You may have seen the recent BBC Panorama documentary, which highlighted some of the more unsavoury practices conducted by a couple of well-known national estate agency chains.
The main thing it showed is what is known as “conditional selling”. This involves the estate agent putting pressure on a prospective house buyer to use their in-house mortgage or legal services by either refusing to put an offer forward, or at least implying that the seller would not consider the offer, if they were not using these services through the agent.
To be 100% clear, estate agents are not allowed to do this!
This practice has been commonplace for a long time and has been highlighted by mortgage advisors on numerous occasions. However, this program showed that it still goes on within some estate agencies. It puts buyers in a difficult position, especially if they have set their heart on a particular property and don’t want to risk losing the opportunity to buy it, even if they don’t really want to use the agents mortgage service.
It can also be detrimental to the seller, as they may well be missing out on potential buyers who may pay a higher price for their property.
One issue that I find quite concerning is there is an obvious conflict of interest when a buyer is pushed into using the estate agent’s own mortgage service.
The agent is paid by, and therefore, works for the seller. If you were buying that property, would you really want your finances being known to the agents? Would that mean they could push the price up, knowing you could potentially afford more?
I’d like to stress that most estate agents act in a professional manner and look after their clients, without resorting to practices like these and this documentary should not reflect on them in any way.
It should also be acknowledged that this is a systemic problem within certain businesses and the individual staff shown in the documentary are under extreme pressure from the company to achieve certain sales targets.
Although this does not completely excuse the behaviour, the branch manager in the programme was unlucky to have her branch chosen, it could well have been one of many other branches of the company, with the same outcome.
Barlow Irvin work with a few estate agents and do take client referrals from them on occasion. However, we are independent of the agents, and our clients are always our priority.
We never disclose personal financial information without our client’s express consent. This maintains the distance from the agents and ensures a fair transaction, which should be beneficial for all parties involved.
Hopefully, this programme will go some way to eradicate some of the rogue elements in the industry, and we will eventually see the end of practices like conditional selling.
If you need any advice, please get in touch with a member of Barlow Irvin Financial Services award-winning mortgage experts on 01204 208 001.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.