Mortgage brokers attached to estate agents

nethesi

I have always been wary of mortgage brokers attached to estate agents, if nothing else because agents are always so pushy about it!

I am suspicious that as well as the obvious commission that the broker gets it also means that the agent knows your financial details and thus thinks they can push you more financially. Had a hard push call about this from an agent earlier today and suggested this to him as a reason why we were reluctant to use an estate agent's broker. He said 'oh no we're whole of market' and continued to deliberately (?) misunderstand me.

My question to anyone who knows more about this than me is - is there any reason why a mortgage broker employed by an estate agent WOULDN'T share your financial situation.

Reason being that according to my looking around online, OH and I could borrow substantially more than we are willing to and could buy a house substantially more over priced than we intend to even from 'responsible' lenders e.g. nationwide

Lizzy

Humm I wondered about this. I put in an offer which was accepted on my latest BTL. The agents offered the service of their broker (whole of market) I said as I rent to students it was unlikely that they could do anything for me and I may as well use my usual mortgage company. As it is all business to me I went in to see her and gave her a list of MY requirements.
She was able to find a company offering 5.99% fixed for 3 years interest only with a £1.995 arrangement fee. I don't pay a valuation fee and I don't pay her a fee either. This has beat Mortgage Express at 6.24% with valuation fee and £2333 arrangement fee.

The company is UCB I think part of Nationwide or other well known lender but can't remember who exactly right now.

I'm going in to see her tomorrow to go over a few things.
I feel a saving is a saving and if it all adds up tomorrow I will probably go for it.

You know how much you need to borrow so don't be pushed around. I'm sure they will only quote you what you need. Just make sure the advice you are given is free of fees. I am paying an arrangement fee to the lender because it is BTL otherwise I wouldn't. I think a house valuation fee is fair enough but not any arrangement fee.

kevinchapman82

I'm an independent broker with access to the whole of the market. I work for a large estate agents chain and sit at the back of their office.

I would never allow my estate agency colleagues to pressure my clients into spending more than they want to. It all comes down to the quality of the people working for the estate agency, and the broker themself. If you don't trust them, go somewhere else.

Curv

In circumstances like this, organisations are supposed to adopt a chinese wall type approach. I'm sure there are many brokers who maintain a professional distance between their client as a borrower and the same client as the estate agent's purchaser. But, as with every industry, there will be the odd rotten apple.

I think the question to ask is: What is to be gained by using the agent's in-house broker? Is there any advantage which would be lost by going to an independent?

nethesi

Thanks for the replies I guess it shows that good brokers/agents won't do this but that it's not impossible. We have used an agent's broker in the past who was good and didn't pressure us, but that agent was quite reputable. I have a suspicion that the agent I was thinking about when I asked my question is more of the unscrupulous variety!

Have got our mortgage agreement in principle sorted out anyway now...

jonewer

I really hate it when EAs do the hard-sell to use in-house brokers. One of the reason I never ever view a YOUR MOVE property regardless of how nice the place looks. I simply cant be dealing with their nonsense.

Debt_Free_Chick

I agree completely with Curv - there should be NO SHARING of information either way, unless you expressly agree to it i.e. in writing.

If you chose to go with the connected broker, you would have a contract (client agreement) with him and that must contain a confidentiality/data protection clause?

If so .... read it very, very carefully .... they might word the agreement so that by accepting their terms, you are giving them permission to share your information with the EA. This would happen if the broker and the EA were two separate companies, but owned by the same group, and the agreement provides for sharing information between different companies in the group.

If so .... simply strike it out!!!! Or, as you say, just avoid them. Plenty of good WoM mortgage brokers out there with no attachment to EAs.

RickG

Estate agents should never have mortgage brokers attached to them. The whole idea is flawed.

The estate agent is the agent of the seller, his client. Therefore, he owes him a fiduciary duty. This means that any money, earned by the estate agent from the arrangement of the buyer’s mortgage, belongs to the seller, unless he consents to the estate agent keeping it.

Such consent must be “informed”, which means that the seller must understand:-

• that he is entitled to refuse it;

• that, if he does refuse it, he gets the money.

There is no good reason why the seller, properly informed should ever give consent.

But sellers are generally not properly informed. The estate agent is obliged to inform a seller, before he instructs him, that he or certain others may offer mortgage services to prospective buyers. If the seller then goes ahead and instructs the estate agent, that amounts to consent.

So a seller should always actively refuse consent. But, if all sellers did that, there would be no point in estate agents having mortgage brokers attached to them at all.

An estate agent, who refused to act for sellers who refused consent, would not be in estate agency to do estate agency but to create mortgage leads.