Ad description
The website, www.hatched.co.uk, promoted an online estate agent. Text on the home page, under the title "A complete estate agency service at a fraction of the cost", stated "With over 90% of house sale enquiries now coming via the internet, we recognised that there was no longer any need for estate agents to have expensive high street offices in multiple locations, company cars, and newspaper adverts. So we've done away with all of these - and are passing the savings onto you".
Issue
Country Properties challenged whether the claim "A complete estate agency service ..." was misleading and could be substantiated, because they believed that Hatched.co.uk Ltd did not offer, or perform, a number of services that other high street agents did, such as providing display/office windows, local newspaper advertising and professionally produced property particulars. In addition, they believed that Hatched did not possess local knowledge when deciding upon an asking price, were not able to make "properties more saleable by working up and down chains" and were unable to "piece together sales".
Response
Hatched.co.uk Ltd (Hatched) explained that there was no legal definition of the phrase a "complete estate agency service", and no guidance from any professional body or any law as to what estate agents should or should not offer in terms of a "service". They highlighted, however, that there were three references that they judged to be significant: The Estate Agents Act 1979, The Property Ombudsman's (TPOS) Code of Practice which set out guidance as to what estate agents should offer customers and the National Association of Estate Agents' (NAEA) Code of Conduct, which again set out a series of rules for members to abide by. They said they fulfilled the criteria set out by the Act and were members of both TPOS and the NAEA and therefore adhered to all points of the relevant Codes.
Hatched said there was no obligation for estate agents to offer the services highlighted by Country Properties (CP) such as having a window display or advertising properties in local newspapers. They said using such media did not demonstrate that an estate agent offered a better or more rounded service. In the current internet-enabled age they felt that the priority for an agent was to get properties seen by as many members of the public as possible, which is what Hatched did by listing their properties on numerous property portals including Rightmove, Zoopla and Primelocation.
Hatched stated that, in their view, most consumers would consider that an estate agent's service amounted to offering guidance on the value of a property, taking instructions from a client as to how they would like their property to be marketed (including the price the client would like to ask for their property), and trying to sell the property. They claimed that the elements suggested by CP as a "complete service" were actually embellishments or extras that were not mandated by law or by the relevant regulatory bodies, and were over and above a complete service. They stated that every single estate agent was different and that they were entitled to offer whichever "extras" they saw fit.
Hatched said that, although they didn't offer some services as standard, they would make the required arrangements if a client so desired. They explained that they prepared a PDF brochure for every client and produced a glossy brochure if required, and provided an example of a glossy brochure they had recently produced on a client's instruction. They said they were able to advertise their properties in their office or in a window, but that none of their clients had ever instructed them to do so. They also stated that no agent could offer a window display to all of their clients as the number of properties on an agent's books would vastly exceed the number that could be advertised in their window, so that was not a service that most agents offered as standard. With regard to newspaper advertising, Hatched said the majority of their clients instructed them not to do so, and that they actively advised against it, as it was a costly exercise for the seller now that the internet was the starting point for most searches. They provided a recent example of an ad they had placed in a local paper after the client had instructed them to do so.
Hatched denied having a lack of local knowledge when valuing houses, and explained that they researched areas using various sources such as Rightmove and Zoopla, including the professional areas of each, checkmyarea.com, as well as the land registry and OFSTED's websites where necessary. They explained that those resources helped them to locate local amenities such as schools or stations that would impact upon the price of the property, and listed recently sold houses along with the price they sold at and competing properties on the market. Hatched also highlighted that they visited every property to undertake a valuation and used that visit to assess factors such as the local area, road access, surrounding major road networks, and the condition of the other properties in the locality. In response to CP's assertion that one of the resources that they used to value their properties was to advise sellers to invite a local agent round to give their opinion, Hatched confirmed that they did encourage clients to seek a valuation from a local agent, as that was in the interest of the seller. They stated that they would not be offering their clients the correct advice if they told potential customers to simply get one agent to value their property and asserted that a solicitor would advise a seller to get three valuations to help them decide which agent to use and what price at which to market their property.
Hatched also believed that they were better placed than many agents to "work up and down chains" and "piece together sales". They highlighted that most agents only covered a small geographical area, so that if they had a chain that they were trying to piece together, then the agent was unlikely to be able to offer a selling service to a client who was more than 10 to 15 miles away. In contrast, because they covered the whole of England and Wales, Hatched believed they were better able to piece together sales for many individuals who were more dispersed.
In addition, Hatched stated that they offered several "extra" services as standard including: floor plans, unlimited photos, text messaging to set up viewings, a vendor login area and a conveyancing department. They also highlighted that they were the only estate agent to cover the whole of England and Wales. They stated that they actively encouraged their customers to sell their houses in a different way from a conventional high street estate agent because there was a substantial cost saving to be made, but that they achieved the same result which was to sell a house for the best price possible. They therefore considered that Hatched offered a "complete" service.
Assessment
Not upheld
The ASA understood that Hatched fulfilled the criteria set out by the Estate Agents Act 1979, and was a member of the TPOS and NAEA, and therefore adhered to the rules or standards set out by their Codes of Conduct. We acknowledged that there was no guidance from a professional body or legal requirement for an estate agent to offer particular services such as newspaper advertising or window displays. We noted that Hatched believed that the services highlighted by CP as central to a "complete estate agency service" were in fact "embellishments" that any agent could choose to offer if they wished, but that were not essential. Similarly, we noted Hatched offered their own "extras" as standard, including unlimited photos and text messaging to set up viewings. We also noted Hatched's comments that not every property on the books of a high street agency would be advertised in the local press or their particulars prioritised in the window display, and that Hatched would offer those forms of advertising if they were instructed to by a client. They provided examples of press advertising and glossy leaflets that they had produced for clients.
We acknowledged CP's concern that as a national agency, Hatched lacked local knowledge, and would not be able to find clients for properties. We noted, however, that Hatched used a number of different resources to gain local insight and to help them reach a suitable asking price for a property. In addition, we acknowledged that often Hatched would be well placed to "piece together sales", especially if a client was moving over a large geographical distance rather than locally, and could use Hatched to both sell and purchase a property.
We recognised that a consumer would have a different expectation with regard to an online estate agent and a high street agent, but that they would still expect the service of guidance regarding the price at which to market the property, for the agent to market the property successfully and for a sale to be achieved. We considered, however, that consumers who approached an online agent or sought information regarding an online agency, would already anticipate that the methods used by the agent may vary from a high street agent, and for example, not expect the agent to produce hard-copy particulars. We also noted that on their website Hatched clearly stated "... we recognised that there was no longer any need for estate agents to have expensive high street offices in multiple locations, company cars, and newspaper adverts. So we've done away with all of these - and are passing the savings onto you". Because there was no strict definition of what constituted "A complete estate agency service" and because we considered Hatched offered a service that was in line with most consumers' expectations of "A complete estate agency service", we concluded that the claim was not misleading.
We investigated the claim under CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising), 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation) and 3.11 3.11 Marketing communications must not mislead consumers by exaggerating the capability or performance of a product. (Exaggeration), but did not find it in breach.
Action
No further action necessary.
