It’s not uncommon to find yourself in a situation where you’ve finally found your dream home, made an offer that’s been accepted, and are then told that you need to speak with the estate agent’s mortgage advisor. So, what should you do?

Whilst an estate agent may suggest that you use their mortgage broker if you’re buying a property through them, it’s actually not a requirement. In fact, it’s illegal for them to insist that you use their recommended mortgage broker.

As the buyer, you have the right to choose the mortgage broker that you feel most comfortable working with, and the estate agent cannot present.

What are the rules about having to talk to the agent’s mortgage adviser?

The Estate Agents Act of 1979 requires all offers made by buyers to be presented to the seller, regardless of whether or not the buyer uses the broker recommended by the estate agent. So, no matter which broker you choose, your offer will still be referred to the seller.

How should estate agents ‘qualify’ your offer?

Most Estate Agents have their own mortgage advisors who work in-house. As a buyer, you should know that estate agents are allowed to take reasonable measures to verify your ability to proceed with the purchase, which may include requesting to see an agreement in principle or proof of deposit. However, it’s important to note that you are not obligated to speak with the estate agent’s mortgage broker unless you choose to do so.

If the estate agent has any further questions about your financial situation, they may ask for your consent to check with your mortgage broker. This can help them to verify your ability to proceed with the purchase and ensure that everything is in order.

Do you need a mortgage broker when moving home?

While it’s not essential to use a mortgage broker, they can offer a lot of benefits. One of the biggest advantages is that they often have access to a wide range of lenders and deals that you may not be able to find on your own. This means that they can help you find a mortgage that is tailored specifically to your needs and financial situation.

Buying a home is a big investment, and it’s important to make sure you get the right mortgage advice. Working with a mortgage broker can help you navigate the complex mortgage market and find the best deal for your circumstances. They can also help you with the paperwork and ensure that the mortgage application process runs smoothly.

Advantages of using an independent mortgage broker instead of the estate agency ‘in house’ advisor

Here are some benefits of using an independent mortgage broker over an estate agency mortgage broker:

  • Personalised service: Because independent mortgage brokers work for you, not the lender or estate agency, they can provide personalized service and take the time to understand your needs and goals.
  • Greater expertise: Independent mortgage brokers often have more expertise and experience in the mortgage market, allowing them to provide more comprehensive advice and guidance.
  • Privacy: Using an estate agency mortgage broker may mean that your financial information and details of your offer are passed on to the estate agent, potentially compromising your privacy. An independent mortgage broker will keep your information confidential.
  • Limited panel of lenders: Estate agency mortgage brokers may only have access to a limited panel of lenders, which could mean that you miss out on better deals or more suitable products for your needs.

How to choose a mortgage broker

Here are some tips on how to choose a mortgage broker:

  • Ask for recommendations: Start by asking friends, family, and colleagues for recommendations. They may have worked with a mortgage broker in the past and can offer valuable insights and advice.
  • Check online reviews: Look up potential mortgage brokers online and check their reviews on websites like Google and Trustpilot. This can give you an idea of their reputation and the experiences of other clients.
  • Trust your gut: Ultimately, you want to work with a mortgage broker who you feel comfortable with and who you trust. If you have any doubts or concerns, it’s better to keep looking until you find the right fit.

Speak To an Expert

Whether you’ve just had an offer accepted on a property and you’re ready to go, or you’re simply wondering how much you need to save for a deposit, it’s never too soon to reach out.

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What should I do if the estate agent is adamant I use their mortgage adviser?

If an estate agent insists that you use their recommended mortgage broker, it’s important to know that this is actually illegal and they are in breach of the Estate Agency Act of 1979. You have the right to inform them of this and ask that they put their insistence in writing.

To handle this situation effectively, you may consider asking your independent mortgage broker to phone the estate agent to discuss the matter, as they will likely have experience dealing with similar situations.

The estate agent won’t let me view the property

If the estate agent refuses to let you view a property because you haven’t spoken to their mortgage broker, they are in breach of the 1979 Estate Agency Act.

You are well within your rights to make a complaint, and if you’re feeling brave, you could even knock on the property yourself and inform the seller. The agents are not only breaking the law but also doing a disservice to the sellers.

What else can I do to increase the chances of getting the property?

Here are some points on what you can do to increase your chances of getting an offer accepted:

  • Have an up-to-date agreement in principle: from your mortgage lender, which shows that they are willing to lend you the amount you need.
  • Have a solicitor lined up and ready to go: so that you can move quickly if your offer is accepted.
  • Have all the necessary documentation ready: such as proof of identification, proof of address, and proof of deposit. This will help to show that you are serious about the purchase and that you have everything in order.
  • Be prepared to act quickly if your offer is accepted: This may mean being available to view the property at short notice or being ready to exchange contracts and complete the sale within a tight timeframe.
  • Consider offering the full asking price or a higher offer if you can afford it: This can make your offer more attractive to the seller and increase your chances of being accepted.
  • Be polite and courteous when dealing with the estate agent or seller: Building a good rapport and showing that you are a serious and reliable buyer can go a long way in helping your offer to be accepted.

What happens next?

Here are the next steps once your offer on a property has been accepted:

  • Instruct a solicitor: You will need to instruct a solicitor or conveyancer to handle the legal side of the transaction. They will handle the transfer of ownership and all the legal paperwork.
  • Get a survey: You should get a survey done on the property to check for any potential issues or defects. This will help you identify any repairs or maintenance that may need to be done in the future.
  • Finalise your mortgage: If you haven’t already done so, finalize your mortgage by providing your lender with any additional documentation they require. This will include your proof of income, bank statements, and ID.
  • Exchange contracts: Once your solicitor has completed all the legal work, you will exchange contracts with the seller. At this point, you will need to pay a deposit, usually 5-10% of the purchase price.
  • Completion: On the agreed completion date, the remaining balance of the purchase price will be transferred to the seller’s solicitor, and you will officially become the owner of the property. Congratulations!

Investigations into estate agent’s forced selling of financial services

There have been various studies and reports about estate agents forcing or strongly recommending financial services to home buyers in the UK. Here are some examples:

A 2019 investigation by the consumer watchdog Which? found that some estate agents were not providing potential buyers with adequate information about the fees they earned from referring them to in-house mortgage brokers or conveyancers. The investigation revealed that, in some cases, estate agents were recommending these services without disclosing the financial arrangements behind them.

A report by the HomeOwners Alliance found that many estate agents were overcharging for conveyancing and mortgage services. The report also highlighted that estate agents were often incentivised to refer buyers to specific service providers, which could lead to conflicts of interest.

The Financial Conduct Authority (FCA) has also expressed concerns about estate agents recommending financial services to buyers. The FCA launched a review of the mortgage market, which included looking at the role of estate agents in the sale of financial products. The review found that some estate agents were providing inadequate advice to buyers and that there was a lack of transparency about the fees earned from recommending financial services.

These studies suggest that there are issues with estate agents recommending financial services to home buyers in the UK and that there is a need for greater transparency and regulation in this area.

For more info on choosing a mortgage broker, please contact a member of the Strive team, by emailing [email protected] or call us on 01273 002697.