Two complaints against online estate agent Hatched have been upheld by the advertising watchdog.
Hatched has now been told that claims as to the amounts it saved consumers over high street agents were misleading and must not be repeated.
Hatched had claimed to save individual sellers £3,800, and to have saved them an overall £6m since it launched. The advertising watchdog said it had not done its sums properly, because it had left out the upfront fees.
The agent Country Properties, which complained, also complained about Hatched earlier this year. On that occasion, in June, the Advertising Standards Authority did not uphold the challenge and ruled that Hatched was entitled to say it offered a full estate agency service at a fraction of the cost.
However, Country Homes was this week successful in further challenges.
On its website, Hatched said: “We offer a choice of flexible fees to suit you. Our lowest and most popular fee is just £225+VAT upfront and then just £225+VAT again on completion of a successful sale. On a typical £200,000 house, this means that you’d pay less than £480, compared to around £4,000 if you used a high street agent! We’ve saved customers over £6,000,000 in estate agency fees, so it’s no wonder we are one of the fastest growing estate agents in the country.”
Unlinked footnote text at the bottom of the page stated: “Figures relating the individual and total fee savings of our customers who completed their house sale through Hatched.co.uk in 2012, and calculated using the average estate agency fee of 1.6%+VAT, as found in the OFT Home Buying & Selling Study 2010, and using Hatched.co.uk’s average sale price in 2012 of £218,000.”
In answer to the ASA, Hatched said the figure of £3,800 represented the average saving that a Hatched customer had made when selling their house in 2012, in comparison to the amount they would have paid if they had used a local agent.
It said the disclaimer at the bottom of the web page clearly communicated to consumers that fact and therefore they would be aware of how the figure had been calculated.
Hatched had used 2012 sales data to work out the average price for which it had sold a house, and the average completion fee, including VAT. It had then worked out the amount that an average customer would have paid if, at Hatched’s average house price, they had been charged the average estate agency fee for England and Wales, and compared the two figures.
Hatched had used national figures because it said it had five offices covering the whole of England and Wales and had marketed at least one property in every postcode area in England and Wales in the last seven years. It provided a report from the Office of Fair Trading showing the average estate agent fee nationally was 1.6%, excluding VAT.
Hatched therefore multiplied the average price it sold a house for in 2012 by the national average completion fee of 1.6% and added VAT to secure a figure for the average estate agency fee its customers would have paid if they had used a high street agent. The resulting savings figure was slightly less than £3,800, but had been rounded up to the nearest one hundred, and Hatched felt it was fair to claim that their average customer had saved that amount.
However, Hatched had not used its upfront fee in its calculations, saying this was a marketing fee and not commission for selling the property. The disclaimer also clearly stated that the saving was based on sales completed.
Hatched said it would consider including the upfront fee in future claims, but said that there were many high street agents who also charged a separate marketing fee – although it acknowledged it could find no independent evidence of such a charge being applied by high street agents.
Hatched provided spreadsheets which showed its sales data since the company was established in 2007, and data showing a more detailed breakdown of the fees charged for their 2012 sales.
Hatched said it had multiplied the 2012 savings figure by the number of properties it had sold since launching, which resulted in a figure of over £6m. It acknowledged that some agents would charge less than 1.6% commission, but that the OFT average figure was accurate and fair.
However, the ASA said the upfront fee charged should have been included in Hatched’s saving calculations – both for when it claimed to save individual customers £3,800 per transaction, and an overall £6m.
It also said that in claiming to have saved customers £6m since it launched, Hatched had calculated the figure by using their 2012 sales data as an average for each year of operation, rather than work out the savings made for each individual year.
Hatched has been told it cannot make the claims again.
The earlier case was reported by EAT here, while recently Hatched changed its website, and started stating prices inclusive of VAT.
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Comments
Oh dear Adam thats a silly post, it did you no credit at all.
No-one is mis-quoting Adam Day, no one is envious of him and there is certainly nothing to admire.
Every single agent in the land is capable of doing what he is doing; a full blown estate agency service for £ xxx??? claimed much cheapness but with hidden extras that bump up the eventual fee.
Transparency sums the bloke up, we can see right through him!
Ok so they got their sums a little wrong but lets not over cook it because I doubt Hatched will miss a beat. Likewise we can cry a river over semantics, bitch about Adam and misquote him whilst ignoring what he actually writes but lets be honest he's still a major threat to our industry and he's going nowhere, our little gift that keeps on giving.
