The unlawful practice of conditional selling by estate agents is getting worse and harming customers, according to a new survey.
Conditional selling, as most of you will know, is when an estate agent tells a prospective buyer that they must use the agent’s in-house broker in order for their offer to be put forward on a property.
Nearly two thirds (63%) of Access Financial Services mortgage advisers surveyed said that their clients have experienced conditional selling in the six months from November 2023 to May 2024. Of that group, 100% of advisers said it caused their client harm such as stress, hassle or confusion.
A third (33%) of advisers surveyed believe that conditional selling has got worse in the past six months until May. The same proportion (33%) think the problem is about the same. 30% don’t know, and 4% think it’s getting better.
Perhaps most concerning for the property industry, is that more than four out of five (83%) of mortgage advisers feel like there are some estate agencies where conditional selling is almost standard practice.
Karl Wilkinson, CEO of Access Financial Services, said: “Something is broken in the property industry when this practice continues after 20 months of our campaigning against conditional selling, and developing tools and processes to protect advisers and their clients.
“A significant minority of estate agents are being allowed to continue to negatively impact our industry. This has to stop.”
Wilkinson continued: “Conditional selling is morally wrong and a clear breach of Consumer Duty as well as The Property Ombudsman’s Code of Practice and the Estate Agents Act 1979. What other industry puts up with this kind of harmful behaviour? We can do better.”
To help counter conditional selling, Access Financial Services has created two free letter templates for financial advisers and their clients – one to estate agents making them aware of the situation and, failing a positive response, a second letter to request support from the property ombudsman.
When asked to describe experiences of conditional selling in the past six months, advisers referenced customers who were denied the opportunity to purchase a property because they refused to choose the agent’s broker.
Another adviser referred to a series of first-time buyers, all of whom felt pressured into using the agent’s inhouse adviser.
While very worried about losing the house they wanted to buy, one adviser’s client also felt annoyed that they were forced to use a service they didn’t want. They didn’t understand why they had to use a mortgage adviser that they didn’t know and trust. Another adviser said one of his clients expressed confusion as to why they were being denied the fundamental right of free choice when it came to buying their home.
Top tip always deliver an offer at the vendors property 2 days after if you haven’t received confirmation of acceptance from the agent, just in case they are selling to their mates or someone who’s having a mortgage especially if your a genuine cash purchaser.
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Top tw#t
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Sadly as over 40 years in the business-l have seen all the lies peddled, are you one of those on minimum wage scrapping to pay your bedsit rent.
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Top tip. Don’t do that. Sellers instruct an agent, that they trust to handle the sale of their property for a reason. Because they don’t want to / know that they are not equipped to deal directly & effectively with potential buyers themselves. Also, this kind of behaviour, if discovered will certainly not put you in good favour with the agent! This kind of poor ‘advice’, only causes further turbulence and leads to buyers believing that they can simply do as they please..
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It’s happened to me, the agent said I was a messer so I turned up with a bank statement at the vendors house with an original bank statement, sadly a lot of agents are not honest.
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Appreciate that, however sadly a lot of buyers are not honest either.. Potential buyers seem to often not consider the fact that an agents agenda is to act in the best interest of their client, the seller, irrespective of whether that is to their liking. Unfortunately we’re finding a growing occurrence of potential buyers with a sense of entitlement feeling aggrieved because they haven’t got what they wanted.
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I would wager that these so called statistics are a gross exaggeration to suit a narrative. Good Estate agents will insist on proper verification by their in-house services – I often have situations where clients require this before viewing let alone at the point of making an offer – but I don’t believe that there’s any undue pressure to arrange the mortgage in the vast majority of cases. They might offer their services but that’s what happens in competitive markets. The only instances I hear of regarding ‘conditional selling’ are with new homes developers.
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Agreed as a developer I will never accept any offer unless it has been verified by my agents own ifa
Equally ifI have 2 offers and one is not using the agents ifa I will accept the one that is
Common sense
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There’s a gossamer-thin line between conditional selling and getting first dibs on an opportunity to sell services to prospective purchasers.
