Readers will understand that for most estate agency businesses the income from mortgage, insurance, and conveyancing referrals is often a significant proportion of firms’ revenues.
For years the level of sales commissions has been dropping. Agents have naturally turned to alternative sources of income, which have often made the difference between financial survival or going under.
Negotiators and staff can also derive significant additional earnings from rewards and incentives linked to successful referals of applicants and vendor to linked businesses.
Revenues from referral business must be disclosed to the parties involved and it is not permissible for agencies to undertake ‘conditional selling’. In such cases the agency will insist that a buyer must use certain services – conveyancing, mortgage etc – in order for an offer on a property to be put forward.
Yet despite the ban on conditional selling everyone knows that it happens on a more or less frequent basis in some firms regardless of the fact that agents must also not discriminate, or threaten to discriminate, against a buyer because that person declines to accept a related service from the agent. Staff are tasked with always pushing for referral businesses and in some firms may be penalised if they do not meet the referral targets.
Such practices, where proven, do not do the estate agency industry any favours in terms of its reputation in the eyes of the general public.
Social media this week highlighted an alleged case of such discrimination by a branch of Connells which was evidenced by this posting of a message by a would-be purchaser. It appeared that the initial offer was ‘chosen’ over others because the purchaser was using the Connells mortgage service.
Because the purchaser had then apparently changed their mind about the use of Connells mortgage service the branch told him they would have to be resubmit his offer ‘along with others’.
Reactions online included: ‘Have lost count the number of times we’ve seen this.’ ‘Shocking but not surprising.’ ‘Disgraceful behaviour.’ ‘It looks like conditional selling.’
Property commentator, Henry Pryor was particularly direct, reposting the alleged message and saying : ‘Hey Siri, show me some sharp practice!’ He later posted it again saying, ‘If true Connells has some serious explaining to do.”
This is not the first time such allegations have been made about the Connells Group. See the EYE story from last year, linked below.
EYE approached Connells Group for a statement about this week’s case. They told us:
“At Connells any complaint received is investigated with upmost priority. In this instance, the matter reached a resolution for the client within 5 hours.
“An investigation into this email is underway, and if there is an instance of pressurised selling, Connells will take full and appropriate action. Pressurised selling is neither encouraged nor acceptable.”
We are proud to be able to provide a range of services, assisting customers with all aspects of their move and providing a high standard of service.”
We had asked two specific questions of Connells Group, requesting a confirmation or denial for both:
- That Connells staff are required to insist upon an applicant speaking to their [i.e. Connells or related third party] in-house mortgage or insurance broker before an offer is put forward.
- That in the event of there being more than one offer for a property Connells staff will favour or recommend to a vendor the offer that is using the in-house mortgage or insurance services.
The questions were not directly answered but we received this response from Connells Group: “Pressurised selling is taken very seriously and it is not encouraged nor is it acceptable, this applies if one or multiple offers are received. “
Readers are reminded of the rules for posting comments. Your comment must not defame an individual or entity nor bring them into disrepute.
Agents accused of ‘breaking the law’ with ‘conditional selling’ tactics
Shock, Horror….
Are we in the industry even surprised that this company has been caught out again??
At least this time there is a screen shot of the email sent to the client from the branch Manager so its proof it does happen.
We all know it happens and nothing is every done about it apart from maybe an article on here.
If any of my clients offer through this company and they have 2 branches in my town then i let them know before they offer what to expect and often i advise them they may have to go knock on the sellers door or drop a letter to them as if you say no to speaking to their broker or using them for their mortgage, then their offer may not be put forward and guess what, most if not every time it is not put forward and i catch them out when the seller finds out they had another offer that the branches never put forward or if they did it was put forward with such a negative approach then the seller was put off by this offer.
So i have had sellers accept offers from my clients face to face and then told the branch they have spoken to the buyer directly as they went over to talk to the seller and showed them their mortgage credentials directly to the seller and on a few occasions the seller was not told of the offer.
It is shocking and even when the buyers or the sellers complain it is somehow swept under the carpet by one of the directors whose job is only to protect the branch and the individual as the director is the one beating the staff with the stick to get more mortgages for the branch in the first place and are told ‘dont worry i will sort it and get you off the hook’.
We all know how much money financial services can bring in to a company but this practice is illegal and nothing is ever done about it for this company.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The term conditional selling seems to be banded around far too broadly. I can’t see what was conditional here. All offers were presented to the vendor within 24 hours, the agent was clear that they need to go back to their vendor for instruction to confirm whether or not they were happy to proceed based on new material facts.
Inevitably as the market tightens competitors become more punchy with each other. The same 3-4 brokers come out of the woodwork every few months and they seem to have an agenda here. Seems that any attempt to sell a mortgage by an estate agent is construed as wrongdoing, Is this really about the customer or is it about them and their business?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The clear implication in the email is that, by not using Connells’ own mortgage advisor, the buyers’ position has somehow worsened and their attractiveness to the sellers diminished. She is clearly promoting fear that, by switching broker, the buyer might lose the house they want to buy.