Like it or not I have to admire his stones for going out and doing something we all say can't be done and all the while not hiding from us on this site, be still my beating heart. Yes It's easy to get all tumescent over any mis-step but before we start reaching for the tissues have a think about the validity of the online business model and how it will affect the very way we high street agents do business in the future?
You're a bugger Adam but I can't help feeling there's a lesson I should be learning...
Thank you AceofSpades
Quagmire - Where do I imply that you're all bent and crooked? I was just lauding Country Properties earlier for being a brilliant estate agent who does things the 'right way'...
I am merely of the opinion that you don't offer the sort of value for money that we offer. And that is that we provide the same result for a vendor, as you do, but for a much more competitive (and fairer) fee.
Like PeeBee & myself said to each other last week, regarding the upcoming competition/battle between high street agents and online estate agents over the next few years...
Bring. It. On.
You ain't seen nothin' yet
#OnlineEstateAgents #TheFuture #Hatched
Watch out estate agents...we're coming to get you...
last week he said the whole legal profession are up to no good.
your!
Ohhh get off your moral soap box Ace.
He doesn't run his business by having a pop at the back dated, out of touch and inefficient agents though does he? He spends his time implying that we are all bent and crooked.
He deserves everything he gets for being a misleading cheap skate.
Not interested - its a good job that you're anon. Do you know how stupid you look commenting after CHOOSING to read this article?!
Adam, I respect you and you're business. I think you know and serve your market very well. Keep it up.
An excellent 'high street' agent need not fear you. It's the back dated, out of touch and inefficient agents that you scare.
I am noticing a pattern across the angry, Desperate and child-like posters each time your name creeps up.
Mr Day, it might have escaped your notice 'yeah but, no but' is my comedy routine. You haven't said 'yeah but no but' but I am concerned that your skit is a far too artisticly similar to be called original.
Adam - to answer your smilie
Nope
Not read it - not read your thread, your comments or any of the other articles
This is more tedious than watching paint dry - move on
Thanks Hound...Don't know who you are, but thanks.
It's nice to have at least one person on my side. Even if you are a high street agent ;-)
I said we have 'agreed 800 sales' since the start of the year. That is fact. Many of those sales haven't yet completed. Completions are clearly different to sales agreed and happen around 2-3 months after the sale was agreed.
And I still didn't say anywhere that our average fee was £1000 - that is incorrect and perhaps an assumption made by you based on figures I was giving you perhaps...(Our average fee is much lower than that, clearly!)
I'll say it again: The average price of a property that WE (WE, no one else, WE) sell, across the whole country, is £225k.
We all know that the Halifax/Nationwide stats (which I assume you are referring too when you say £170k) are completely out of sync when you look at the Office for National Statistics data, for example, who report an average house price of £242k. Therefore, none of this data can be used in my opinion because it is so wildly different.
And this is why we use OUR average sales figures and no one else's.
Once again, feel free to report our figures to The ASA if you want too test this...
here's the thread
http://www.estateagenttoday.co.uk/news_features/Online-agent-Hatched-throws-down-the-gauntlet-over-VAT
@ If I could be bothered I would look it up copy and paste your comments
read what the man says before posting, 'lest you end up looking like a prat yourself,
Adam very clearly states 'The average price of a house WE sell is around £225k, not £170k'
Note the emphasis on 'WE'
Last week you quoted 800 completions since the start of the year, you then went on to brag how you average fee is bolstered by sale boards etc. The figures and averages I am quoting back at you came from your keyboard last week.
It is all well and good bragging and boasting one thing but at least have the honesty to be consistent.
You can't just pick and chose which averages suit your case, covering the whole country is a fair claim but then you can't claim the average price of a property is £225.000 when it is widespread acknowledged to be under £170,000.
Where did I say that we had completed on 350 in January? That would mean we were selling 4,200 a year. We are nowhere near that. Yet.
Where have I said that our average fee is £1000?
The average price of a house WE sell is around £225k, not £170k
The average estate agency fee is 1.6%+VAT (according to The OFT report 2010), which makes 1.92% inc VAT, not 1.8% inc VAT.
I don't think people can do their sums on here.
Feel free to complain to The ASA if you like!
All the time main portals allow budget agents on its allowing Joe Public to display their homes for low cost. Agents could work together and reduced portal costs or agents could start walking in protest away from portals that allow this.
If agents collaborate and sub introduce buyers and tenants, then fees could be maintained uor increased as one agents sellers could be passed over B2B to another agents properties. Thus saving portal costs and see agents paying agents.
Buyers after all normally come from selling to be able to buy what theyve found on a portal (that another agents listed there)
Also theres the argument that if 2-3 agents introduce more buyers to the table, then maybe hatched have cost their clients £ms, as alike auction. The morte in the room, the better the price can be.
