A major developer offering a part exchange service has been told to stop telling customers that it will offer them 100% of the market value of their existing home – unless it explains prominently what this means.
David Wilson Homes, part of Barratts, was the subject of a complaint to the Advertising Standards Authority after someone offered a price for their home"100%" part-exchange price for their home received higher valuations from estate agents.
While the developer explained that it took an average of two valuations, it did not spell out in its “large print” that the valuations were on the basis that the home would sell quickly – within eight to ten weeks.
In most of the country, average time on the market is over ten weeks.
On its site, David Wilson Homes said: “We could be your buyer, offering you 100% market value for your current property, the average of two independent valuations.”
Text beneath repeated the message: “We could buy your existing house from you, for 100% of its market value” and “We could buy your home, paying 100% of its market value.”
Text in small print at the bottom of the page stated: “David Wilson obtains two independent valuations and to ensure 100% market value, any offer made matches the average of these.”
The Advertising Standards Authority received a complaint from someone who did not believe that they were offered the true market value for their home, and had sought advice from estate agents who had valued the property higher than the offer received from David Wilson Homes.
The complainant challenged whether the developer’s claims to offer “100% market value” were misleading and could be substantiated.
David Wilson Homes told the advertising watchdog that there was no industry definition of “100% market value” and nor was there a clear customer perception of what that meant.
However, the definition they used for their advertising of the part exchange scheme was the average of two independent valuations of the property based on a sale within eight to ten weeks, and this was clearly set out in the terms and conditions on their website.
David Wilson Homes stated that estate agents were likely to have put forward proposed asking prices for the property rather than valuations, and that the asking price of a property was inevitably higher than its value.
The firm said it had made its terms and conditions clear to customers, and that the part exchange service gave customers the ability to move quickly.
In its ruling, the Advertising Standards Authority acknowledged that the meaning of the term “100% market value” was open to interpretation.
For that reason, the ASA said marketers using the phrase should ensure they made clear in their adverts how they would determine the market value of the property.
It considered that David Wilson Homes had done this by explaining how it obtained two independent valuations, and offered an average of the two figures.
However, the ASA was concerned that valuers were instructed by David Wilson Homes to value each property on the basis of achieving a sale within eight to ten weeks.
In some cases the valuer had also given a separate, higher, figure for the “market value” of the home including fixtures and fittings, but without specifying a timeframe for the sale.
The ASA believed that the stipulation of an eight- to ten-week sale period could negatively impact upon the price a property would achieve.
Although the ASA thought it reasonable for David Wilson Homes to calculate their offer from the average of two valuations based on a sale within eight to ten weeks, it considered that was significant information which should be clearly stated in order to clarify the meaning applied to the term “100% market value”.
Because it was not, the ASA concluded that the claims to offer “100% market value” were misleading. The advert must not appear again in its current form.
* According to Hometrack, the average time on the market is currently 8.4 weeks. However, this is driven by London (3.6 weeks) and the south-east (five weeks). In most of Britain – seven out of ten regions – average time on the market is in excess of ten weeks.
Comments
The true 'market value' is what price it ultimately fetches in said market.Unfortunately home owners have to run the gauntlet of local-agents-with-local-knowledge stating a range of prices based on their desire to gain the instruction PLUS developers offering a solution to a slow market that's based on them being able to flip the p/x quickly????? Not a great option for anyone looking to move.
Not when intermediary companies appointed by DWH say they cannot accept the figures I am submitting them because they are too far outside the range that they have already been provided.
They drive the agents down a route of total commitment not to a 6-8 week figure but a forced sale 14 day figure.
As the potential seller/part-exchanger then blames the agent I have been declining their kind offer to value. Their close links with an agent known for thick woollen jumpers from a renowned Scottish island means that even if I get multi instructed at a very generous 1% it's just not worth the paperwork.
Saying "We'll give you 100% of market value" is always going to be a minefield and DWH's interpretation of what that means is perfectly reasonable.