'Standard' Estate Agent practices?

Seraphim

I'm looking to buy a property and went to see some this morning. The agent who took me around warned me at the end of the viewings that I couldn't place an offer on any of the houses until I had spoken to their mortgage advisor to see what sort of mortgage I could afford.

I also have to give the offer in writing, and have one of their agents has to sign the offer in person at their offices before the offer is valid. I was told that this is 'standard practice' for all estate agents now as it sorts out the time-wasters from the real buyers. I've been to see houses now with 4 or 5 agents and none of them have had this ridiculous practice - I live about 100 miles away from where I'm looking to buy, so quite frankly I think having to travel 100 miles to write on a bit of paper "I want to offer x" is a bit silly - all the other agents have accepted verbal offers over the phone. Also, I don't want the estate agent knowing all my financial details!

Are these really standard practices these days??

Doozergirl

No it's not standard practice at all.

Many salespeople only get paid commission on pushing their mortgage advisors and solicitors and this is a bully-boy tactic to make you play ball. I have been subject to those tactics in the past. I've told them quite firmly that my own mortgage advisor is whole of market and a very good friend, so they have no hope in hell of me using their advisor. (Hopefully, you've already sorted a mortgage with a whole of market broker).

The offer thing is rubbish too. There's nothing to bind you to sale in that piece of paper either, so it's only going to weed out proper idiots.

If you are going to put forward an offer, call tomorrow and ask to speak to the sales manager and ask them whether you need to confirm this 'standard practice' with the NAEA or the OEA? Tell them they can speak to your mortgage broker to confirm affordability and if they won't still won't forward your offer, you'll be travelling the 100 miles to knock on the vendor's door instead. I'm sure they'd be pleased to hear how hard the agent is working on their behalf :rolleyes:

Poppycat

I havent come across this but then I dont have a huge experince of buying houses. I just put an offer on table below asking price, a few days later I got a letter from EA in writing and the they rang me and told me it hadnt been accepted. I did the same again and eventually we agreed a price via EA being in touch with the seller.

I wouldnt also been pushed around by the EA with regards to there mortgage broker.

If you are travelling that short of distance surely it shows some sort of commitment and that you arent messing folks around.

carrielouise80

Seraphim wrote:

I'm looking to buy a property and went to see some this morning. The agent who took me around warned me at the end of the viewings that I couldn't place an offer on any of the houses until I had spoken to their mortgage advisor to see what sort of mortgage I could afford.

I also have to give the offer in writing, and have one of their agents has to sign the offer in person at their offices before the offer is valid. I was told that this is 'standard practice' for all estate agents now as it sorts out the time-wasters from the real buyers. I've been to see houses now with 4 or 5 agents and none of them have had this ridiculous practice - I live about 100 miles away from where I'm looking to buy, so quite frankly I think having to travel 100 miles to write on a bit of paper "I want to offer x" is a bit silly - all the other agents have accepted verbal offers over the phone. Also, I don't want the estate agent knowing all my financial details!

Are these really standard practices these days??

NO!! these are not standard practices, i have heard that some large corporate firms are trying to pull these stunts as some agents do get paid commission on referrals to FA's and conveyancing, they are target driven, with their jobs potentially being at risk if they do not meet their targets. Thankfully i have worked for a good independent agent for a few years - any recommendations i make are purely personal - i do not earn any commission so my conscience is 100% clear If you have any concerns about bad practices i would consult N.A.E.A they regulate the industry! if they don't know about such tactics they can't stop them!

Good luck

shockingmoment

Play their game. Go through the motions, get the 'Advisor' to work and work, then say no thanks, got one already....

courtjester

It's worse than that, it's illegal.

Estate agents are legally obliged to forward ALL offers received to their clients - they are breaking the law if they don't and the client has not set a limit below which they have informed the agent an offer will not be considered:

The Estate Agents (Undesirable Practices) Order 1991

They should be reported to the local Trading Standards office. Far too many estate agents continue to flout basic agency laws owing to their drive to sell financial services instead of doing their job properly.

See also the OFT website.
http://www.oft.gov.uk/Consumer/Your+Rights+When+Shopping/Home/estate+agent+wrong.htm

GabbaGabbaHey

Doozergirl wrote:

I've told them quite firmly that my own mortgage advisor is whole of market and a very good friend, so they have no hope in hell of me using their advisor.

I do something similar - I tell them that I work for a financial institution and that I can take advantage of special staff deals (they don't need to know that these deals are no better than are available on the high street.)

One problem, though, is that the EA may well try to persuade the seller to go with a buyer who is getting their mortgage through the EA, rather than somebody who has arranged their own mortgage. They probably make more money out of the mortgage than they do from the fees for selling the house.

courtjester

Gabba - yes but that's still illegal owing to the conflict of interest.

An agent is not allowed to discriminate between offers on the basis of preferring buyers taking their mortgages and only forward those that they have 'qualified' to the client.

The agent must forward ALL offers irrespective. If they do not, they should be reported to Trading Standards and /or the OFT as they are breaking the law.

GabbaGabbaHey

Courtjester

I fully agree with what you say about legality. However, the reality is that will not stop an unscrupulous EA from trying to persuade a seller to sell to a potential buyer who has taken their mortgage through the EA, rather than from somebody offering the same (or similar) for the house but who has arranged their own mortgage.

They can even (truthfully) tell the seller that they know that buyer X is in a position to proceed, because they are providing them with a mortgage, but that they cannot comment on buyer Y, who claims to be sorting out their own mortgage. Many sellers will be swayed by their EA's advice.

Rick62

As other posters have said, they only want you to use their recommended mortgage broker because they receive a commission (or may be part of same firm) and, although illegal, they can get feedback from 'their' mortgage broker on how much you can afford, which can impact on your negotiating position.

What would be worthwhile is if you get an 'agreement in principle' from your lender (or if you use a broker he can arrange this) to show you are serious and have the money. Then put your offer in writing and enclose a copy of you mortgage agreement in principle. It is nonsense, and illegal, to say you have to sign it in person at the office, they are obliged in law to put all offers forward.

And remember, the EA represents the seller not you, so anything they say about higher offers etc may be true or may be to just try and get you to increase your offer. If you have any doubts if the EA is putting your offer forward properly (i.e. are they saying your offer is genuine and you are in a good position, or are they saying 'we've had an offer from Seraphine, but we are not sure they are in a financial position to proceed) you could always copy your offer direct to the seller, including a note stressing that you are serious and your mortgage offer is in place.