An advert on London tubes about a savings claim made by an online agent led to a complaint to the advertising watchdog.
The advert for HouseSimple said: “Save £15,665 versus average Foxtons fee of 2.4%.”
The complainant told the Advertising Standards Authority that they challenged whether the advert was misleading because it did not make clear the basis of the savings claim.
Today, it is revealed that the complaint has been informally resolved.
A spokesperson for the Advertising Standards Authority said: “We approached HouseSimple with the concerns that had been raised.
“It agreed to amend the ad to make clear that the savings claim is based on selling a property at their current average London asking price.
“On that basis we considered the matter had been resolved and closed the case.”
Invited to comment, HouseSimple said:”The complaint was relating to clarifying on an advert we are running on London tubes and how we came to the savings figure of £15,665 versus average Foxtons Fee of 2.4%.”
HouseSimple said that its own average London property is worth £561,373, and its average vendor fee is £502.80. Foxtons would have charged £16,167.51p for a property the same value, based on a fee of 2.4% plus VAT.
HouseSimple said that if it had used Foxtons’ current average property value which is £885,553 the potential savings to their clients if they had used HouseSimple would have been £25,001. S.
HouseSimple said that sums done using Rightmove’s average listed asking price for a London property, of £615,115, would make the potential savings to the average Londoner £17,213.
The spokesperson said: “However you look at it, an average vendor would save £15K+ if using HouseSimple versus Foxtons. We feel this is something people need to understand and think very carefully about. When one realises that you’re effectively throwing away an amount of money large enough to buy a very good car, you might just think again.”
Alex Gosling, who heads up HouseSimple, added that a similar advert had been banned by the London Evening Standard because it mentioned Foxtons.
Gosling said: “The Evening Standard disallowed a similar advert due to the fact Foxtons are a long standing advertiser with them. Whilst this may seem anti-competitive to some, we understood the position the Evening Standard were in and so agreed to suggested amendments without taking further action. Interestingly when the advert was amended and subsequently published, guess who had an advert on the next door page to HouseSimple…Foxtons!
Carphone Warehouse founder Sir Charles Dunstone invested £5m into HouseSimple earlier this year.
He and his business partner Roger Taylor plan to inject more money at a later stage.
HouseSimple this month hired creative agency Wordley Production to produce its first TV advertising campaign.
Comments (16)
How are properties valued? Market has 3 monthly cycles, agents are on the ground, feel the pulse. Land registry is usually 3 months behind. Online portals show asking prices not paid. Save 15k and under sell? Is it really a saving?
The idea of an inherent value to a property is ludicrous other than the value an owner can borrow against as determined by their lender. A price of a house however is something completely different and will always be decided by the buyer and the vendor and not any intermediary. The intermediary is responsible for bringing the two together and even negotiating on their client’s behalf but the price a house sells for will always depend on the buyer. It is the intermediary’s role to maximise the price a buyer will pay but that is all they can do. A house only has value to the owner and to the rest of the world it has a price.
Every property has an inherent utility value based on its size and location. The supply demand valuation of any given property is reliant on the agent having a register of applicants with which they assess demand and advise accordingly.
It is not an agents job to maximise the price paid, it is an agent’ job to know it set it and achieve either that price or a lower figure which might time/ purchase advantage their client. Right now in some parts of the country advising a client to secure an exchange of contracts 10% below apparent value might be very sound, professional advice; the net gain to the client might be 30% instead of 40% but waiting 2 or 3 weeks more might see 40% became 15 or 20%
Latest statistics show that 1/3 of all properties see a price drop. This means that in the absolute minimum of cases estate agents were wrong on the price 33% of the time. If they over value to such an extent that the vendor is forced to adjust their price 33% of the time it hardly bodes well for their performance in the other 66% of cases does it?
Also if you could explain how the maximum possible price is different to what you took six lines to explain? There are obviously various factors that affect what that maximum price is but it is still the maximum price achievable.
