Find your best local estate agent Start here
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.
KEY INFORMATION
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.
A knock on effect of this is that it could mean you wrongly think you can’t afford to buy a house.
Also, some mortgage brokers charge fees for their services while others like award-winning mortgage brokers L&C are fee-free.
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.
Find the right conveyancing solicitor for you – compare quotes & ratings instantly
Get instant quotes from regulated and reviewed conveyancing solicitors that cover your area. Our customers save on average £490.
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.
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.
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.
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.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
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.
Then let us know. Email us with what happened to you at hello@hoa.org.uk or tell us in the comments below….
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?
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
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:
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.
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.
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
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.
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?
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.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of LifeSearch Limited, an Appointed Representative of LifeSearch Partners Ltd, authorised and regulated by the Financial Conduct Authority. (FRN: 656479).
Independent Financial Adviser service is provided by Unbiased, who match you to a fully regulated, independent financial adviser, with no charge to you for the referral.
Bridging Loan and specialist lending service provided by Chartwell Funding Limited, registered office 5 Badminton Court, Station Road, Yate, Bristol, BS37 5HZ, authorised and regulated by the Financial Conduct Authority (FRN: 458223). Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