Right now, I’m building functionality that maximizes opportunities for an instructed agent’s trusted financial advisor to present their services to prospective purchasers looking at listings. This functionality acts as an antidote to predatory service providers who see agents’ listings as a chance to push their own financial services ahead of the agent’s.
I get the frustration independent financial advisors (IFAs) have. Their struggle for business is real: they’re not getting inquiries from portal listings, not receiving leads from agents, or from agents’ websites, so they’re left to fend for themselves, and that’s tough.
I understand their grievances and sympathize with them, but realistically, conditional selling by the few agents equipped to do so (less than 15%) isn’t the reason independent, not-tied IFAs have to work so hard to win the business they do.
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Worse still, is these supposedly saintly independant mortgage advisors, receiving massive commissions, from referring to appalling panel solicitors ,100’s miles away from the property.
Kills sales everytime . #clueless
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It won’t surprise you to know part of the latest project is addressing the problem with conveyancing.
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“the problem with conveyancing”?
First let’s define it
Then let’s consider possible solutions
Then let’s see if they’ll work in practice.
Estate Agents have all the data needed as to milestone dates. They also have the data on the conveyancing business involved.
It should be possible to collate information on each conveyancing business to see at what pace they work.
Thereafter it should be possible to assess what type of business model they operate in relation to use of technology and thereafter determine which business model delivers the better results.
The assumption is (some might call it propaganda) that digitisation and more intelligent technology is the answer. Is it? Real evidence would help frame the real solution.
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There is absolutely nothing wrong fundamentally with an agent requesting that a potential buyer has a conversation with their in-house advisor and this shouldn’t be mis-represented as an agent ‘forcing’ a buyer to use their services. It may a be a commitment to the seller (or a request by them) that the credentials of all offers are verified by an in-house advisor associated with the agency they chose to handle the sale of their home. I can certainly confirm that sales to buyers using in house or recommended services (mortgage advisors & solicitors), not only have a smoother transaction, lower fall through rate and shorter completion time, but in many cases, our in house advisors are able to find better deals for buyers too, they’re never unhappy about that!
Ultimately, in-house mortgage advisors are providing the same service as those that are not associated to an agent, but with a number of additional benefits! And, find me an Independent advisor that wouldn’t like to be recommended by an agent with a constant supply of potential clients?!
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Spot on. Buyers soon work out that working with an in-house specialist makes far more sense. The whole scenario is much more joined up and both buyer and seller benefit. These third party companies should quit the whining and come up with a more compelling proposition than trying to rubbish their competition with unsubstantiated allegations – very unprofessional.
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Let local trading standards keep their fines and reinvest to build their teams, all agents need a list of laws to confirm to. Trading standards give them one warning then a fine. The fines increase. Agents are randomly spot checked. This will reduce corruption and bad practices. Many agents ignore all the rules it’s disgraceful.
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Okay,
Let’s take this ‘survey’ of brokers that do not work with estate agents, accept its their experience and not be surprised they ‘feel’ this way, we will put aside that whilst they may have had a perfectly nice meeting with a potential client, given them some decent advice (the free sort) and told them to get in touch when they have found a house they want to buy and little else to make them into an actual customer and move on from there.
For balance I expect / know that if you did a ‘survey’ of brokers that were based in estate agency offices and asked them similar questions from the opposing angle they would say that their colleagues do not ask enough customers to see them, the customers they do see are not confused or suffering stress or hassle, they have never had a customer sign up for a mortgage with them through fear of not being able to buy the house and so on.
What they would say is that they see customers for a meeting to check they can afford the house, perfectly sensible etc. and quite often they ask that client if they would like to go ahead and they say yes please and go ahead all happy and at free will and at some point when they finally take the call from the previous broker they tell them they have sorted it with someone else and that broker has a bit of a moan the had a client stolen from them ignoring the fact that you cant be stolen from if the thing being stolen isn’t yours
Jonnie
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