Estate Agents
Is the estate agents mortgage adviser truly independent and unbiased. Do they work for you or the agents ?
When using an estate agency based adviser there is potential for a significant conflict of interest.
Homebuyers will unwittingly provide the estate agent with detailed financial information that can undermine their negotiating position. For example, if the agent knows you can afford up to £250,000 for a property marketed at, say £250,000 , it weakens your ability to negotiate a lower price. Under the guise of affordability checks, the estate agent’s adviser is likely to tell the agent that you can borrow up to a certain amount. Revealing your full purchasing power could be detrimental.
Estate agents rightly need proof of funds from bidders, but there’s a difference between confirming a buyer’s ability to purchase and knowing the maximum they can spend.
If an agency tells you that you will be in a favourable position if you use the services of an in house adviser, be very wary.
Although there are legal protections in place to address these conflicts, such as laws requiring estate agents to pass on all offers and not to discriminate against buyers who don’t use their services, the effectiveness of these regulations is nominal.
Buying a home is one of the most significant financial decisions people make in their lives. They deserve to have confidence that their adviser is free from conflicts of interest.
Popular Estate Agent Quotes Include:
- “Keeping everything under one roof is easier with one point of contact”.
- “If you use our services, it will give the vendor peace of mind that everything will go through smoothly”.
- “You need to come in and see our mortgage advisor for your offer to be qualified”.
- “Your offer is more likely to be accepted if you use our mortgage advisor”.
- “We get better deals than most brokers”.
- “Everything is likely to go through quicker if you use us”.
- “We will do all of the chasing of the solicitors for you and they’ll be more responsive to us due to the amount of work we send them”.
Remember, when negotiating a purchase price, do you really want the seller of your property to have access to your personal financial situation and potentially knowing your maximum borrowing?
Make it clear to the estate that you know the law and your rights. And the law is very clear as well. The Estate Agents Act 1979, agents “must not discriminate against potential buyers because they don’t want, or might refuse, to take services from you or a connected person.” This means agents must not “refuse to provide information about a property to these buyers, take longer to send property information to these buyers, compared to others or set additional requirements, as a condition of passing on an offer.”