Conditional Selling: Do I have to use an estate agent’s mortgage adviser?

There's many reasons why it's better choosing your own mortgage broker and conveyancer than using those recommended by the estate agent when you're buying a house. But in some cases, buyers don't get a choice as the estate agent refuses to pass on offers if buyers don't use their partner services. This is known as conditional selling. We explain what to do if it happens to you.

estate agent's mortgage adviser

KEY INFORMATION

Do I have to use an estate agent’s mortgage adviser? At a glance

  • No. You don’t have to use the estate agent mortgage adviser, recommended conveyancer or use any other in-house services. We recommend you shop around to get the best deal.
  • The suggestion your offer on a house can be held back until you have seen the estate agent’s mortgage adviser or used any other in-house service is illegal.
  • But sadly we often hear of cases where people are told by an estate agent they need to use their in-house broker to have their offer put forward or will be disadvantaged in some way if they don’t.
  • Paula Higgins, chief executive of HomeOwners Alliance, says, ‘Conditional selling has been around for years and we get regularly contacted by buyers who find themselves pressured to use in-house services or even find themselves not being allowed to view a property or make an offer.
  • At HomeOwners Alliance, we’re calling for a ban on estate agents offering services to buyers. Estate agents shouldn’t be able to make money out of the buyer and the seller in the same transaction.
  • Read on for what to do if this happens to you and jump to find out more about the campaign to end conditional selling and to have your say.

Disadvantages of using the estate agent’s mortgage adviser and solicitor

1. You might not get the best deal

For a mortgage broker to find the best mortgage deal for you, they need to be able to access as wide a range of mortgages as possible.

But not all mortgage brokers are equal.

  • For example, mortgage brokers L&C search over 80 providers to find the right deal but some brokers can only access mortgages from a limited panel of lenders. This means you might not get the best deal and end up paying more for your mortgage.

A knock on effect of this is that it could mean you wrongly think you can’t afford to buy a house.

  • For example, you may be told the best mortgage rate available for you is much higher than you could get access to by using a different mortgage broker. So always shop around.

Also, some mortgage brokers charge fees for their services while others like award-winning mortgage brokers L&C are fee-free.

Looking for the cheapest mortgage rates? Speak to fee-free brokers L&C — start the process online or speak to an advisor today.

The same goes for estate agent-recommended conveyancing solicitors.

Shop around to ensure the legal firm you choose has the expertise you need (for example experience of dealing with new builds), to check customer reviews and to ensure you get a good price.

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2. Using in-house services may work against you 

All solicitors must give you independent, impartial advice. But if your estate agent knows the conveyancing solicitor you use, they may be able to get information on what exactly is happening in your sale.

  • For example, if the person buying your house pulls out of the sale you’ll probably not want to tell the seller of the house you’re buying straight away, in the hope you can find another buyer quickly and keep the sale together.

But if you’re using the conveyancing solicitors attached to the seller’s agent keeping this information quiet could be tricky.

Compare conveyancing quotes from regulated and reviewed conveyancing solicitors that cover your area.

3. You don’t want to give too much away

No one is suggesting your need to be all cloak and dagger when it comes to your finances. Indeed, it’s important to be upfront and honest about what you can afford and what you’re willing to pay.

However, if the estate agent marketing a house for the seller (let’s remember who their paying client is!) persuades you to let their in-house mortgage adviser vet your finances, the agent will have a clear idea about what you can afford.

They may encourage the seller to push for a higher offer. Once the agent knows what you’re able to pay (rather than what you’re willing to pay), your negotiating position is completely undermined.

At the point of viewing houses a Mortgage In Principle should demonstrate you have the funds ready to draw down.

Arrange a Mortgage Agreement in Principle today with the fee-free service provided by L&C mortgage brokers

You will be asked to give further evidence of source of funds for money laundering checks, but that comes later. And it shouldn’t involve showing your bank statements to the estate agent’s mortgage adviser. Our recent guide on Estate Agents and Proof of Funds explains more.

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Will using the estate agent’s mortgage adviser get me preferential treatment?

