Home buyers, your consumer rights and how to get your offer accepted

Jul 6, 2021

This past year has been crazy in the property market with demand for properties far outstripping supply, so being able to get your offer accepted is no mean feat. Due to this competitivity we are finding more client’s than usual are being ‘asked’ to use the estate agents broker to help get their offer accepted…

“Do I have to use the estate agent’s broker/solicitor/surveyor?”

We get asked this a lot and the reason why is simple. Estate agents tell a lot of potential home buyers their in house broker must be involved. Most commonly they provide the following type of explanation as to why

“Our duty is to ensure the best interests of our client, the seller, and therefore, we need our broker involved to ensure the validity of any offer being put forward to the seller’

Often, this is accompanied by other incentives such as being offered a viewing sooner you agree to speak with their mortgage broker.

But, is this true?

Can the estate agent dictate you need to use their in-house services, be that a mortgage broker or solicitor?

Here is the estate agents code of conduct (specifically section 9c)

9c By law you cannot make it a condition of passing on offers to the seller that the person wanting to buy the property must use services offered by you or another party.

You must not discriminate, or threaten to discriminate, against a prospective buyer of the seller’s property because that person declines to accept that you will (directly or indirectly) provide related services to them.

Discrimination includes but is not limited to the following:

-Failing to tell the seller of an offer to buy the property.

-Telling the seller of an offer less quickly than other offers you have received.

-Misrepresenting the nature of the offer or that of rival offers.

-Giving details of properties for sale first to those who have indicate they are prepared to let you provide services to them.

The answer is simply no. Estate agents, by law, cannot dictate or even insinuate that the success of your offer would depend on use of their ancillary services.

What are they likely to say?

Alarm bells should start ringing if you hear phrases such as:

“We need offers vetted by our mortgage broker.”

“The seller has requested us to accept offers from buyers using our in house services”

“ Potential bidders using our in house mortgage broker will have access to property viewing sooner” This is also known as the ‘hot buyer’s list’ Strangely, this service is not advertised by estate agents anywhere…

All of these practices are in direct contravention of the estate agents code of conduct.

So, why is this commonplace?

Because it is difficult to prove, few members of the public record their phone calls. Additionally the phrasing is normally just within ‘plausible deniability territory’.

What can I do?

Well, there is one simple answer really. In the famous words of Denzel Washington in Training Day ‘It’s not what you know, it’s what you can prove’. Ask them to email confirmation that they need you to use their services.

How can I get myself in the best position to make an offer?

Buying a property can feel like a bit of a ‘chicken and egg’ situation. However, you will benefit greatly from getting your ducks in a row. That’s enough poultry for one day.

Speak to a broker. A reputable, independent broker who has experience og helping clients like you.

Get them to figure out how much you can borrow, your costs of purchasing, your deposit left after covering those costs and therefore the maximum property price you can go up to.

Get them to run the costs of borrowing, interest rates, fees, payments, so you know not only what you are able to borrow, but that you would be happy with the payments and costs.

Get them to check your documents. ID, address, bank statements, income proofs, deposit and credit reports. A mortgage broker’s advice is very feeble until they have seen your documents as this is what the lender will use to approve your full application when the time comes.

Have them obtain an agreement in principle (ideally with a lender offering a ‘soft’ credit check), this will help put you at the front of the queue when offering on a property.

How do I find a good broker?

In the olden days, you would need to kiss a lot of frogs to find a prince. These days the internet has done a lot of this for you.

Google, Trust Pilot, Feefo, Unbiased, Vouchedfor, all show previous customers experiences.

However, all of them are subject to outside influence unfortunately.

Watchdog have previously reported about third party companies writing fake Trustpilot reviews for companies, in return for payment and also that negative reviews could potentially be deleted.

The consumer’s association, Which?, have also reported similar issues with Google reviews, though they cited that this was more difficult to achieve.

Our advice is to cross reference as many review platforms as you can. If a broker has brilliant Trustpilot reviews, but looks awful on Google, there is probably something going on.

What other things do I look for in a broker?

Firstly, you want them to cover as much of the market as possible. Despite the term ‘whole of market’ being commonplace and well accepted, certain lenders simply don’t deal with mortgage brokers, making the term misleading.

A simpler method is to just check how many lenders the broker has access to. A good broker will normally have access to over 60 and often this could be 90+. That said don’t get too hung up on this. If you find someone you get on with and they have a great reputation, don’t dismiss them. Particularly if you have straight forward circumstances. Around 85% of the UK’s mortgage business is often done with 10 or so lenders anyway!

Website content. If you have a specific challenge in your circumstances such as adverse credit, self employment, look for a broker that has specific content about this on their website that strikes a chord with you. This indicates this is something they understand and deal with frequently.

We have had a number of clients battling with estate agents ‘suggesting’ to use their in house broker in recent months. We have written another blog here on how we helped a client in this situation and transformed this clients home ownership possibilities by using us.

Steven Morris – Advising Director

CeMAP CeRER

 

Steve loves a complex mortgage. Most recently he has used his technical geekery to work his way up through Which? Mortgage Advisers, progressing to Senior Adviser and then Onboarding Manager. There, he was responsible for hiring, training and managing new advisers.

He also ran the monthly new starter inductions and wrote and maintained the telephony advice standards of the company. Outside of work Steve can be found coaching and being run ragged by his local under 10’s rugby team, Bristol Harlequins RFC.

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