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Leading online estate agents rapped for misleading claims

Purplebricks and HouseSimple repeatedly censured by advertising watchdog

Leading online estate agents rapped for misleading claims

HouseSimple has become one of the latest online estate agents to be criticised by the advertising watchdog for making unsubstantiated and misleading claims in its adverts.

The online agent was reprimanded by the Advertising Standards Authority (ASA) on 16 August for stating that its customers saved £5,000 on average in fees, in TV advertising and in similar claims on its website, without providing robust evidence to support its claims.

This is the third time in the past year that HouseSimple has been rebuked by the ASA.

But worryingly, it isn’t the only online agent to fall foul of the ASA’s rules – Purplebricks, Hatched and eMoov have all been criticised for misleading claims over the past few years.

Find out more: online estate agents – see our advice guide

Housesimple: rebuked in February and November

Housesimple was ticked off by the ASA in February 2017 for stating that customers could sell a home for £495, but not making clear that they had to use its conveyancing and mortgage advice services to get that price.

And, in November, it was criticised for claiming it is ‘three times quicker’ at selling properties than other estate agents in an advert displayed on the London Underground. The ASA didn’t feel its evidence was robust enough to prove that assertion.

In response to the ASA’s most recent ruling Housesimple told us: ‘We respect the ASA’s decision, and have taken on board the points made in the ruling and will make the necessary changes to our television, online and print advertising. We believed we had substantiated the claims made in our television ads, and would never knowingly mislead the public.

‘We have thousands of happy customers who have saved a considerable amount in estate agent fees by using our service.’ It added that in response to the two previous rulings it has made changes to its advertising based on the ASA’s recommendations.

Purplebricks criticised for misleading fee claims

Leading online estate agent Purplebricks has also had three rulings upheld or partly upheld against it since March 2016, with the most recent being issued last month.

In July 2017 and September 2016,  it was criticised for making what the ASA said were misleading and unsubstantiated claims about how much its customers could save in estate agent fees.

And in March 2016, the ASA criticised it for saying, in a TV ad and on its website, that customers had ‘nothing to pay upfront’ to sell a property with it without making clear that there is a mandatory fee that would need to be paid at a later date.

A Purplebricks spokesperson told us: ‘We offer customers a fair, transparent and efficient way to buy, sell or let property and save customers millions of pounds in commission payments every year’ and that its fees were ‘significantly lower’ than those of a traditional estate agent. It also claimed to have a higher completion rate, too, stating that its instruction to sale agreed rate is over 83%.

Purplebricks said that all of its ‘TV advertising is verified and approved by Clearcast before it airs’ and maintained that the ASA’s ruling ‘did not disagree with the fact we save people money.’ It said that the ASA’s ruling was that answers given by customers on commission rates quoted in its advertising did not give a clear enough indication of an average commission rate charged, so the savings it showed in examples was potentially misleading.

Other online agents censured

Other online estate agents have fallen foul of the ASA. Last week, Hatched was censured for implying it had a physical branch on its website, when in fact it has no physical branch network.

And in June 2015 and June 2016, eMoov was also found to have made unsubstantiated claims.

Be wary of bold online estate agent claims

It is true that online estate agents often do charge competitive fees for their service, but it is crucial to understand what you are getting for your money. Three key things to watch out for are:

What do the fees include? You can expect a package to include at least the basics needed to sell a home, such as listings on the main property portals. But extras, such as the agent conducting the viewings for you, are likely to cost more.

When do you have to pay? – With some agents you will need to pay an upfront fee (meaning you have to pay even if you don’t sell your property). Some will let you defer payment, but you may still face a fee even if you’re property doesn’t sell. You may also have to enter into a credit agreement with the firm.

Companies that allow you to only pay on completion will often charge more for this option.

How long will they market my property for? Packages can be time-limited e.g. 10 or 12 months, rather than your property continuing to be marketed until it sells.

Find out more: How to find the best estate agents – see our advice guide

Pros of using an online estate agent

  • Fees: in many cases using an online estate agent could be a lot cheaper than using a high street agent. The more expensive your home is, the more you stand to save if they charge a flat fee.
  • Convenience: it can sometimes be easier to get hold of online estate agents. Their call centres are open during evenings and weekends, so they are able to deal with queries outside of working hours (although some high street agents may offer this level of service too).
  • Flexibility: packages can be tailored to your specific requirements, and you can often track viewings and feedback online (although some high street agents offer this, too).
  • Freedom to use multiple agents: generally, you can instruct other estate agents if you wish.

Cons of using an online estate agent

  • Lack of local knowledge: even online agents with regional reps could struggle to compete with a high street agent who knows your neighbourhood and its property market inside out.
  • Legwork: online estate agents may negotiate offers for you and act as a middleman to progress your sale to completion, but not all will. Taking charge of communications with buyers and solicitors without the help of an agent could be time-consuming and stressful.
  • Viewings: you’ll usually have to conduct viewings yourself, so you’ll need to be comfortable showing strangers around your home and be available during evenings and weekends.
  • Paying up front: if you opt for this type of package, you won’t be paying on results. In fact, you’ll have to pay even if that company doesn’t end up selling your house.
  • Selling price: because most online estate agents charge a flat fee rather than commission there is less of an obvious incentive to get the best-possible price for you. That said, they have reputations to maintain, and many companies claim they usually achieve the desired asking price.

Should I use an online estate agent?

There isn’t a straightforward ‘yes’ or ‘no’ answer to whether you should use an online estate agent.

If you think you know the local property market well and would be comfortable showing buyers around your home, using an online estate agent could present good value.

However, if you’re stretched for time or would prefer more tailored support and advice, you may be better off using a high street agent.

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