  • It shouldn’t, but it might. We’ve heard reports of buyers being put to the front of the queue, or having their offer conveyed in the best light, or getting early viewings, all if they simply use the estate agent’s in-house services.
  • Particularly brazen agents may imply that you won’t be allowed to view certain properties or that your offer will not be passed on to the seller if you’re not willing to speak with the in-house financial adviser.
  • And in September 2023, the National Trading Standards Estate and Letting Agency Team (NTSELAT) accused some estate agents of hiding best offers from vendors if they won’t earn extra commission from the buyers. This discriminatory behaviour is illegal under The Estate Agents Act 1979.
  • In some cases estate agents try to get around the rules by adding clauses into their contracts whereby the seller will agree to refuse offers from ‘buyers which have not been financially qualified by us.’ Although, Head of the enforcement office James Munro said he thinks a judge would rule against the estate agent if a legal claim was made on this matter.

Campaign against conditional selling

At HomeOwners Alliance, we are proud to join FT Adviser’s campaign to protect buyers from estate agents’ conditional selling practices. As part of the campaign, it is calling for tougher enforcement action where conditional selling occurs, adding, ‘The 1979 Act needs teeth, and sharp ones, to end this even sharper practice.’

FT Adviser also notes that each time it has written about conditional selling, the incidents have been defended by estate agents as ‘isolated’ to individual firms. ‘But in reality, the practice appears to be endemic at large national estate agencies across the UK’.

At the HomeOwners Alliance, we fully support the campaign to end the unfair practice of conditional selling.

Paula Higgins, CEO of HomeOwners Alliance, said:

‘Our research shows that one in four buyers and sellers feel pressured into using estate agents’ in-house services – often being told they’ll lose the property if they don’t comply.

‘This isn’t just unethical, it’s a clear conflict of interest that undermines consumer choice and inflates costs.’

At HomeOwners Alliance, we believe estate agents should be banned from offering services to buyers. As it stands, an estate agent can make money from the person selling a house – and the person buying it.

But we think estate agents should work in the same way as conveyancers who can’t act on both sides of the transaction.

Paula also raised the issue of conditional selling at her appearance at the Levelling Up, Housing and Communities Committee review of the home buying and selling process.

How can the home buying and selling process be improved?

Have you been a victim of conditional selling?

Then let us know. Email us with what happened to you at hello@hoa.org.uk or tell us in the comments below….

How can I avoid having to use the estate agent’s mortgage adviser?

We’d like to say you could avoid these estate agents. But buyers can’t be choosers in this respect. If you want to buy a property, you’re stuck with dealing with the estate agent the seller has chosen.

So what can you do to avoid pressure selling happening to you?

  • Make yourself an informed home buyer and have everything in place.
  • When you make an offer on a property you usually do so over the phone, but then confirm by email, attaching your mortgage agreement in principle and details of your conveyancing solicitor.
  • These are two important pieces of information estate agents need in order to draw up the Memorandum of Sale.
  • When they see you’re on the ball and they are one step closer to securing the sale (and their fee) you’d hope they wouldn’t persist in asking you to meet their in-house service providers.

With award-winning mortgage brokers L&C, you can start the process of searching for mortgages and best buys online and speak to an adviser for fee-free expert advice

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What can I do if I feel pressured to use the estate agent’s mortgage adviser?

Unfortunately, it’s a common problem. The Financial Conduct Authority was so concerned about the way estate agents have been offering mortgage brokers to consumers that they launched an investigation. In the FCA’s 2019 Mortgage Market Study Final Report, it highlighted that nearly a quarter of buyers chose an estate agent’s mortgage adviser because it was recommended to them by an estate agent, and of those one in four felt they had to do so.

But you don’t have to. While it will be hard to resist, remember you are under no obligation to speak with an agent’s in-house or partnered mortgage broker or use the conveyancing solicitor they recommend.  You can put the estate agent in contact with your mortgage broker to help them verify your financial situation.

Here are some facts and tips to help you push back: 

1. Know your rights

Make it clear to the estate that you know the law and your rights. And the law is very clear as well. The Estate Agents Act 1979, agents “must not discriminate against potential buyers because they don’t want, or might refuse, to take services from you or a connected person.” 

This means agents must not “refuse to provide information about a property to these buyers, take longer to send property information to these buyers, compared to others or set additional requirements, as a condition of passing on an offer.”

