Ad description
A website for an estate agent and two property websites, viewed in August and September 2011:
a. Text on the first property website stated "2 bedroom terraced house for sale. Offers in Excess of £49,950". Further text stated "£22,500 DISCOUNT The Express Estate Agency offers this ATTRACTIVELY PRICED PROPERTY to buyers who are in a position to buy relatively swiftly. This property is PRICED LOW to encourage a quicker than normal sale".
b. A further ad on the first property website stated "3 bedroom terraced house for sale. Offers in Excess of £74,950". Further text stated "21% DISCOUNT - This property has been INDEPENDENTLY VALUED by a Royal Institution of Chartered Surveyors (RICS) Valuer at £95,000 The property is offered significantly BELOW MARKET VALUE ... These genuine discounts are offered based upon the property's independently verified market value. All of our surveyed properties have been valued by an independent Royal Institution of Chartered Surveyors Valuer in order to confirm that all of our properties are offered with true discounts".
c. Text on the second property website stated "3 bedroom terraced house for sale £69,950." Text beneath the Property features stated "Offer in Excess Of ... ". Further text beneath the Property description stated "***£69,950*** The Express Estate Agency offers this Attractively Priced Property to buyers who are in a position to buy relatively swiftly. This property is Priced Low to encourage a quicker than normal sale .... Early viewing is highly recommended due to the property being priced low to encourage a quick sale". Text beneath the Listing history heading stated " ... Last sale £99,950 on 25th Apr 2005".
d. Text on the Express Estate Agency website stated "***Offers in Excess Of £64,950***The Express Estate Agency offers this ATTRACTIVELY PRICED PROPERTY to buyers who are in a position to buy relatively swiftly. This property is PRICED LOW to encourage a quicker than normal sale".
Issue
SB property and three members of public challenged whether the advertised prices and discounts featured in the ads were misleading and could be substantiated.
Response
Express Estate Agency (Express) explained that their properties were offered at marketing prices and not asking prices. They said that they aimed to sell the properties at a higher price than the "Offers in Excess Of" or "Offers Over" marketing prices shown in the ads. They contrasted that practice with the use of asking prices which sought to achieve the value advertised or as close to that figure as possible. They said that when dealing with consumers' enquiries, their representatives explained their pricing policy and that they valued the properties above the marketing price listed in the ad. They also said the price a vendor may initially seek and the offer which they eventually accept were often very different.
Express said ad (a) made clear that the discount referred to a "£22,500 Discount From Previous Agents Marketing Price". They believed the ad also made clear that offers were invited in excess of £49,950. They explained that the vendor had rejected the complainant's offer, which was in excess of £49,950, because they believed they could achieve a higher amount and said that it was the vendors' prerogative to accept or reject an offer.
Express said, from their significant experience, Scottish Home Report valuations were often very optimistic, especially in the current climate. They said they valued the property in ad (b) at between £75,000 and £80,000 and therefore invited offers in excess of £74,950. They also said they had no notes on their system to indicate that the vendor sought a specified amount.
Express said the website on which ad (c) appeared did not allow them to state "offers in excess of" beside the headline price. They also explained that their representative had informed an enquirer that they were looking to achieve a value in excess of £69,950 and which was as close as possible to the seller's perceived value of the property, which was in the region of £95,000.
Express explained the property in ad (d) was marketed at offers in excess of £64,950. They said that they received several offers in excess of that value and that the property was sold for a value significantly in excess of £64,950.
Assessment
Upheld
The ASA acknowledged that it was the vendor's prerogative to decide whether to accept or reject an offer. However, we considered that the advertised prices should be an accurate reflection of the price sought for the property.
We noted that ads (a), (c) and (d) invited "Offers in Excess of" and considered that in conjunction with the claim "This property is PRICED LOW to encourage a quicker than normal sale", consumers were likely to interpret the ads to mean that the properties were available for an amount which was a little in excess of the prices listed. However, we understood from three of the complainants that Express informed them that the vendor sought an offer which was significantly in excess of the advertised price.
We noted Express' comments that the property listed in ad (b) was valued by themselves at between £75,000 and £80,000. We also noted the ad invited "Offers in Excess of £74,950" and that genuine discounts were offered based upon the property's independently verified market value. However, we understood from the vendor that the property had been valued at a much higher value within the Home Report valuation and that the minimum offer they were prepared to accept was significantly greater than £74,950. We also understood that that had been made clear to Express.
We were therefore concerned that the prices sought for the properties were significantly higher than the prices stated in the ads. Since we had not seen adequate evidence to substantiate the advertised asking prices and discounts, we concluded that the ads were misleading.
The ads breached CAP Code (Edition 12) 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 3.17 3.17 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication. (Prices).
Action
The ads must not appear again in their current form. We told Express to ensure that, in all future ads, the prices listed were an accurate reflection of the price sought for the property and were capable of robust substantiation.
