Competing buyers - conditions from Estate Agent

Lisamia

I put an offer in on a property a week and a half ago, and was given a counter offer, which I quickly agreed to. A couple of days later, we are being told there's a couple who have made a similar offer, and the vendors are trying to choose between us, but they don't want us to raise our offer. It would be based on who they think can complete best and fastest, so we should use EA's broker and solicitor, and provide a promise letter from someone who can loan us money if anything changes. We tried to sidestep all these and stayed how strong our position was with a healthy deposit, not borrowing our maximum etc.
Fast forward a few more days, and now there are four offers on the table, and at least one is higher than ours. 
The house is now "under offer" with the sellers deciding between the different offers, and now we need to put our "best and final" offer in, and agreeing to use the EAs solicitor will be seen very favourably.
The whole process had been extremely stressful, and we are FTB, reluctant to use his solicitor, but if he's going to back the buyers and recommend them more strongly, we also don't want to weaken our position in that sense.
We are well aware that his tactics are not lawful, however we absolutely love this property so would appreciate advice on whether going with his solicitor is a risk that is acceptable to take!

MaryNB

I got the same rubbish from my sellers EA about using their mortgage broker but refused to and still proceeded with the sale. I wasn't under the same pressure though with regards to other offers.

Don't use their solicitors, get your own well recommended local solicitor who will work for you. Do not agree to the loan. A lot of lenders won't accept a loaned deposit. A deposit will have to be given without conditions.

Have a look at part 9cd of the Codes of Practice for Residential Estate Agents (England, Wales and Northern Ireland).

Ultimately the sellers choose the buyer based on their own criteria but obviously the EA can influence their decision.  

anselld

There will be other properties if necessary.  Not worth getting involved in estate agent games in my view.  

nyermen

A lot of lenders won't accept a loaned deposit. A deposit will have to be given without conditions.
I believe the regulator's conditions on those high LTV mortgages that are now limited per bank balance sheet, is based on a strict deposit definition.  So unless a very nice LTV, it wouldn't help anyway.
I guess the sellers have said to the EA "let us know which you think is best" and they're making the most of it.

There will be other properties - I would consider an independent solicitor one of the most important parts of a purchase - read all the horror stories of new builds where the "builders solicitor" was used and then further down the line, shock horror, it turned out there was items not mentioned that any good conveyancer should have pointed out.

They also clearly intend to keep the property on the market until a certain stage (searches?  Survey?  Confirmed Mortgage offer?), and since there has been interest so quickly, I suggest there will likely be more changes/requests/price increases to come.

Lisamia

nyermen said:

A lot of lenders won't accept a loaned deposit. A deposit will have to be given without conditions.
I believe the regulator's conditions on those high LTV mortgages that are now limited per bank balance sheet, is based on a strict deposit definition.  So unless a very nice LTV, it wouldn't help anyway.
I guess the sellers have said to the EA "let us know which you think is best" and they're making the most of it.

There will be other properties - I would consider an independent solicitor one of the most important parts of a purchase - read all the horror stories of new builds where the "builders solicitor" was used and then further down the line, shock horror, it turned out there was items not mentioned that any good conveyancer should have pointed out.

They also clearly intend to keep the property on the market until a certain stage (searches?  Survey?  Confirmed Mortgage offer?), and since there has been interest so quickly, I suggest there will likely be more changes/requests/price increases to come.

Thanks! We are still scratching our heads as to why he wants a guarantor as such but definitely won't be getting one, apart from anything else we don't need it!
The property is not a new build, but we know there are still risks that we need to have confidence that our solicitor will be working on in our best interest. 
Frustrating, but I guess we will just say we're using our own solicitor and hope things turn out in our favour.

tink_1983

Do not use the EA teams stick to your own.
Put your offer in and wait. 
At the end of the day there will be other houses you love. 

princeofpounds

I suspect there may be another bid, but all you know from this is that the estate agent is dodgy. They should not be selling their associated services (for which they get a big fat commission) using the vendor's property as bait. I can guarantee you the vendor doesn't care a one jot about using the estate agent's services. The whole stuff about having someone lend you money is just weird. Given they will do all that, you can't have much confidence that anything else they are telling you is true. Just keep your offer in and see what happens.

