Estate Agents' in House Mortgage Advisors. Bad idea?

Adamspoon

Hello, first post and all that. Have been reading through the forum and have already learnt a lot about Mortgages and Mortgage advisors.

My fiance and I are first time buyers and have just started looking for a property. We have been registering with lots of estate agents and, every time, the agent tries to push their in house Mortgage Advisor. To me it seems like a bad idea to have a mortgage advisor connected to the estate agent but i can't really put my finger on why i think this!

So, is it a bad idea to go with a mortgage advisor who is linked to the estate agent? If so why?

As you can probably tell I'm pretty new to this, so any advice greatfully accepted!

wymondham

I'm always suspicious of 'in-house' advisors ... how can they be truly independant if they know their colleagues in the next room on first name terms and frequent the same pubs at lunchtimes?

You need someone who is truly independent to get the advice that is best for you (not them!)...

A_Nice_Englishman

Don't let estate agents bully you into using their in-house [strike]advisors[/strike] sales people. It is illegal for them to discriminate against buyers who decline to use their services. See Part 6c of the Ombudsman for Estate Agents Code of Practice

Conrad

This is why it's bad;

Lets say the negotiator wants to get you to offer more on a property. First thing he will do is have an off the record word with the adviser to find out your maximum borrowing capacity!

Of course the broker is not meant to divulge this, but given its the hand that feeds him, the pressure is usually too great not to play ball.

Other negatives include the possibility the advisir might consider the mortgage a difficult one to place and may therefore transmit these feelings to the EA thus undermining your chance of getting a property you want.

dunstonh

Estate agent advisers have a very poor reputation in general. Of course there will be exceptions but a good number of them are tied to one insurance company (often Legal and General). So, whilst they may use the mortgage side to suggest they are whole of market, usually its only in that bit they are.

The advisers are independent estate agents do tend to have better reputations than those at chains.

loulou111

From my own personal experience I would say please do not use in house mortgage advisors. Myself and hubby purchased first property last year and we were very naive and the estate agents saw us coming mile off! we had a mortgage promise from halifax already when we went looking but the 'mortgage advisor' convinced us we would be better off with northern rock!!! he painted perfect picture and we borrowed much more to buy a bigger property than the halifax mortgage would have allowed. We also ended up nearly getting gazumped and I am convinced this was due to using the in house mortgage advisor as he knew exactly how much we could afford. I would say by viewing this forum you are doing exactly the right thing and i only wish i had the forsight to do so.

homer_j_3

There are, as Dunston says, exceptions to the rule and I would like to think that I was one when I did my time in the EA.

When considering choosing any person to provide you with advice on the biggest purchase/s of your life, you need to ensure that you are fully aware of the scope that, that person has.

Asking if they are whole of market is BS imho. You need to break it down to the lowest common denominater(sp?). How many lenders can you access, how many insurance companies can you access.

Its ok, saying that the EA adviser will disclose your borrowing capacity or will do something which ends up pushing you into something that you probably would not have got into going through a non EA adviser. The fact is that there are bad non EA advisers out there too and you have to have a balanced view on this.

So, if you check the credentials of the Adviser - ask how long they have been doing it, how many lenders they can access (ask for a list) and you feel that this person can help you then that is far better than just going to a self employed broker who is desperate for business and will try and fit you into anything that pays enough commission etc.

I am now my own boss and have been an EA adviser so speak from both sides. Just take precaution when deciding who is best for you. Don't be forced into something that does not feel right and dont be scared to say you want to think about it.

There are good and bad out there and its true that there are a lot of sales people out there and not advisers. To spot these, actually listen out for the adviser telling you why something may be better than what you thought or challenging your thought process. If they are not doing this, then they are clearly taking your order and no advice is really given.

minimike2

Spot on there Homer j. Echos my own experience and stauts really.