Phew! Property auction guide prices are not misleading, says advertising watchdog
Adjudication is over complaint following an SDL Auctions event in July in Birmingham about the way guide prices were changed prior to the hammer going down.
A complaint against leading auctioneer SDL Auctions by a member of the public to the Advertising Standards Authority (ASA) that its listed property auction guide prices were misleading has not been upheld.
In an important judgement for the property auction industry, the ASA did not agree with the complainant, who had attended an SDL auction in Birmingham on the 6th July.
The complaint in effect challenged the bedrock of the auctioneering industry – that houses often sell for much more than their guide price, and that guide prices are often changed during the run-up to auctions as vendors change their minds on their desire reserve price.
£1 properties
During the auction, at which several properties were offered with a guide price of £1, the complainant said many properties offered at the auction sold for significantly more than the guide price, and challenged whether the auction brochure’s guide prices were therefore misleading.
After examining SDL Auctions’ catalogues for the auction and other paperwork, the ASA has concluded that because the company defined the difference between a guide price and a reserve price prominently in its catalogues, and because it routinely updates properties’ guide prices during the run-up to auctions to keep the difference between guide and reserve prices within its standard 10% range, it concluded “that the guide prices were not misleading”.
“We considered that SDL Auctions’ practice of routinely updating their guide prices up to the day before the auction would ensure that consumers always had the most up-to-date information,” the ASA says.
“We noted that the email they sent to consumers a week before and the day before the auction, including a link to the Addendum, highlighting that it contained amendments to the original catalogue which drew attention to its importance to potential purchasers.
“Also, we noted that SDL ensured that the Addendum was given to potential customers as they entered the auction room and the auctioneer also announced guide price increases prior to offering the lots for sale.
“We accepted that where guide prices were changed just before the auctions, some consumers may have attended the auction to purchase a lot based on a previous guide price which had subsequently changed, but that situation was likely to be unavoidable and we considered that SDL Auctions took sufficient steps to communicate changes as clearly as possible.”