I wouldn't kick a fuss otherwise for now, but after you have bought the property, or after you fail to win it, you can consider reporting the agent to their ombudsman. And/or you can write to the vendor and let them know what the EA was doing. If you don't mind burning bridges. Try to get them to repeat this in writing, or record them. Or you can just forget about it.

The relevant section in TPO is actually:

"1e) You should provide a service to both buyers and sellers consistent with fairness, integrity and best practice; and you should not seek business by methods that are dishonest, deceitful, manipulative or involve misrepresentation. You must avoid any course of action that can be construed as aggressive behaviour (*) or harassment (*)."

Included in the definition of aggressive behaviour:

"18a) ..... Pressuring a potential buyer to use associated services, for example to take out a mortgage through the in-house mortgage advisor or to use a particular firm of solicitors or licensed conveyancers......"

https://www.tpos.co.uk/images/Codes_2019_a5/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A5_-_Effective_1_June_2019.pdf

ETA: And yes, 9d) too - the reason I was 'correcting' it was an earlier poster said 9c)

AdrianC

princeofpounds said:

I can guarantee you the vendor doesn't care a one jot about using the estate agent's services.

I suspect the vendor has swallowed the EA's feedline to them about ensuring their affordability, and easier progression of the sale, etc etc.

Ultimately, you've got a choice, OP.
1. Play the EA's game.
2. Risk the EA downplaying your bid to the vendor.

Of course, if you were to have your offer accepted then announce you were changing solicitors...

eddddy

There are different ways you can play it, but if you want to be a bit passive-aggressive, you could add the following to your offer email/letter to the EA. (You should make the offer in writing, however you phrase it)...

I note your comments that you would prefer a buyer who uses your recommended Mortgage Broker and Conveyancing Service, but obviously it would be illegal for you to discriminate between buyers on this basis. I trust that you have informed your client that it would be illegal for you to discriminate in this way.

As you're probably aware the relevant legislation is part of The Estate Agents (Undesirable Practices) (No. 2) Order 1991 under section 3(6) of the Estate Agents Act 1979, which states:

SCHEDULE 2 
Arrangement and performance of services

1.  Discrimination against a prospective purchaser by an estate agent on the grounds that that purchaser will not be, or is unlikely to be,accepting services.

Link: https://www.legislation.gov.uk/uksi/1991/1032/made


And additionally, it would be a breach of The Property Ombudsman's Mandatory Code of Practice for Residential Estate Agents:

9d  By law you cannot make it a condition of passing on offers to the seller that the buyer must use services offered by you or another party. You must not discriminate, or threaten to discriminate, against a buyer because that person declines to accept that you will (directly or indirectly) provide related services to them. 

Link: https://www.tpos.co.uk/images/Codes_2019_a5/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A5_-_Effective_1_June_2019.pdf

Edit to add...

I think that "The Estate Agents (Undesirable Practices) (No. 2) Order 1991" is a great title for a statutory instrument.

Especially as someone can be barred from working as an Estate Agent if they participate in "Undesirable Practices".

greatcrested

https://www.legislation.gov.uk/uksi/1991/1032/made

Schedule 2(1)

1.  Discrimination against a prospective purchaser by an estate agent onthe grounds that that purchaser will not be, or is unlikely to be,accepting services.

The Property Ombudsman code of practice

https://www.tpos.co.uk/images/Codes_2019_a5/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A5_-_Effective_1_June_2019.pdf

Section 9 (d)

Lisamia

Thanks for your help everyone! We have been emboldened and are sticking with our own solicitor. Our hopes are low but our fingers crossed...