Estate agents are misleading buyers about in-house mortgage services

Estate agents are misleading buyers about in-house mortgage services

According to Which? several estate agents are misleading buyers about in-house mortgage services.

A new investigation by the consumer group saw researchers pose as first-time buyers in high street estate agencies. And, it has been revealed that 27% of these agents said that using their in-house mortgage broker would make a difference to the property purchase.

This is the latest in a series of warnings on this subject raised by Which?

While an earlier survey of 1,720 homebuyers revealed that the majority (55%) of those who used in-house brokers did so because they trusted their agent’s recommendation, some more alarming reasons were also given. For example, 17% used an in-house broker as a condition of being allowed to view properties and 13% were told that it would make them more desirable as buyers.

In its latest investigation, Which? sent undercover researchers to target 29 agents in Birmingham, Colchester, Maidenhead and Maidstone. However, while of those that offered in-house mortgage-broking, none said buyers had to use them, in some cases it was implied that doing so would lead to a better deal.

One agent claimed that using an in-house broker would make the home buying process quicker. Six agents said that doing so would make a difference to their purchase while one even claimed that it could help the buyer get their chosen home at a lower price.

According to Which? reasons why using an in-house broker would make a difference to their purchase included:

·         The sale won’t fall through so you’re in a ‘better position’

·         It will be quicker to get a mortgage or to complete the purchase

·         The agent can keep an eye on progress and keep clients updated

·         Clients are more likely to accept an offer from buyers getting their mortgage in-house

·         The process is smoother

·         Sellers may be more willing to accept a lower offer.

Researchers also queried whether the agent would receive a referral fee or commission if they used the recommended broker. Half of the agents said they would, six said they wouldn’t, and seven were unclear.

A statement on the Which? website states “Many people use a mortgage broker when buying a house, and there’s nothing to say that you shouldn’t use one recommended by your estate agent. But an estate agent should never refuse to take you on a viewing just because you’re not using their in-house broker.”

Toni Ryder-McMullin

Toni is the Media Officer for Today’s Conveyancer, Today’s Wills & Probate and Today's Family Lawyer.

I worked for a law firm for 16 years, during my time at the firm I worked as a company commercial legal secretary for 7 years but changed careers and moved into marketing for the remaining 9 years – where I covered all aspects of marketing.

While in the marketing role, I achieved a CIM Professional Certificate in Marketing and CAM Diploma in Digital Marketing.

1 Comment

  • This has always happened, at least during my nearly 50 years of legal property work. It is the same with agents recommending lawyers: Purple Bricks increased its price by £300.00 because we wanted to use our own lawyer, not their tied-in one.

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