Many agents are also obliged to follow the The Property Ombudsman guidance that states: “Be aware that you are under no obligation to use any associated services offered by the agent. You are entitled to use your own financial adviser, legal representative (unless you wish to do your own conveyancing), and surveyor if you wish a more detailed examination of the property than the lender requires. Refusal of additional services should not prejudice any offers or viewings through the agent.”

You can tell the agent that if they persist with the pressure or allude to preferential treatment for using their services, then you will report them to the National Trading Standards estate agent enforcement team via Citizen’s Advice. But the reality is that this will put your purchase at risk as it’s extremely likely they will not want to further engage with you.

See our guide for full details on Estate agents’ legal obligations to buyers.

2. Get your mortgage broker involved

Assuming you already have a mortgage in principle in place, ask your mortgage broker to email this to the estate agent and confirm that you are ready to proceed. The mortgage broker should be experienced in these matters and will hopefully make the estate agent’s mortgage adviser back off.

3. Make a formal complaint

  • Start by making a formal complaint through the estate agents complaints procedure. To do this you’ll need to get together all documents, emails, notes or recordings of the correspondence you’ve had with the agent.
  • Ask for a copy of the company’s internal complaints policy and put your complaint in writing to the branch manager. Give as much detail as possible. State what you’d like to happen now and ask for written confirmation that your complaint is being dealt with.
  • If your complaint surrounds the agent’s in house mortgage broker service copy your complaint to the Financial Conduct Authority. If it’s about conveyancing services send it to the Solicitor’s Regulation Authority (SRA), The Legal Ombudsman or the Council for Licensed Conveyancers (CLC)
  • Both the SRA and the CLC rigorously state that its members are meant to ensure that their client has chosen them to act without pressure being exerted upon them to do so.
  • If you are being pressured into choosing a solicitor as outlined above refuse firmly and advise that you will seek the advice of the SRA or CLC – this usually does the trick! Find out more about how to complain about an estate agent.

4. Contact the seller

  • If you think the estate agent is discriminating against you because you’re not using their in-house services it could be worth letting the seller know.
  • Contact them directly by putting your offer in writing through the door of the property for sale and addressing it to the seller private and confidential.
  • Sellers want to feel confident that their agent is marketing their property far and wide, not restricting the number of viewings they get. If they find the agent is not acting in their best interests they’re not likely to be happy.

5. Beware of playing along

You might be thinking, well, I’ll play along if this means I get the house of my dreams. But in doing so, be careful.

While there is no limit to how many mortgage agreements in principle you can have, if lenders run a hard credit search on you before issuing you with one you will be left with a mark on your credit file which is visible to other lenders.

In any case, we encourage everyone who has been in this position to make a report to the National Trading Standards Estate and Letting Agency team. Trading standards and the property industry recognise that this is standard practice in some estate agent offices but don’t have the evidence to enforce this law.

Have you experienced pressure from estate agents to use their services? Tell us more in the comments below

Top tips on finding an estate agent: video

How to find the best estate agent - 6 steps | HomeOwners Alliance

Frequently Asked Questions

Do you need a mortgage broker when you buy a house?

No. While it’s likely you’ll need a mortgage, you don’t need a broker to do this for you. You could shop around yourself online, use comparison websites and approach lenders, like Natwest and Nationwide, directly. But there are a number of benefits to using a mortgage broker. Independent mortgage advisers have a wide knowledge of the mortgages available from different lenders. They can search the market on your behalf and recommend the best deal, saving you time. They can also find you deals you might no find on your own, or check a deal you’ve already been given by a lender to see if they can improve on it. They can also look for mortgages for special circumstances, for example finding mortgage products for those that are self-employed or those that haven’t been with their employer for long. A broker is particularly helpful if you don’t have a large deposit. And if you can find an award winning, fee-free mortgage broker, with great reviews who will search the market for you, then that sounds like a good option too.

Mortgage broker vs bank?

What’s best? Well, going to a lender means you’re restricting yourself to one particular lender and the products they offer. Whereas going to a mortgage broker, with access to deals available from over 90 lenders, means you’ll get much more choice and should be able to secure a much better deal. It might be the deal from your bank is the best one. But why not check?

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HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.

Mortgage service provided by London & Country Mortgages (L&C), Unit 26 (2.06), Newark Works, 2 Foundry Lane, Bath BA2 3GZ, authorised and regulated by the Financial Conduct Authority (FRN: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage.

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