CEILA Gets its Claws Out Early
It’s not been in existence for all that long – actually just one week – but already CIELA is making waves with one of the UK biggest online property agents.
The Charter for Independent Estate and Letting Agents – which currently has 12 regional officers and doesn’t launch officially until October this year – is demanding that Purplebricks change the wording in its current TV adverting campaign because they say it is “misleading to consumers.”
In a lengthy letter addressed to Purplebricks management at their West Midlands head office, CEILA demanded the hybrid agency stop comparing their fee structure with traditional High Street estate agents. Purplebricks does this in order to point out to potential vendors the financial benefits of using them over traditional agencies.
Purplebricks to launch in the US
Meanwhile Purplebricks, which claimed to have 4000 properties marketing on its site at one point last year, spends more on TV advertising than any other estate agency – whether online or traditional. In fact, so successful is their strategy in the UK and Australian, they say, that they intend to launch a similar American operation later this year.
The Purplebricks business model involves online marketing with local representation where agents meet vendors in person at their own home, undertake a valuation and assist the home owner with the sale. The TV adverts say they offer a “simple fixed fee” for selling a home rather than “a complicated fee structure.”
CEILA – which is an umbrella group for independent estate agents run by the CEO of the software company Easymatch – argues that the Purplebricks adverts go against current consumer protection legislation – although they admitted there was nothing factually inaccurate in the adverts.
CEILA then went on to threaten the three-year-old Purplebricks by insisting it would report them to the Advertising Standards Authority for scrutiny unless “reasonable steps” were taken in order to address the issue.
For their part Purplebricks reported that they did not intend to reply to the letter.
Four estate agents hauled up by CMA
Earlier this month four estate agents in Somerset were fined a total of £370,000 by the Competition and Markets Authority (CMA) for price fixing. A fifth escaped a fine by being the first to confess to investigators about the practice.
The announcement followed a year-long investigation by the Authority in the small holiday town of Burnham-on-Sea. It found that all four had committed “gross misconduct” by agreeing to a minimum commission rate of 1.5 per cent per residential property sale.
They were fined as follows: Greenslade Taylor Hunt (£186,054), Gary Berryman Estate Agents (£97,807), West Coast Property Services (£58,273) and Abbott & Frost (£30,099).
This was the second case of price fixing to have been investigated by the CMA. They have already recouped more than £1 million in fines from estate agents because of the practice.
Its senior director Stephen Blake said it would continue to take action in the event estate agents are found to have broken the law.”
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Blog by Avrillo.
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