This is a known problem, often backed up by empirical evidence and vocalised by brokers and agents alike who only seek to shine a light on underhand and illegal practise. In an industry which has long-struggled to rid itself of crooks and shake off the cliché, this can only be a good thing.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I prefer my buyers to use the sols and mortgage advisers we recommend.
We have a relationship with them and can communicate easily which is often far from the case when using a sol/mortgage advisers we do not know.
If i had offers – 1 from someone using our recommended and 1 from a buyer not using our recommended I would always opt to go with the buyers using our recommended.
The agents are NOT saying hey will not get the house – he is saying that their offer will be considered in the same light as all the offers.
We will not consider any offer on any of our developments unless the potential buyer has spoken to our IFA 1st. We make it clear that they do not have to use our IFA but it is part of the financial qualifying process.
Just last week our IFA spoke to a couple who had made an offer on one of our properties who have 3 x CCJ against them, credit card debts on over 40k and will never get a mortgage.
Last week also our recommended IFA spoke to a so called buyer who does not have leave to remain in the uk so has no chance of getting a mortgage. We could have wasted our time on 2 transactions that will never go anywhere if we had not insisted on the potential buyers speaking to our IFA.
We also offer a £500 Amazon ot John Lewis voucher for any buyer who uses or recommended sol.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Totally agree. If you had the job of an estate agent progressing a sale you would understand how important good communication is from solicitors and or brokers and the sad fact is that many don’t get it. Very easy to forget as well that agents don’t get paid until the sale completes so eliminating any possibilities of it not happening makes total sense. The problem comes if you are recommending incompetent third parties but that’s another story.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
No hope if you cannot see the flaw in your argument. This is clear ‘conditional purchasing’.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Call it what you want.
I am not taking a property off the market until I have a purchaser qualified.
I am not going to risk wasting my time with an unproceedable purchaser.
It is not conditional buyers are told clearly they are not obligated to use our sols / IFA.
They are also told if they are unable to exchange in 6 weeks we reserve the right to re-market the property.
If you do not check the bona-fides of your buyers for your vendors I feel sorry for people seeing through you.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Not sure what you are saying here, so lets clarify.
It is not the agent decision to take the property off the market. It is instructions you receive from the vendor as to when if, at all, that happens.
Not down to the agent, wasting their time. You again follow your vendors instructions, like it or lump it or walk away.
There is no conditional buyers in your scenario. Rule are very clear, agents must tell a potential ‘all purchasers’ they do not have to use their in-house or connected mortgage advisor. The buyer must always be allowed to make their own arrangements either with you or not. The vendor cannot impose that condition …. its illegal.
Agents cannot impose ‘reserve rights’ to re-market unless that is the decision of the vendor, never the agent. Someone needs to read up on TPO code of conduct for starters!
Agents are required to qualify the purchaser …… only so that the vendor can come to an informed decision to go with them or not and how any further marketing should continue. Its is not for the agent to manipulate this process to lock them in or intimidate them to using their FS. Criminal offence, as agents have found out in the past.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Am not sure anything wrong here. No one said that the buyer had to use the broker but they said they were going to and then decided not to. Decent trusted brokers can make a sale happen and yes there is an undoubted monetary value of having the in house broker on board but this specific transaction aside there surely is a trust issue when something is agreed on a certain process being followed which is then reneged on. I don’t work directly with an estate agent now but understand how they work and all too easy to bash them with sensationalism like this. Show me that the buyer was told that they would only be able to proceed with the purchase if they used the in house broker and then a different story.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Very wrong.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
You are very wrong. If someone says they are happy to do something then fundamentally changes the rules of the game after gaining a dishonest advantage ie never any intention of doing what they said they will do, not only is there a trust issue but you just don’t know what else they won’t do. I have worked with Connells and quite often they sell to people without needing a mortgage so it is often about just making sure the sale will happen rather than taking a chance to double the revenue.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Indeed, ‘very wrong’. I say this on the basis that 13 years ago I worked for this company, well a Sequence company, same thing – and exactly this was happening all those years ago. Area managers, directors were completely frank as to why we had to use these methods which, really, border on the criminal. A buyer using our mortgage services was to be recommended to the vendor over another buyer – say a cash buyer offering the same amount and wanting to complete in super quick time – on the basis that as they would be paying a survey fee they would be more invested in the purchase and would be less likely to back out. The pressure to persuade people to use the company’s sub standard preferred mortgage and conveyancing companys was immense. I’m happy to say that whilst my property sales figures were impressive, my referrall figures were ‘through the floor’ appalling and my career in corporate agency was short lived.
