Should I be paying an estate agent an upfront fee for this?

kratosthegreat

I am looking at getting a mortgage on a new build flat. I have been to a viewing which has been organized by the estate agent, and I will also be getting some 'advice' from a mortgage adviser from the estate agency. The estate agency has compared mortgage offers available to me and got me a mortgage in principle on one of the better offers.

At the meeting with the mortgage adviser, after or during which he will try to progress my mortgage application, he wants a fee of around £500. Shouldn't the fee for the estate agency be a commission form the seller (in this case a housing association)?

If it's relevant, this is also a Shared Ownership Scheme (already done my research on the pros and cons, so please no debate about that in this thread).

Should I try to haggle? I'm genuinely considering not continuing because of that fee.

stator

It's quite standard for estate agent mortgage brokers to charge a fee of about £500. Personally I wouldn't use them but if you want to use their service you have to pay for it. Some people will say that paying for your advice guarantees you get the best product regardless of the commission. If they were paid on commission only you might be sold the one that pays the highest commission instead. I wouldn't know about that.
If you don't want to pay for a mortgage broker then don't use one and do the work yourself

nubbins

I wouldn't be using an EA's in house broker and depending on the mortgage amount I wouldnt be paying them any fee. I might get corrected but a broker gets approx £350 for every 100k of mortgage from the lender so depending on your loan amount you may be able to get a broker that can get you a good mortgage for nothing, at worst shopping around for your own I reckon you could halve that fee.

lostftb

If the fee is the only reason you're considering of not going ahead for but you like the place, shop around, there's plenty mortgage brokers around and it is possible to get a good deal with one that gets a commission from the lender and therefore comes at no cost to you. You're not at all obliged to go with the EA's broker and while it might seem the simplest, don't forget the EA works for the seller and gets a commission from the sale so will usually try to squeeze as much from you as they can and knowing your finances will tell them how far they might be able to push.

Oh, and during our recent house hunt we've heard from multiple EAs 'our broker needs to vet you due to previous purchase falling through due to buyer not getting a mortgage before you can view the property' more than once. We always refused saying we had an AIP and a broker already, still got to see all the properties we wanted to see without giving all the details to the EA or their broker.

amnblog

Most mortgage brokers charge a fee for their services in some form.


On a shared ownership case the mortgage sizes are modest and the fee received by the broker from the Lender is unlikely to cover their time.


We can argue about the size of the fee but quite frankly if a fee of a few hundred is putting you off the purchase I would question whether you should be buying at all.