With only online, hatched are missing marketing avenues that other agents have, thus can an agent relying mainly on a couple of portals really get vendors a best price.
best you re read what you said last week about the number of completions either you completed on 350 properties in January or last week you exaggerated by 350 the number of completions since the beginning of the year.
In respect of the savings again best you revist the stuff you said last week. With the average house price about £170,000 and average commission at 1.8% inclucing vat and your average commision is over £1000 as you claimed last week how is £3060 less £1000 an average saving of £3700?
If you are going to make things up at least remember what you made up last week
Whoops, cross posted, sorry Adam :)
@Quagmire
Made it up on the spot - you obviously like it. Thank you :-)
@Not Interested
Someone asked me to comment. I commented.
Bet you still read it... ;-)
lol. How long has that little speech been sitting on your desktop?
At least now I know why you where swerving comments about your misleading fees.
What was it you was trying to do? Transparency in estate agency?
Bravo!
All smacks of sour grapes, worth reminding folks that Adam Day used to work for Country Properties.
Does wonders for the reputation of the industry to see infighting amongst agents!
Still, even though he lost the judgement, I expect Adam is laughing his head off that he's got everyone so rattled, after all, if you believe what you read on here, online agents are no threat to the conventional model at all!
Adam
If you think anybody can be bothered to read your ramble I think you are wrong
Grow up
@Marketeer
I can absolutely guarantee that The ASA did not mention anything to us about the VAT.
@Quagmire
Red rag springs to mind ;-). My comments/thoughts:
We've had this rumbling on since January/February now - I can't quite recall to be honest. The new fee saving we have worked out is still 'around £3,700', so they have hardly won...
And because this has been rumbling on for so many months, the savings our customers have made since we started now stand at well over £7m anyway, based on £3,700 - we've completed on over 450 properties since the end of February!
I think one of the fundamental things that Country Properties (my old employers by the way - I wonder why they are complaining about us, and not any of the other online agents?), said in their complaint, was the fact they tried to argue that we couldn't use a national average estate agency fee, because we WEREN'T a national estate agency.
The ASA have clearly stated that they do consider us a 'National' Estate Agency (if you read the complete ruling).
So, it amuses me that Country Properties said in their initial complaint about the 'complete estate agency service' something along the lines of - that because we WERE national agency, we couldn't offer a 'local service', and therefore couldn't offer a 'complete estate agency service'
So, in one complaint they said we WERE national. And in the next, they said we WEREN'T national. It seems to me that they use 'whatever fits' when they make a complaint.
No doubt there will be another one on the horizon about the £7m claim. But I have it all documented, I have all my figures, I have my lawyers in place, and we're ready to go again if necessary.
For the record, Country Properties taught me everything I know, and I am indebted to them for learning such a lot at such a great estate agency - they were a great company to work for and they did estate agency the 'right way'. But times change, people move on, industry moves on.
Unfortunately for an agent like Country Properties, I think it does show a slight lack of class and even shows perhaps a bit of desperation to try and demean a perfectly legitimate estate agency, such as ours. I think it also shows how far behind high street agents, like Country Properties, are, if the only way they can compete is by complaining to The ASA.
Our website is better, our advertising is better, our systems are more streamlined, our efficiency is greater, we have access to the same buyers, we don't spend as much on marketing and our fees are 80% lower.
We actually have more properties on our books for sale than the entire 22 office network of Country Properties. They have been going for 30+ years, have somewhere approaching 100 staff throughout their network and spend a fortune on advertising in the newspaper, etc.
We have 17 staff, 6 offices, been going for 7 years and barely advertise, yet we have 25% more stock than them (granted, they are across the whole country, but still a few hundred more).
Maybe that's why there are some sour grapes? Maybe it's because I (and a few of my colleagues) used to work there, and we are now a BIGGER estate agent than Country Properties in the space of just 7 years?
But who knows? I'm happy with the way we run our business, and would never dream of complaining to The ASA about another agent or their marketing - I would go out and win on merit, service and fees, which is exactly what we are doing.
Now I don't like to see that. Mr Day?
Care to comment?
More free promotion/advertising for Hatched. Getting themselves noticed and estate agents are helping! Foot, in the, themselves, shot!
So as mentioned last week the previous story on this company came about because they had come to the attention of the ASA.
No doubt because of this investiagtion/complaint the ASA reminded them of their obligation to advertise VAT inclusive prices on their website.
Poor stuff Rosalind.
Someone at Country Homes has lost some instructions to Hatched then! Cry baby, get a life!