That’s not to say I don’t buy into the argument that buyers should use referred services – I refer all the time…. to the best companies I feel will do the job effectively.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I worked for Connells/Countrywide until last year not 13 years ago and whilst there is pressure to refer on the basis of the monetary value of the broker’s input and solicitors that does not mean that this was the case here. You did not buy into the service which now has many more lenders on its panel than Sequence’s 8. Times have moved on and as other people have pointed out, one this was not conditional and two they were referring for instructions from the solicitor. Too much of 2 plus 2 equalling 5
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Disagree, yes pressure to some degree but not proven here and the world has moved on. 35 plus lenders not the 8 you had at Sequence.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Very correct
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Connells posted a loss in the first 6 months of just under 6 million versus a profit 2022 of 29 million a year earlier-so Im not surprised the “pressure in the field “is ramping up as Connells Group needs to deliver on the CWD Aquastition.
Of course, it’s a tough first half for many Agents but thankfully things are improving and the second half certainly looks a lot brighter. Selling service on personality ability and expertise always wins in the long term. These practices need to be left back in the wild west of the 80s TBH.
HAGWA
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
This practice is as old as time! So many agents do this, in the main I saw it peddled by large corporates who are full on financial services.
Just because the customer chose to de-instruct the mortgage advisor and use another company does not warrant ‘new offer to be submitted with others’. All the agent is required to do is requalify the mortgage offer they are now submitting to the vendor as being able to still continue to proceed with the purchase. They might have found a better interest rate. So many corporates only use particular lender panels due to the high commission they earn from volume submissions.
By saying you will have to start again is bad news for the estate agent, its not your choice who buys the property. It is the vendor to decide on the facts presented, if they were ever told? I’d love to have had this one in court, feet wouldn’t touch the ground.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
2 possibly incorrect assumptions here. Firstly you assume dis-instructing when there may never have been the intention to use them. Secondly Connells have an extensive panel of lenders and there would be a rare situation that you would need to go outside these. Only flaw is their single tie on the insurance
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The facts changed so were re-presented and updated.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Just an observation, the screenshot says the offer was submitted to the solicitors.
So it’s not dealing directly with a ‘normal’ vendor and instead perhaps a corporate/legal entity, who tend to dive into the detail to ensure a strong chain. If a party changes a fundamental point of their position, be it a broker, solicitor, lender, offer amount etc then this entity would be much more likely to re-evaluate than a ‘normal’ vendor.
Like mentioned by several above, I can’t see the “conditional selling”
EYE have also protected themselves under ye ol’ faithful of “allegedly”
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Good point. I think what has been brushed over here by the author of these article and the likes of Wooden Top is that a key rationale for selecting a buyer has changed and the agent is duty bound to report to the solicitor client and take instructions. Absolutely nothing wrong here.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Had the buyer changed from one non-Connells’ broker to another non-Connells broker, would the agent have seen the need to report to the seller? I suspect not.
There is a clear implication that the sellers might change their decision based on this. It’s clearly an attempt to sway the buyer back to the Connells’ broker for fear of losing their purchase.
At the very least, it’s an aggressive sales tactic, flouting Regulation 7 of the Consumer Protection (from unfair trading) Regulations.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
No but it changes the control the agents has over the deal
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Yep. And the income they derive from it.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
No one is denying that maximising income is a factor with agents such as Connells but that may well not be the influencing matter – there could be short timescales, the solicitor has requested to be updated on everything to do with the sale you just don’t know so to assume that money is the reason here is plain wrong.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Are you really that naive Semintimus ?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I don’t like this type of mischief making journalism, it would be so easy to portray a completely different impression here without in any way twisting the facts but of course that’s not clickbait. I’m not suggesting that Connells are blameless but it’s clear to me that the journalist has an agenda because I can easily imagine a scenario from what’s been reported whereby the agent was actually doing a really good and thorough job for their client. No wonder that Eye’s engagement with its audience has fallen off a cliff under the new regime. Ros ‘s watch was always much more professional and balanced.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Spot on. Cheap journalism that relies on people coming out of the woodwork/ wooden top assuming that the worst has happened when far from clear that the case. If dealing with a solicitor in a probate case reporting of a change of situation would be expected.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Where are you getting your facts from? You are changing the narrative of the story with innuendos and speculation to your naivety. What you are claiming, is pure speculation …. do you work or connected with Connells? I think NHGURU summed it up nicely and going by the number of dislikes to your comments?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I agree.. on every point!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
It was interesting that the journalist didn’t put their name to the story.
it’s a non-story as of course the seller needs to be informed of a change in circumstance/decision from their prospective buyer.
If we all start posting about what it says on social-media, we’ll need a new site launched…and hours in the day to read it…maybe PIT…
Property Industry Tell-tailing
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register