I am more than happy to agree that there are many agents out there who do provide valuable advice regarding valuations but realistically when the industry is wrong (a minimum of) 1/3 of the time it doesn’t fill us consumers (and especially customers I imagine) with much confidence.
The point about having a register of applicants is also a little tenuous for me. Any agent can use rightmove to discover how many people have, for example, searched for a two bed in Hackney between 450,000 and 500,000 in the last seven days and compare that (if they are smart) to their records over the previous six months – this is a far more robust statistic than anecdotal evidence from any registered applicants. With the obvious caveat of “past performance etc etc” that applies to both methods.
I apologise if it appears I am just trying to downcry estate agents but actually I am just really interested in how it works and where the average estate agent sees the value that they add that is so important for their survival. Personally, I am yet to be convinced that the average agent provides this value. You of course I do not consider as an average agent!
Thank you for the compliment but I’m not an agent these days I retired from active duty in 1994 to concentrate on delivering technology to Agents, putting the skills I have as an agent to very good effect in the systems agents use. I am current building new technology and which, although only on beta/ UX testing stage, simply wallops the incumbent technology to the point where I have delivered a small independant agent a No1 spot natural Google search above all of the other portals. ( I wasn’t happy with #5 Peebee)
Find a way of contacting me and I will show you how and why good agents do provide value to their clients well beyond their fees and why every penny invested into COAR agency is a waste.
COAR=central office area rep agency
Indeed. Is anyone able to show viability in this business model? I presume not. So called ‘high fees’ are in fact ‘realistic and workable charges’ as opposed to cheap and unviable fees aligned to a business model not yet accepted by the general public.
I wonder what offers Foxtons get compared to HouseSimpletons on say a property priced at £885k, I expect instructed cheap online parasite agents leaves you with less in your pocket after completion, a much longer sale and much more stress. #bucketshopestateagents
😉 indeed Robert…. suited & booted!
Dear HouseSimple….. I’m designing a New Ad Campaign as follows….
Your Brand and a Bucket of Dung! with the caption
“HouseSimple…. simply useless when to comes to selling homes….. but marvellous for the Roses in your garden!” …..I think that clearly defines your business from real estate agency!
Gosling, Duckling?….. Quack, Quack!
Relaxed, rested, ready to go!
It fascinates me why investment and then further investment is needed for firms such as this, if the idea is so sound and profitable why aren’t they organically viable? Eight years is a heck of a time to be going at it especially considering a Deloitte fast 50 for company growth is measured over 5 years.
It is hardly a comfort or reassurance that the press coverage is strained vexatious PR or negative connected stuff like this. Surely in 8 years there is some success or something positive to report other than who else has thrown money at the project.
Exactly!
”He and his business partner Roger Taylor plan to inject more money at a later stage.”
Why?
It is the reassurance of high profile investors being seen to pump cash into the business to give confidence to what one online CEO described as “sheep investors”
There seems to be a basic business naivety of not asking why after 8 years isn’t the blessed thing supporting itself yet, why aren’t ambitious expansion plans subject to traditional funding routes based on trading history?
I have come to the conclusion that a triage nurse presented with two patients; COAR agent and traditional agency (with and without offices) one would be sent home with a bit of a pep talk the other would be immediately be placed on a cash drip to keep it alive.
Skipping over the point that Foxtons don’t charge if no sale is made, and that their are more that simply 2 choices in London as far as agents to select, not just Foxtons and Housesimple… I’ll leave those arguments alone.. My contribution to this thread is that Foxtons, who know many local buyers, provide them with mortgage advice, are trained in spotting buying signals and the market conditions locally, are in a much better position to negotiate on behalf on the Vendor than a lone vendor or a distant online agent… and on a house worth over £500,000 could probably use their skill and experience to talk the buyers up that £15k meaning Foxtons effectively work for free. (or even effectively pay the vendor) PS. I don’t work for Foxtons and never have.
I would welcome anyone else’s views on this
Yeah, that’ll teach them.
A good reason for all agents to not buy another Carphone Warehouse mobile. Im sure there’s cheaper out there, with big savings to be made.