Why You Don’t Have to Use an Estate Agent’s In-House Broker

Many buyers and sellers are unaware of the options available to them when purchasing or selling a property. One of the most common misconceptions is that using an estate agent’s in-house broker is a requirement. Imagine this scenario: you have put in an offer, spoken to independent mortgage advisors and obtained an agreement in principle for the house price, only to be told you need to use the in-house mortgage brokers. However, you should never feel pressured, and you are under no obligation to use them despite what they may tell you. If you make an offer for a property, the estate agent must put it forward to the seller whether you use their brokers or not.  If they don’t, this can be called conditional selling.

In this blog we will discuss the pros and cons of using in house brokers and reasons why you may wish to consider alternatives.

What does the law say?

Conditional selling by an estate agent is an illegal practice. Conditional selling can take many forms such as agencies not presenting your offer to the seller, having offers less likely to be accepted or being told the buying process will take longer than if you weren’t to use their in-house mortgage brokers.

While estate agents have the right to check you’re a qualified buyer, there are clear regulations outlined in the Estate Agents Act of 1979 that stipulate that all offers should be presented to the seller. This ensures the estate agency acts in the best interests of the buyer and seller.

Potential drawbacks of using an in-house mortgage broker

While there may be some benefits to using an estate agent’s in-house broker, there are some drawbacks that you should consider when evaluating your options. These include:

• Limited Lender Choice:
  In-house brokers may only work with a limited number of lenders, which could result in you missing out on better rates or more suitable mortgage products from a wider pool of lenders.
• Possible Conflict of Interest:
  Estate agents may have incentives or commissions tied to using their in-house brokers, leading to a potential conflict of interest. This could influence their recommendations, even if another broker would better serve your needs.
• Lack of Transparency:
  The relationship between the estate agent and the in-house broker may not always be fully transparent, leaving buyers and sellers unaware of potential financial arrangements or commissions being shared.

What happens if you’re feeling pressured

Unfortunately, there are estate agents out there that may make you feel like you must use their services. However, knowing your rights and the law helps when dealing with these situations.

Remember it’s your choice to use their recommended broker or your own preferred broker. If you feel like you’re being pressured to use their in-house option, you can remind them that conditional selling is illegal, and that they are in breach of the Estate Agents Act 1979. If you are already using an independent broker, you could get them to deal with the estate agent on your behalf, as they will act in your best interests and be more experienced in having these difficult conversations.

If they continue to behave unethically you may wish to consider reporting them to The Property Ombudsman.

How to choose the right broker for you

Whether you choose an independent broker or the recommended estate agency broker, take time to do your research and evaluate all your options. Buying a property is a big decision so using a broker that acts in your best interests is important. Here are just some things you can do:

• Read reviews – a tonne of negative reviews is often a good sign to consider another broker.
• Check their market access – ask brokers which lenders they work with or if they have ‘whole of market’ access. If they have limited market access, they may not find the most suitable deal for you.
• Experience and expertise – verify that they are on the FCA register and they have the right expertise in providing mortgage advice. Don’t be afraid to ask questions to ascertain their knowledge.
• Fees – make sure you understand what you may need to pay and what commission they receive from the outset.

At Connely Roberts Mortgage Services, we are experts in contractor and self-employed mortgages. Read our blog on choosing the right contractor mortgage broker for more guidance.

Ultimately, buying a property can already be a stressful experience and you shouldn’t have to deal with estate agents that are not complying with the law and making the process more difficult for you. We work with our clients to make it as stress-free and smooth as possible and understanding your options and the law from the outset will help you make an informed choice, and one that is right for you. Want more guidance on conditional selling and what to do if you find yourself in this situation? Contact us today.