A growing number of independent mortgage brokers have expressed concerns in recent weeks to skyrocketing conditional selling practices at certain corporate estate agencies, most notably Connells – it is claimed.
The negotiators at these agencies are accused of essentially intimating to prospective buyers that their offers to purchase a property will not be put forward for consideration to the seller unless they agree to additional in-house services offered, such as mortgage advice or legal services.
It is alleged that agents at Connells or Countrywide groups, specifically Bairstow Eves, Frank Innes and Burchell Edwards, are claiming that they must ‘financially qualify’ buyers even though ‘all the customers in question had agreements in principle’.
Eye has approached Connells for comment.
Rhys Schofield of Peak Mortgages & Protection says that he has a client prepared to go on the record about this practice and is building a case to present to the Association of Mortgage Intermediaries.
He commented: “I won’t mince my words: many agents are repeatedly breaking the law and don’t give a damn about it because clients are too scared to complain for fear of missing out on properties.
“Connells in particular crop up time and time again on the broker forums. In fact, I have been collecting evidence for a contact to take to the Association of Mortgage Intermediaries meeting next month and have an inbox of unethical and in some case illegal examples from other brokers as well from our own clients.”
Another broker, Rob Peters of Simple Fast Mortgage, goes so far as to call ‘conditional selling’ a cancer.
He said: “There is a filthy cancer in the estate agency world, which needs to be addressed. I speak not only as a mortgage adviser but also as a regulatory compliance expert, which means I’m passionate about protecting consumers, and often brought into firms to assist them with getting the right outcomes for their customers.
“The key issue is that some estate agents appear to be misleading potential buyers, and at the potential financial detriment of those selling a property. Buyers are being told their offer to purchase the property will not be put forward for consideration to the seller unless they agree to additional in-house services offered, such as mortgage advice or legal services.”
Lewis Shaw of Shaw Financial Services commented: “I’ve had numerous cases of estate agents trying to push financial services onto my customers; in the last three instances, they’ve all been part of the Connells or Countrywide groups, specifically Bairstow Eves, Frank Innes and Burchell Edwards. They’re pushing this idiotic line of ‘we have to financially qualify them’ even though all the customers in question had agreements in principle.”
Jonathan Burridge, founding adviser at We Are Money, remarked: “This has been a problem for as long as I have been advising. It is not legal to insist that a buyer uses a specific mortgage broker, solicitor or surveyor, but it can be strongly suggested that such a route would be “beneficial”. The buyer has the option to make a fuss, but that will most probably mean their interest will not be pursued and they will lose out on the potential purchase.”
Scott Taylor-Barr, financial Adviser at Carl Summers Financial Services, points out that by law estate agents cannot make it a condition of passing on offers to the seller that the buyer must use services offered by you or another party.
He said “You must not discriminate, or threaten to discriminate, against a buyer because that person declines to accept that you will (directly or indirectly) provide related services to them.”
Taylor-Barr also highlights the fact that agents must put all offers to their seller client “even if the buyer has not been financially qualified at that stage”.