Access FS launches letter campaign to help counteract estate agents undercutting brokers
Access Financial Services has launched a support campaign to give brokers the tools to fight back when estate agents put pressure on home buyers to use their in-house mortgage broker rather than letting them use an adviser of their own choosing.
Known as ‘conditional selling’, there is still a significant minority of estate agents using what can almost be described as intimidation tactics to ensure they get the home buyer’s mortgage business as well as commission from the house sale.
Estate agents using these underhand tactics, intimidate prospective buyers that their offers will not be put forward to the seller unless they agree to use the estate agent’s in-house mortgage adviser. This practice continues despite the fact it is against estate agents’ own Code of Practice.
Other than for financial qualification it is a breach of The Property Ombudsman’s Code of Practice for Residential Estate Agents to enforce a conditional sale by mandating their own mortgage advisers’ services.
To help counter this, Access Financial Services has created a free letter template to support brokers who feel threatened by this illegal practice. Access has designed the letter to be sent initially to the estate agent making them aware of the various parts of the Code that demonstrate this practice is against the law. At this point the broker can also provide the necessary financial qualification if required, including both a Decision in Principle certificate and proof of deposit funds to prove that their client can afford the house purchase.
If the estate agent either doesn’t respond or continues to pressurise the client, then Access FS advocates the broker then reports the estate agent to the Property Ombudsman. This will need to be done with evidence of the breach, including the letter that had been sent to the estate agent and one from the client describing the pressure they have been put under.
Karl Wilkinson, CEO of Access Financial Services said: “Our own brokers have experienced the effects of this conditional selling by a minority of estate agents. It can cause clients distress and at times it prevents clients from being able to work with brokers they have a long-standing relationship with.
“As well as helping our own advisers we wanted to offer our support to others in the industry who continue to suffer from this dubious practice. Now more than ever, as we head into recession, it is important for both brokers and estate agents, to support each other so that buyers can benefit from the best advice.
“We often hear estate agents claim the need to financially qualify a buyer despite that buyer already holding an Agreement in Principle. While it is completely legal for estate agents to endorse the use of their in-house mortgage adviser, it is illegal for them to insist that a client uses them.
“While the majority of estate agents operate within the Code and have a positive relationship with many mortgage brokers, it is time we stamped out the bad practice of the few who damage things for the rest. Our letter templates are a step forward to help accomplish this.”
The Estate Agents Act 1979 clearly states that every offer must be put forward to the seller irrespective of whether the buyer has obtained their mortgage from a broker recommended by the estate agent, or a broker personally engaged by the buyer.