Offer Accepted if buyer uses Estate Agent's mortgage Advisor

Clytemnestra

My daughter is looking to buy her first house.  She has been to a mortgage broker and has been accepted for a mortgage with a reputable lender.  She has now put an offer in on a house that she likes, and has just received the following email from the estate agent:

"Hi,

 The seller would like to accept your offer of £xxxxxx with keeping things in house (using xxxxx, as your offer is more secure than  the other higher offer on the property).

 When is a good time for you to go through the next steps with her?

 We also need confirmation of the solicitors you intend to use.

 Congratulations and I look forward to hearing from you.

 Kind regards,  ..."

In other words, we will let you have the house if you use our mortgage advisor! 

Surely this is illegal?

 I am telling her not to touch it with a bargepole.  She is "thinking about it".  Could I have the opinions of people who are more up to date with house buying experience than I am.

Thank you.

CSI_Yorkshire

What law do you think it breaks?

Why doesn't she just reply with "my offer of £xxxxx is conditional on using my own choice of solicitor and mortgage broker"?

fiish

When you say "accepted for a mortgage", I take it you mean she has an agreement in principle? It's not possible to get a mortgage offer without an offer accepted.

She should clarify with the agent whether her offer is in fact accepted or not. If the agent says in writing that acceptance of the offer is subject to using their in-house broker, that is conditional selling which is illegal.

While the agent's practice is unethical and likely illegal, if your daughter really likes the house, it may be worth playing along at least for the initial steps, if they don't cost money. I.e. string the agent's broker along, until the agent issues the memo of sale (this needs choosing a solicitor!), then apply for the mortgage through her favoured broker.

Clytemnestra

Thanks for you reply fiish.  Yes, I mean she has an agreement in principle.

Ksw3

I had a similar although less blatant thing happen with a company which begins with C, I agreed to the appointment then cancelled it before it happened and said I had found another broker. They didn't say anything. 

CSI_Yorkshire

fiish said:

If the agent says in writing that acceptance of the offer is subject to using their in-house broker, that is conditional selling which is illegal.

It's not illegal for the vendor to decline the offer, or to add any conditions they like.  It's up to the prospective purchaser to accept, refuse or negotiate the conditions.

The vendor could say I only want to accept offers made on Tuesdays, offers made by people wearing jeans, and offers written on Post-it notes.

eddddy

CSI_Yorkshire said:

What law do you think it breaks?

It's probably The Estate Agents (Undesirable Practices) (No. 2) Order 1991. It talks about:

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.

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

And the Property Ombudsman says: 

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-of-practice/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A4_FINAL.pdf

In this case, it sounds like the estate agent is trying to skirt around the rules by suggesting that the seller has made it a condition (so it's not a condition made by the estate agent).

But I suspect the seller was persuaded/bullied into doing that by the estate agent.



As others say, you could kick-up a fuss now - or just pretend to go with it for the moment, and "change your mind" in a few days time.

propertyrental

The https://www.tpos.co.uk/ code of practice says:

Offers

9a By law, you must tell sellers as soon as is reasonably

possible about all offers that you receive at any time until

contracts have been exchanged unless the offer is an

amount or type which the seller has specifically instructed

you, in writing, not to pass on. You must confirm each offer

in writing to the seller, and to the buyer who made it, within 2working days.

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. Discrimination includes but is not limited

to the following:

• Failing to tell the seller of an offer to buy the property.

• Telling the seller of an offer less quickly than other offers

you have received.

• Misrepresenting the nature of the offer or that of rival

offers.

• Giving details of properties for sale first to buyers who

have indicated they are prepared to let you provide

services to them.

EAs must have signed up to one of the ombudsman schemes, and TPOS is by far the most common.

CSI_Yorkshire

eddddy said:

CSI_Yorkshire said:

What law do you think it breaks?

It's probably The Estate Agents (Undesirable Practices) (No. 2) Order 1991. It talks about:

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.

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

And the Property Ombudsman says: 

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-of-practice/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A4_FINAL.pdf

In this case, it sounds like the estate agent is trying to skirt around the rules by suggesting that the seller has made it a condition (so it's not a condition made by the estate agent).

But I suspect the seller was persuaded/bullied into doing that by the estate agent.



As others say, you could kick-up a fuss now - or just pretend to go with it for the moment, and "change your mind" in a few days time.

Absolutely - something like "you know how it's always smoother if they use our people, makes it more proceedable" etc etc  Just enough vagueness to not fall under misrepresentation.

Illegal if they don't pass on the offer, very sharp practice (and I don't think TPOS would be very happy) if it's weaselling.

NameUnavailable

Why doesn't she just speak to the mortgage broker - they may actually find her a much better deal! If they don't she can then say thanks but no thanks I want to stick with the deal I've got.

eddddy

NameUnavailable said:

Why doesn't she just speak to the mortgage broker - they may actually find her a much better deal! If they don't she can then say thanks but no thanks I want to stick with the deal I've got.

I guess there's also the consideration that you don't want your mortgage broker collaborating with the seller's estate agent.

• You may get info from your mortgage lender, or your mortgage broker which you don't want to share with the seller's estate agent (or you want to delay telling the seller's estate agent).  If they work for the same company (or have a close business relationship), there's a risk that they might pass information directly between each other.

• They might 'gang-up' against you. For example, the estate agent wants a quick easy sale. So your mortgage broker might push you hard, in order to help the estate agent achieve their selling targets.