Using estate agents' in-house or recommended mortgage advisors?

BrumBab30

We are currently looking for a house and we are first time buyers. We are really struggling with booking appointments with estate agents, surprisingly not because it's difficult to get viewings, because they are forcing us to qualify with either their in-house or recommended mortgage advisers, even though we have already sorted a mortgage in principle with our own mortgage broker. Some of these estate agents are suggesting that to go with their mortgage advisers means that we will get preferential treatment when it comes to making an offer. From my research, we are not legally obligated to use their mortgage advisors if we have our own? Is this correct or do we have to use their preferred mortgage people? I don't feel comfortable going through all our finances and having soft credit checks with several different estate agents, when we have done all that already.  Does anyone have any advice on how to deal with pushy estate agents who are forcing us to use their own? Any help would be much appreciated! 

MaryNB

You do not need to use their services and it is against The Property Ombudsman's code of practice for you do be disadvantaged if you don't. 

They're telling you that to persuade you to use their services because they want your money. My seller's EA did the same to me. Told me it would make my offer look better - mine was the only one on the table. I refused and went to my lender directly. 

However they may insist on you doing a financial check with them as part of a vetting process. My seller's EA did this and it was just a sales pitch for their mortgage advice service. I did the check, declined their £600 services and got the house. 

pinkshoes

You could always just go to the appointment then refuse to give any financial details, pointing out that they are associated with the EA and it would therefore be unwise for you to "reveal your cards" to them. 

(Because it's not to YOUR advantage to reveal how much you can afford...)

Just tell the finance people you have a sufficient deposit, already have a MIP, and are only seeing them as the EA refused to let you view the house otherwise. 

BrumBab30

Thank you both. You have clarified everything I was thinking and researching. I thought I was going mad or they were trying to take advantage of the fact we are first time buyers.

MaryNB

If they do ask to check your finances and then try to use your funds against you to bump up the price, just hold firm. You may have more money but it doesn't mean you are willing to spend more on the property. You don't want to put yourself at risk of a downvaluation by offering too much.
I could have offered more and they knew it but I had already told them I refused to pay more than asking. They never tried to convince me to offer more once my offer was accepted.

eddddy

MaryNB said:

If they do ask to check your finances and then try to use your funds against you to bump up the price, just hold firm. You may have more money but it doesn't mean you are willing to spend more on the property. You don't want to put yourself at risk of a downvaluation by offering too much.
I could have offered more and they knew it but I had already told them I refused to pay more than asking. They never tried to convince me to offer more once my offer was accepted.

I'm not sure that's the main issue. 

It's more about when...

• Buyer A offers £245k - and will be using the EA's inhouse/recommended mortgage broker
• Buyer B offers £250k - but won't be using the EA's inhouse/recommended mortgage broker

So Buyer A would generate more fees for the EA than Buyer B.

So the EA tries to convince the seller that Buyer A's is the better offer, because "Buyer B has refused to be assessed by the mortgage broker, so they can't be sure their chosen mortgage broker is any good, or whether they can really get a mortgage etc, etc."


Or even worse,

• When a new property comes on the market, the EA always remembers to call Buyer A - but seems to forget to call Buyer B
• And Buyer A is always seems to be put at the top of the viewings list, and the viewing list always seems to be full when Buyer B calls. 

BrumBab30

eddddy said:

MaryNB said:

If they do ask to check your finances and then try to use your funds against you to bump up the price, just hold firm. You may have more money but it doesn't mean you are willing to spend more on the property. You don't want to put yourself at risk of a downvaluation by offering too much.
I could have offered more and they knew it but I had already told them I refused to pay more than asking. They never tried to convince me to offer more once my offer was accepted.

I'm not sure that's the main issue. 

It's more about when...

• Buyer A offers £245k - and will be using the EA's inhouse/recommended mortgage broker
• Buyer B offers £250k - but won't be using the EA's inhouse/recommended mortgage broker

So Buyer A would generate more fees for the EA than Buyer B.

So the EA tries to convince the seller that Buyer A's is the better offer, because "Buyer B has refused to be assessed by the mortgage broker, so they can't be sure their chosen mortgage broker is any good, or whether they can really get a mortgage etc, etc."


Or even worse,

• When a new property comes on the market, the EA always remembers to call Buyer A - but seems to forget to call Buyer B
• And Buyer A is always seems to be put at the top of the viewings list, and the viewing list always seems to be full when Buyer B calls. 

So what do you suggest? Do we still sit through a financial advice meeting with every EA that pushes their own mortgage broker? We've had about 4 ask us to do this and to be honest, we don't have the time to do this every time, especially when time is precious to get viewings in the first place. Just seems a bit farcical to me 

eddddy

BrumBab30 said:

So what do you suggest? Do we still sit through a financial advice meeting with every EA that pushes their own mortgage broker? We've had about 4 ask us to do this and to be honest, we don't have the time to do this every time, especially when time is precious to get viewings in the first place. Just seems a bit farcical to me 

It's difficult - because it's really hard to prove it's happening.

If you suspect it's happening, I guess options include...

• Mention complaining to the Property Ombudsman etc. Whilst you probably wouldn't have enough proof to win a complaint, the EA probably wouldn't want to have that kind of attention from the Ombudsman. But I suppose the EAs attitude could go either way. They might be even more determined to 'shut you out' to get their own back on you.

• Or take a very different approach and try something like "If you can get my offer accepted on the property, I'll meet with your adviser, and if they can match or beat my current mortgage offer - I'll go with them" (And maybe change your mind once your offer's accepted)

• Or like you say, waste time meeting with their adviser, and sound positive as though you're going to use them.

NameUnavailable

Most EA's will ask you to speak to their MA to qualify an offer. You should only need to give them basic details so that they can confirm that the lending won't be an issue (obviously you have that with an AIP but you could of course put false info to acheive that).

FWIW I had sorted a mortgage but when I agreed to speak to the agents MA they were able to offer a much better deal than I'd been able to find, so in my case I'm glad I did it.

BrumBab30

NameUnavailable said:

Most EA's will ask you to speak to their MA to qualify an offer. You should only need to give them basic details so that they can confirm that the lending won't be an issue (obviously you have that with an AIP but you could of course put false info to acheive that).

FWIW I had sorted a mortgage but when I agreed to speak to the agents MA they were able to offer a much better deal than I'd been able to find, so in my case I'm glad I did it.

What would you consider basic details? When we booked to view a property with an EA, they pushed us into arranging a financial services appointment, despite the fact we told them we are working with a broker. They said for this financial meeting they wanted us to provide the following:

• photographic ID
• Proof of deposit (latest bank statement including name and address)
• 3 months consecutive bank statements 
• 3 months payslips
• credit report

We were not asked to present these to our broker when we did the mortgage in principle and our broker said they will only ask for that once we've put in an offer that's accepted and then start the process.

ACG

Take the appointment if it helps you to view the properties but stick with your broker.
Then PLEASE report this, your broker will be able to help you with where to report it. It is illegal under the estate agents act. 

I am all for business being business, but I really do not like people being coerced into using the EAs solicitors or brokers. Their solicitors will usually be around £300 more expensive, unsurprisingly guess how much kick back they usually get... 

The problem is not enough people report it, so it just goes on. Yet nobody likes it.