’s and trying to persuade Mrs Miggins why you’re worth 1.5%.

       

      over and out.

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  7. Malcolm Egerton

    Are they going to be clobbered by the CMA for manipulating reviews next?

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  8. Woodentop

    Additionally, the new CAP advice says that online agents who claim to offer savings over fees charged by traditional firms must offer proof that they really are cheaper.

     

    Does that mean the end of PB and the like using London high street fees, against the rest of the country high street, who are cheaper? If so they will all have to scrap all their current telly ads.

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