Ad description
Three online ads offered properties for sale through Springbok Properties.
a. Claims on www.springbokproperties.co.uk first seen on 29 September 2013 and throughout October and November 2013, promoted the sale of a property in Sunderland. Text seen in November 2013 stated "3 bedroom, Terraced house for sale ... Offers in Excess of £70,000”. Under the subheading "Full Description" text stated “***Offers In Excess Of £70,000*** With a view to secure a FAST SALE at a final price close to our MOTIVATED seller's expectations, Springbok Properties offers this property at a keen starting price to invite and encourage viewings and negotiations from buyers who are in a position to purchase fairly quickly. All serious offers will be considered”. Text under the subheading "Note" stated "The price given is a marketing price and not an indication of the property's market value. The vendor like any seller is looking to achieve the maximum price possible. Hence, by making an enquiry on this property, you recognise and understand that this property is strictly offers in excess of the marketing price provided".
b. Claims on www.rightmove.co.uk, in relation to the same property, stated "3 bedroom terraced house for sale Offers in Excess of £70,000" and included the same text under "Full Description" and "Note" as in ad (a).
c. Claims on zoopla.com, in relation to the same property, stated "3 bedroom terraced house for sale Offers over £70,000 ... Property description ***Offers In Excess Of £70, 000***" and included the same text under "Full Description" and "Note" as in ad (a).
Issue
The complainant challenged whether the "Offers In Excess Of" prices stated in the ads were misleading, because they understood that the vendor would only consider offers which were much higher than those stated in the ads.
Response
Springbok Properties stated they used Offers in Excess of (OIEO) prices when marketing properties and considered that was made clear in their advertising. They stated that vendors were looking to achieve the maximum price possible and, when making an enquiry on any of their properties, customers recognised and understood that the offer should be in excess of the marketing price listed. They stated that they set their OIEO price alongside the vendor's bottom-line price.
In relation to the advertised property, they provided a signed contract showing that the vendor had agreed to market the property at "Offers in Excess of 65k" on 2 September 2013, which showed that the vendor would take any offer in excess of £65,000. They stated that the vendor in question had, however, changed their mind several times during the end of 2013 about the price they wished to accept. The advertisers had therefore had to adjust the marketing price in line with the vendor's bottom line. They provided a screenshot which showed the dates on which the price was adjusted and a dated note on their IT system which had been added when they were notified that the vendor wanted to sell the property at a higher price.
They reiterated that their advertising stated "The price given is a marketing price and not an indication of the property's market value. The vendor like any seller is looking to achieve the maximum price possible. Hence, by making an enquiry on this property, you recognise and understand that this property is strictly offers in excess of the marketing price provided" which showed they were making the buyers aware that offers should be "In excess of £X".
They also provided examples of properties they had recently exchanged and completed contracts, which showed the OIEO and Sold Subject To Contract (SSTC) prices.
Assessment
Not upheld
The ASA understood the OIEO pricing model departed from the more traditional method of marketing properties in England (using an asking price and seeking to achieve the value advertised or as close to that figure as possible), and we considered consumers therefore might not be familiar with OIEO pricing. We considered, however, that regardless of the format in which the price was presented, consumers had a general understanding that the stated property prices in ads were the basis for beginning a process of negotiation and the final price agreed by the vendor would be dependent on a range of factors. Notwithstanding that, we considered that consumers would understand the claims "Offers in Excess of [price]" to mean that the stated price represented the minimum price the vendor would be willing to accept for the property and that the vendor would be very unlikely to accept an offer below that price.
We noted that the complainant had acknowledged that the property had been initially advertised as "OIEO £65,000" in September 2013, and had made two offers in excess of £65,000, both of which were rejected. The price was then increased to "OIEO £75,000" in October 2013 and the complainant made a further two offers, including one at £75,000, which was also rejected. On 7 November, the complainant noted that the property was being advertised at "OIEO £70,000".
Because we considered that consumers would understand the OIEO price to be the minimum price at which the vendor would be prepared to sell their property, we considered it was acceptable to set the OIEO price at or above the lowest price in the vendor's bottom line range. We noted that the advertisers had provided a signed contract showing that the vendor had agreed to market the property at "Offers in Excess of 65k" and considered that that showed that the vendor had initially agreed to consider offers at £65,000 or higher.
Although we understood that the advertisers maintained that the vendor had changed their mind on price several times, which meant the advertiser therefore had to adjust the marketing price during the end of 2013, we noted that the property had always been advertised at prices that were higher than the vendor's documented bottom line of £65,000.
Because we considered that it was acceptable to set the OIEO price at or above the lowest price in the vendor's bottom-line range and because we had seen evidence that the vendor's bottom line was the same or lower than the advertised OIEO prices of £65,000, £75,000 and £70,000, we concluded that the claims were unlikely to mislead.
We investigated the ad 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 3.17 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), but did not find it in breach.
Action
No further action necessary.
