An online agent which said that it provided “a complete estate agency service at a fraction of the cost” has been found not guilty of illegal or misleading advertising.
In an important case, the Advertising Standards Authority this week refused to uphold a complaint against Hatched.co.uk
Another agent, Country Properties, had complained to the ASA about Hatched’s claims on its website.
The Hatched website said: “A complete estate agency service at a fraction of the cost.”
It 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 on to you.”
Country Properties challenged whether the claim “a complete estate agency service…” was misleading and could be substantiated, because Hatched did not offer, or perform, a number of services that other high street agents did, such as providing office windows, local newspaper advertising and property particulars.
In addition, they believed that Hatched did not possess local knowledge when deciding on an asking price, were not able to make “properties more saleable by working up and down chains” and were unable to “piece together sales”.
Hatched was invited by the ASA to respond to the complaint.
Hatched argued 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 three references that they judged to be significant: The Estate Agents Act 1979, The Property Ombudsman’s Code of Practice and the NAEA Code of Conduct. They said they fulfilled the criteria set out by the Act and were members of both TPOS and the NAEA and adhered to the relevant codes.
Hatched said there was no obligation for estate agents to offer a window display or to advertise in local newspapers. Hatched argued 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 claimed that the elements suggested by CP as a “complete service” were actually embellishments not mandated by law or by the relevant regulatory bodies. They stated that every agent was different.
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.
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. However, 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, Zoopla and checkmyarea.com, as well as the Land Registry and Ofsted websites.
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.
Hatched also believed that they were better placed than many agents to “work up and down chains” because they covered the whole of England and Wales.
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 claimed 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.
The ASA did not uphold the complaint, saying that Hatched fulfils the criteria set out by the Estate Agents Act 1979 and was a member of the TPOS and NAEA.
While it acknowledged CP’s concern that Hatched lacked local knowledge, it noted that Hatched used a number of different resources to gain local insight and to help them reach a suitable asking price for a property.
The ASA also said it recognised that a consumer would have different expectations with regard to an online estate agent and a high street agent, and in approaching an online agency, would already anticipate that the methods used might vary from those of a high street agent.