Estate agents accused of breaking the law with conditional selling practices

Conditional selling practices remain a national problem among estate agents, it has been claimed.

A report in the Financial Times suggests that conditional selling by UK estate agents is actually increasing, and brokers have warned this is not ‘isolated incidents’, as individual branches have claimed when challenged.

Mortgage advisers and brokers have once again highlighted issues of conditional selling at several large chains of estate agents, particularly over the agreement in principle and a push to use in-house brokers.

According to brokers such as Lewis Shaw, of Mansfield-based Shaw Financial Services, and Jamie Lennox, director of Norfolk-based Dimora Mortgages, their clients have been threatened by various household name estate agents.

The threats are to the effect that if the clients do not use the in-house mortgage adviser to get an AIP, the vendor will not proceed with the sale.

Shaw said: “I don’t know whether it’s because the estate agencies are turning over less volume in sales a month, so they are going after additional revenue streams with such tenacity, but I’ve been seeing clients coming back to me saying they’ve been told to go in-house with the estate agencies to get the AIP.

“This is despite myself – and my fellow brokers – being qualified, regulated mortgage brokers with perfectly valid AIPs already in place.”

He said when he has raised this as complaints, he has been told this conditional selling practice was an “isolated incident”.

“But it isn’t”, he added. “If you look at any of the forums, or go on any of our mortgage broker groups on Facebook or LinkedIn, you’ll see the same estate agencies’ names popping up again and again, all over the country. Spicerhaart is one.

“Brokers are saying they’ve had clients ringing up saying that, even though they’ve already given their clients a valid AIP, the estate agency has told them the vendor will not proceed unless the AIP is done with the agency’s in-house broker.

“Sometimes they’re told that the sale will take twice as long, sometimes that the vendor will pull out. But the outcome is the same – more pressure on the client.”

He continued: “How can it be an isolated incident when I’ve been speaking with brokers in Wales and East Anglia who have all had the same experience with the same companies?”

One of those brokers is Lennox, who is based in Norfolk. He told FT Adviser he had been helping some clients secure a property near Dereham in Norfolk, and the property vendor was using a local branch which is part of a national estate agency Spicerhaart – to facilitate the sale.

Lennox said: “According to the agent, the seller needed my client to get an AIP done again from the in-house broker. The broker told my client they could not get a viewing without it.

“My client said that although the AIP we had done at Dimora was ‘good to go’, the agency delayed, so I gave my client an email to send to them and we went to Spicerhaart ourselves.

“They did eventually get a viewing of the property without the AIP from the in-house provider, and their offer has now been accepted by the vendor.

“It really did feel as if the agent was dragging their heels.”

When asked what advice is Spicerhaart giving your agents across the UK around conditional selling, a spokesperson said: “Conditional selling is unacceptable to us and we take any allegations of this nature extremely seriously.

“We have robust procedures in place to prevent this from happening. This includes mandatory training for all estate agents and mortgage brokers in the rules surrounding conditional selling.

“If we identified any issues, we would conduct a thorough investigation and would carry out retraining and take disciplinary action against anyone found flouting the rules.”

The spokesperson was also asked whether branches are incentivised to upsell or enhance the package.

They added: “Estate agency branch managers are absolutely not incentivised to drive mortgages on sales and are actively encouraged not to.

“Our internal figures show no evidence to indicate that an undue proportion of buyers are receiving their mortgages through us, in fact it is quite the opposite.

“We expect our sales people to conduct themselves in an appropriate and professional manner at all times.”

There have been several campaigns designed to help brokers manage conditional selling by estate agents, with limited success so far.



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  1. Alfie26

    Connells branches do this all the time. Staff are heavily targeted on mortgage appointments and won’t get promoted if they don’t hit them. Preferential treatment is given to buyers willing to use in house mortgage advisers.

    1. jan-byers

      When I use an agent if I have 2 offers I will go with the one where the buyers is usung the agents IFA F they are far more in control

      1. CountryLass

        And as long as both offers have been put to you in the best light, that is your choice to make. Agents telling buyers that they cannot offer without an AIP from the agents FA is not ok.

        1. NW.Landlord

          Or cannot view. Not going to get many offers unseen.

    2. psychodrama04

      The Connells/C’wide branches also get extra money allocated to their P&L for sales that go through where the in-house broker has been used for the mortgage and an additional year end bonus is also paid if a certain threshold of mortgages arranged on branch sales has been exceeded. And you wonder why there’s so much conditional selling going on?

      1. NHGURU

        I don’t understand what you mean by this psychodrama-on all mortgages ?

        1. psychodrama04

          On mortgages arranged for the purchasers who are buying a property being sold by the branch

  2. scruffy

    The scourge of referral fees and the conflict of interests that arise re-surfaces from time to time in PIE but little is done. Until our industry re-prioritises the sale of our clients properties over the sale of financial and legal services, we shall continue to see such reports.
    Acting in the client’s best interest at all times is a maxim that is alien to many agents and we can see the result. Arguably cross-selling such services has driven down agency fees through the loss leading potential that each additional client can present to an agent who has embraced this devil. If clients’ sole motive is the shallow appeal of low fees, then they’ll get what they pay for.
    If only we had a regulatory or industry representative body who recognised the damage to our reputation these issue cause.

    1. CountryLass

      Personally, I think it’s the targets surrounding it more than the referral fees. If I go somewhere and am told I will get £10 for each person I recommend the place to who books, I’ll tell lots of people how great it was (assuming it was, obviously). If however I get told that I will get £10 per person but I have to send at least 5 people per month or I owe them £150, you can be darn sure I’m getting out the chloroform and dumping people through the door. And that’s essentially what these people are being told by their employers. Hit your targets, or we are going to cap your bonus and earning potential.

      We have a financial advisor we partner with, and for each person we refer who takes a mortgage out, £20 goes into a kitty for our office to spend on what we want at the end of the year. Do we mention it to every buyer now, rather than the handful we did when we didn’t offer mortgages, but had a local broker who dropped some wine and biscuits in once a year? Of course! Do we force it down their throats? No!

  3. Diogenes

    Whilst agents get away with it due to lack of enforcement, it wont change.


    It’s like a spaghetti western.
    Gunslingers here, there and everywhere.

    Perhaps we need to create the Ethical Association of Property Agents, Property Lawyers and Property Finance Professionals (No Referral Fees Paid).


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