Two complaints have been upheld against the online agent Express Estate Agency by the advertising watchdog.
It is the second time that the business, which is promoted by Sir Ian Botham, has been in trouble with the Advertising Standards Authority for its use of Offers In Excess Of (OIEO).
The ruling makes it plain that an OIEO price used to advertise a property must be in line with the seller’s “bottom line” – the lowest price the vendor would accept.
In December 2011, four complaints were upheld against Express Estate Agency. The complainants all said that that advertised prices were misleading as much more was actually being asked.
Today’s new ruling again deals with four complaints, all related to properties advertised as inviting OIEO.
Property A was for sale at offers in excess of £335,000. Express said the property was priced to encourage a quick sale, adding: “The market appraisal of this property has indicated a value in excess of our marketing price … the vendor is aiming to achieve as much as possible in excess of this marketing price.”
Property B, a semi listed on Rightmove, invited offers in excess of £125,000 and had the same text at Property A.
Property C, on Express’s own website, invited offers in excess of £220,000 and had the same text.
Property D, on Zoopla, invited offers over £90,000 and carried the same text. Zoopla also gave its listing history, which showed it had been reduced from £100,000 to £95,000 and then to £90,000.
As in the case two years ago, the complainants challenged whether the prices in the adverts were misleading, as the vendors would only consider prices that were much higher.
Express told the ASA that the use of OIEO was widely used by estate agents. They created interest in a property. There was no hard and fast rule as to how far above the OIEO price the vendor would expect. On average, Express achieved a price 4% above the seller’s bottom line.
The OIEO price was discussed with the vendor before the property was marketed, and “the property would then be marketed at an OIEO price which was slightly below the vendor’s bottom line”, Express told the advertising body.
Express said in each case of the four properties complained about, the vendors had increased their bottom line without telling the agents.
Property A, for sale at an OIEO of £335,000, went for £356,000 after a series of OIEO reductions discussed with the vendor who had rejected the complainant’s offer. The complainant said that the vendor had made it clear they wanted £350,000.
Property B, on the market for an OIEO of £135,000 was withdrawn from the market by the agents, because they felt the vendor’s expectations were unrealistic.
It was a similar story with Property C, advertised at OIEO £220,000 when the vendor increased his bottom line to £240,000.
Property D first came to the market at an OIEO price of £100,000 and had a vendor’s bottom line of £105,000. Both sets of prices were reduced by £10,000 each. The property finally went for £95,000.
In its ruling, the ASA upheld the complaints in relation to properties B and D.
The ASA said that consumers might not be familiar with OIEO pricing, and would understand the stated price to be the minimum that the vendor would accept.
It also noted that the agent generally recorded the vendor’s bottom line as being in a range of £5,000 to £10,000.
The ASA said it was acceptable to set the OIEO at or above the lowest price that a vendor would accept.
The ASA said that the vendors’ bottom lines with properties A and C were in line with OIEO prices but not in properties B and D. It said these were therefore likely to mislead.
The ASA has told Express to ensure that “Offers In Excess Of” or “Offers Over” prices in their adverts must correspond with the lowest price in the vendor’s bottom line range.
In response to today’s ruling, Express said that in the two cases upheld, the price achieved in Property B was within a 4% margin, and in case D, the vendor accepted an offer that matched the OIEO value.
Chris Brogan, Express Estate Agency managing director, said: “We thank the ASA for its new guidance on Offers In Excess Of marketing prices,.
“Despite being long overdue it is welcome clarification to the industry as a whole.
“We strongly disagree that we were in any way misleading, and would never wish to mislead any consumers. Nevertheless we do of course take our regulatory obligations very seriously and so welcome this clarification towards a more stringent stance and the interpretation now taken by the ASA.
“Despite recent verbal acceptance of our commercial approach by our local Trading Standards Office we anticipated this new ASA stance, and so transformed our business away from OIEO marketing prices from late September onwards. This resulted in a new record sales month of 427 agreed sales in the month of October.
“We thank the ASA for helping us to continue to serve our sellers in the very best and most proactive manner possible, and will continue to be by far the largest and most successful online estate agency in the UK.”
On the site, Sir Ian Botham says: "I believe Express Estate Agency's market-leading solution is the best way to sell any property in the UK."
Comments
I'm certainly no fan of Express, (they've taken numerous properties off us through sheer good timing, a tremendously annoying mailing campaign, and gone on to sell them by being quite persuasive...), but I do feel that we should all sit up and take note of the ASA's new hard-line front - we've all used OIEO at a little below like this if we are honest, and none of us will have felt much wrong with it - sad really, because it kind of defeats the object of OIEO if we must all be at the minimum level a seller is willing to accept, and once buyers realise this they won't be often willing to offer any more unless there is competition. Feel like this approach now has even less to offer, and it has been quite a good one over the last few years.
As for 'local' this that and the other - yeah, it has it's place plus benefits (and this is what I am) but EAs like this bunch are showing that they aren't really necessary like they used to be. As your earlier poster mentions - more an industry now rather that a profession, sadly.
Asking prices do matter as well I'm afraid - someone high up in Zoopla recently told me that the OFT (as it has previously stated) is now looking to make examples of EAs who are over-valuing to win business in... and we all know that this is very common-place.
Ah well, glad it was this bunch who have been made the example of in the industry, but guess we all need to be alive to changing times.
Ol' Macdonald had a farm, EIEIO ( Extra Interest, Excessive Idiotic Offers)
Hey Shitemove... you need to get on the case here. Right up your Street.
http://goo.gl/n5VlXS
Copy and paste the above into your address bar.
