Estate Agent tactics

princeofpounds

might be stupid question but what is the EA motivation for trying to force people to see their Financial advisors?

i've put an offer in on a house and they insisted that i come into see thier FA on Friday afternoon, i was rail roaded into it and i'm going to cancel the appointment, as i have an AIP already.................i just don't understand what their motivation is!

do they get paid by the banks or do i have to pay them something?

2 reasons:

1. They get a commission from selling you a mortgage product or anything similar such as mortgage payment protection insurance.

2. They understand your entire financial situation and so can try to squeeze you to bid higher if they know you can afford it. A clear, shocking conflict of interest but the government doesn't seem to care about the practice.

Going to see them in itself is not harmful, but buying anything from them can be, and disclosing any sensitive information to them can be.

You need to make the EA very aware that you know that you do not need to see the FA to prove funds - your mortgage paperwork and a bank statement are usually enough for that. You also need to make them aware that you know that they are legally obliged to pass on any offer submitted in writing. Finally, they need to know that you won't hesitate to contact the vendor directly if you think they are blocking your offer for their own financial gain.

Your choice what to do with the appointment.

googler

You also should take a copy of the OEA and NAEA codes as quoted by chickmug above (get the originals with a google search), and, if they are OEA or NAEA members, point out that they should act according to their code.

If they aren't members, and they insist on acting contrary to it, ask them why they think they're exempt.

Hauzen

I am experiencing a similar thing - interested in buying a property marketed by a nationwide EA chain, but have been pestered by the EA to visit their in-house financial adviser so that they can 'get an idea' as to whether any bid I make would be viable. On the face of it that does sound fair enough (protecting seller's interest) but it's certainly not fair enough from my side as that then gives the EA knowledge of exactly how much I could afford to pay and that gives them an edge when it comes to the bids. I already have an AIP in place and the deposit is sitting in a bank account ready for use, so they'll see the exact proof of viability as soon as an offer is made/accepted.

I initially rejected the meeting when it was first proposed, but I must have mentioned my specific circumstances for wanting to move (relocating to a large town to work in a smaller town on the outskirts) to either them or during a viewing as I was contacted by the financial adviser at their branch in the town that I worked with regard to arranging a meeting.

This is all very annoying as I'm very interested in the property, but not at all enamoured with the way the EA seems to be disregarding my wishes.

lindos90

princeofpounds wrote: »

2 reasons:

1. They get a commission from selling you a mortgage product or anything similar such as mortgage payment protection insurance.

2. They understand your entire financial situation and so can try to squeeze you to bid higher if they know you can afford it. A clear, shocking conflict of interest but the government doesn't seem to care about the practice.

Agree with point 1, they have targets, get commision and back handers from selling HIPS, 'introducing' you to a solicitor and any other financial product they can.

Very strongly agree with point 2, they would know exactly what your maximum borrowing could be, and would know how much to push you to make a higher offer, I wouldnt put it past them making up false offers just under what they know you can afford...hows anyone going to find out?

The EA does not work for the buyer, and sometimes they dont even work in the best interests of the seller. (My opinion and experience, im older and wiser now!)

Horizon81

When I was putting in an offer with a house advertised by Halifax EA (now sold off to Reeds Rains) they told me I had to see their in house broker - talk about a conflict of interests, surely a Halifax EA based broker would only sell Halifax Mortgage products. Anyway I told them to get lost despite their insistence - I'd sorted out my own mortgage and didn't want the spiel from their 'impartial' broker.
I'd never go to see an EAs broker for the reasons already stated - namely that they'd know all of your finance details and so could easily pass that knowledge onto the EA.

To be honest, unless you're clueless with numbers I don't even see the point in using an independent broker. Money supermarket or the FSA's website lists all the deals you can get, either yourself or via an 'intermediary' _ i have yet to see a deal via an intermediary that trumps any deal you can get yourself.

fisrtimebuyer

goldengirl28 and Hauzen I had the exact same thing happen to me. You will really have to be firm as they will try and push you.. they may want to just see the state of your finance as part of vetting ... advised them you already have your mortgage sorted and what documents do they need to have to show them this.. if its not about that they will try and persuade you to use them ..

They get a massive chunk of commission..paid by the banks and sometimes they will charge you as well (dress it up with some funny name).. so get paid double. Also they will know how much money you have to spend... the cynic in me would say its not a good thing for the EA to know that you have X budget to work with (bidding wars ?agree strongly with point 2 btw)

But I could be so very wrong with the last comment

Hope it helps (I really know how stressful this can be this forum has been a life saver)

ab7167

Yup, we were pressured into this as well. Point blank refused, as we had already had one house fall through so we already had a mortgage offer. Plus attending the appointment would have meant a 34wk pregnant lady (me!) dragging a 2 year old through the snow and ice to get there. My solicitor went ballistic with them when he found out, and they offered a telephone interview instead. Told them to get stuffed, they claimed to be doing it to ensure we could afford the offer we made. Shame they didn't check out the vendors financials, turned out to be more debt secured against the house than would be covered by the proceeds of the sale and the sale has subsequently collapsed as we were not willing to go ahead with that uncertainty. When I pointed out the discrepancy in the information they required from buyer and vendor they went very quiet.

I think it is shocking behaviour to be honest, the most they eventually got from us was a copy of our passports and a snitty phone call from our solicitor informing them that we could afford the property and it was none of their business how. Bit ironic, seeing how things turned out!

katebl

If the large national chain everyone keeps mentioning is C______wide group, the EA booking your appt. will usually receive in the region of £10 for getting you through the door to see the mortgage advisor, once there you can refuse to give any figures and just generally discuss rates even. If you have half an hour to spare, or basically just turn up, they'll be ecstatic as they are targeted on these bookings. The manager and broker also receives a small amount for these appointments. Also the broker is paid a flat fee (% of total borrowed) no matter who they place your mortgage with.

DVardysShadow

ab7167 wrote: »

... Told them to get stuffed, they claimed to be doing it to ensure we could afford the offer we made. Shame they didn't check out the vendors financials, turned out to be more debt secured against the house than would be covered by the proceeds of the sale and the sale has subsequently collapsed as we were not willing to go ahead with that uncertainty. When I pointed out the discrepancy in the information they required from buyer and vendor they went very quiet.

An excellent point well made. And next time anyone is hassled to go and speak to the advisor, I think everyone should demand to see from the agent their evidence that the vendor is able to complete.

It really does expose the cheek of prequalifying offers via the 'mortgage advisor'

Hauzen

Had an offer accepted on the house I was interested in last week and the mortgage application went in yesterday morning. Since then I've had two phonecalls from mortgage advisers with the seller's estate agent claiming they can "get a better deal" than the one I'm applying for (they don't even know what that is!). Bordering on harrassment, this...