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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
Not all mortgage brokers are equal. For example, mortgage brokers Mortgage Advice Bureau search 100+ lenders to find the right deal for you but some brokers can only access mortgages from a limited panel of lenders.
Also, some mortgage brokers charge fees for their services while others are fee-free. Some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. However, you can get fee-free advice from the expert advisers at Mortgage Advice Bureau by using this site, this form or phone number.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
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
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 the award-winning expert advisers at Mortgage Advice Bureau.
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.’
“First-time buyers can be more susceptible to conditional selling as it is their first time going through the buying process. But don’t be intimidated.
“Go in prepared: have your mortgage agreement in principle, your conveyancer’s details, and even your independent broker’s details ready when you make an offer.
“If the agent insists you meet their adviser, you may have to play along – but make it clear who you intend to use, and don’t reveal your full financial position, as this can weaken your negotiating hand.”
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….
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
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. Here are some ways to help you push back:
Before you start house-hunting, get a mortgage agreement in principle. The easiest way to get one is by speaking to the expert advisers at Mortgage Advice Bureau. 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.
If this doesn’t work, ask your mortgage broker for help. They should be experienced in these matters and will hopefully make the estate agent’s mortgage adviser back off.
Make it clear that you know the law and your rights. The Estate Agents Act 1979, states agents “must not discriminate against potential buyers because they don’t want, or might refuse, to take services from you or a connected person.”
Many agents are also obliged to follow The Property Ombudsman guidance: “Be aware that you are under no obligation to use any associated services offered by 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. However, this will put your purchase at risk as it’s extremely likely they’ll not want to further engage with you. See our guide for full details on Estate agents’ legal obligations to buyers.
If you feel pressured to use specific services, document all communications with the estate agent including saving emails, texts, and make notes of conversations.
You might think playing along might help you bag your dream house but think twice before doing this.
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
While you don’t need a mortgage broker to buy a house, they can save you time and stress and do the hard work of finding the right mortgage for you. They can be particularly helpful if your circumstances are less straight forward, such as if you are self-employed or haven’t been with your employer for long. Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Going to a lender means you’re restricting yourself to one particular lender and the products they offer. Whereas going to a mortgage broker such as Mortgage Advice Bureau, which has access to deals available from over 100 lenders, means you may get access to a much wider range of deals, potentially at better rates too. Mortgage Advice Bureau search over 100 lenders so you don’t have to.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
HomeOwners Alliance Ltd is an Introducer Appointed Representative of Mortgage Advice Bureau (Derby) Limited which is authorised and regulated by the Financial Conduct Authority.
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).
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