Well indeed they will be prosecuting lots of agents as the use of OIEO is widespread throughout the industry!
Personally I think whatever price is shown it is no more than guide whatever letters are put after it. However, POA really irritates me!
@maxy ? I assume you mean that if the person making the offer is proven cash in the bank, nothing to sell, appears to be of sound mind and there have been no other offers after several days/week of marketing .... how can you make assumptions re dealing in high value products ?
Billy B is right, its simply an 'invitation to treat'.
My standard is 'Guide Price £nnn' which, if people ask for an explanation, means ... talk to us. Some vendors don't want any offers so I may drop the word 'Guide' but I advise that this is a harsh way to market, buyers prefer 'Guide'. I sell about 50% of homes at guide (where the client has agreed to my suggestion), about 10% above guide and about 40% a bit below. Roughly.
In my case, OIEO is usually suggested for an off-beat property in conjunction with a system I use for Open House ... a lot like an auction guide.
In my own opinion ASA have been a bit too strict on EA based on teh available facts ... but perhaps there had been many more complaints about them, who knows.
So should any agent that sells above asking price be similarly reprimanded? Or for less than? Surely if anything sells for a penny more or less than its advertised for then this is misleading either way regardless of whether it is marketing as oieo or otherwise. Property brings out the best and worst in people, and often people don't like things not going t b eir way.
Normally if you offer just above the oieo price its yours, isn't it?
So should all OIEO advertisments be banned?
Many agents have adverts with OIEO, If I make a an offer above or below and it is not accepted should i make a complaint to the ASA?
Trevor, you would probably be wrong with your guess.
One of the comments on your link does raise a good point that if the mortgage lender gets wind that you are paying over the asking price that they are likely to get wobbly.
I have no connection with Express Agency nor do I much go along with them, but this is a storm in a teacup. A vendor is not bound to accept an offer until contracts exchange. Vendors do change their minds about accepting an offer all too often.
I was once offered £80k over guide ... rejec ted as the buyer was not proceedable, not even on the market.
It is surely the agents job to get offers in front of a client, to consider. How often will a vendor say they will never take leas than X and a buyer say they will never pay more than Y, yet a sale goes through at a figure which after all both parties have moved to accept?
A company calling itself Express Agency does ring our office all too often, pretending they are doing comps for surveyors and wanting to get the house name or number of a property on our books. What they are really after is address & price data for a qualified mailing list which they can then use themselves or sell on. Despite us getting increasingly angry at this scam, and even telling them to F... Off, they still pursue this infuriating game. Perhaps it is a differnt Express Agency but if its the same one then they deserve all they get in my book!
I think we all know who billy b works for
here's some more info
http://forums.moneysavingexpert.com/showthread.php?t=3937725
Shitemove...
it doesn't matter what the agent valued it at ... glad you said that and not me. So your local expertise and property market hat has fallen off then.
Again to use your argument if your client wants £225k how dare you ask £250k. It never says ono.
billy b - you may be missing my point
it doesn't matter what the agent valued it at
if the price says oieo 200k and secretly the owner said he will only consider 225 min
it should not be allowed to be advertised at oieo 200
an auction is different as I know auction prices are what the auctioneer thinks they may achieve
Shitemove... if I drove 100 miles to view a property that an agent had "valued" at £225k and when I got there I found he had over egged it and it was worth less than £200k I too would be pretty hacked off. To use your argument.
I am glad my complaint has been dealt with, this is 'PRICE BAITING'.
As I explained to the ASA if a price says OIEO £200,000 and I drive 100 miles to view it and offer £201,000 and the vendor says no straight away even though there are no offers in I would be pretty pissed off.
If the vendor tells 'express' their absolute bottom line is £225,000 but 'express' says they will get more viewing and offers if the price is set at OIEO £200,000 and I waste time and fuel this is illegal.
This is very similar to quoting guide prices at auction. It used to be common practice to quote a guide price way below the undisclosed reserve to create interest in a property and to pack the auction room which wasted a lot of people's time. That was outlawed by Trading Standards some years ago. Dealing with abuse of "offer in excess of" prices is simply an extension of this ruling.
Of the examples given above property A is the best example of how they are playing it.
A lot of the time they put OIEO an amount that is generally a LOT less than what the vendor is looking to accept, I offered on 2 properties with them previously, both of which were looking to achieve 10k + about what it was being advertised at!
OIEO as stated above "it was acceptable to set the OIEO at or above the lowest price that a vendor would accept"
To expect people to pay 10k + above an OIEO price is ridiculous and basically wastes time for vendor and purchaser alike as purchasers would not be looking in a certain price range if they could afford to pay 10k + over that price!
So if they get their knuckles rapped for listing at a price less than the eventual selling price Wtf should happen to agents who over value ?
Express have done a good job for their client... the vendor. Max interest quickly and a good sale price.
Bet those who "complained" were rival agents.
Great spin Express, from being done, to trying to make out all fine now and selling even more! Upheld? What punishment?
Why doesn't anyone challenge the auction houses? Surely its far worse putting a guide price of £250,000, entice people to undertake due dil, when actually the reserve has been set at a higher price and the bidder who offers £250,000 in the room has been mislead when the auctioneer announces that the reserve hasn't been met.
The clue is in the title "OFFERS" in "EXCESS" of.
It is an "Invitation to treat" , not the basis of a contract. It could not be more honest.
Auction houses use a similar tactic.