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Original poster

can estate agents insist we see thier IFA?

29 replies

oops · 16/05/2006 23:10

We are putting our flat on for sale with the estate agents who are selling the house we want to buy.

Today we made the final decision to go with this agent, so instructed them to sell the flat and we made an offer on the other house.

I can understand that they won't really entertain the offer until we are under offer, but we jsut want to show we are interested, but what I don't really understand is that the agent seems to think it is ok/going to happen that I meet their "IFA" to discuss whether or not we can afford it before they pass it onto the vendor
WTF?????
anyone else had to do this??

OP posts:
Freckle · 16/05/2006 23:23

As far as I know, they are not allowed to insist and it is against the rules of their governing organisation for them to link the two issues. However, not all estate agents belong to the governing body (which only has advisory powers anyway).

marthamoo · 16/05/2006 23:32

This happened to us, when we were buying our first house - mainly because we hadn't a clue. The Estate Agent (selling the house we were interested in) said they wouldn't put our offer to the sellers unless we spoke to their financial adviser first (we already had an approved in theory mortgage from a building society). Reason given was that they couldn't be sure we had the financial wherewithal to back up any offer (er, duh, we had it in writing...). We went along with it and they tried to flog us an endowment mortgage (this was in 1995 - they knew by then that endowments were a big no-no).
We almost went with an endowment but, thankfully, the house fell through and we got better advice from a work collegaue's friend.

These days I'd have the chutzpah to say "I think your client might be interested in the fact that you are refusing to tell them about the offer on their house until you've tried to flog us one of your mortgages..."

Long way of saying you are under no obligation to meet with their IFA. Think about it: they're selling your flat, they're selling the house you want to buy, if they can earn commission on the mortgage you choose as well they're quids in. You can tell 'em to get stuffed - or you can meet with their IFA (make sure s/he really is independent) but you are under no obligation to go with them at all.

LIZS · 17/05/2006 12:29

No I'm sure they can't . They are obliged to pass on any offer to vendor but doubt it would be taken seriously until you have sold yourselves or can prove you can bridge. However it has nothing to do with their IFA unless you so choose (same with a tied in solicitor). Personally would avoid using any EA doing this.

GDG · 17/05/2006 12:30

No.

katzg · 17/05/2006 12:32

i don't think you do but we did just to shut the estate agents up and the IFA came up with a fanstatic deal which when we came to change it noone could match and the person at the cell centre wanted to know where we got the deal because she wanted it!

MissChief · 17/05/2006 12:32

sorry, but they seem to see you as easy money! you have freedom of choice here so put yr foot dwon and say no! go to
www.moneynet.co.uk/

or something similar - search for yr own mortgage and can even check paymts etc in mortgage calculator. also could try building socieites like abbey, derbyshire etc - they reguarly offer best deals on the high street.

HTH

blueshoes · 17/05/2006 13:17

Saw a program on telly about dodgy estate agents. Won't name the agency (a very well known one) but their tactic was to get the buyers to use an IFA, which unknown to the buyers was owned by the same person as the estate agency. The IFA would then pass on confidential info which the buyers gave them to the EA, who despite the buyers saying they only wanted to look at houses in a certain lower price range, showed them houses which were up to the absolute limit of affordability. I think the prices of some of the houses marketed at a lower price were also jacked up to the affordability limit.

Oops, I can't stress how important it is to see an independent IFA. There will always be another estate agent who will want to earn your commission.

janinlondon · 17/05/2006 13:21

When we were selling we asked the financial advisor in the estate agents to vet the offers. He checked the facts of people's finances - asking to see the mortgage offers or any other sources of funding before we accepted an offer. Mainly because we had accepted two offers from time wasters who really didn't have the financial backing. He wasn't flogging them mortgages though - just meeting with them to check their paper work. Could that be what's going on here?

blueshoes · 17/05/2006 13:31

Oops, I read your post again. If the agent for the sellers are concerned about your ability to afford the house, can't you just get your bank/independent IFA/mortgage advisor to write a letter to say it is within your means (subject to your house going under offer)? That should be good enough evidence without your having to disclose your entire financial history (bear in mind it is incredibly tedious because you have to list all your assets and liabilities and outgoings) to the agent's IFA.

foxinsocks · 17/05/2006 13:38

you don't have to go with their IFA

if you need a mortgage and I assume you have already found out you can get the amount you need, just get written confirmation of that

last time we moved, we let the estate agent's IFA get involved as they hurried our mortgage application along where we were unable to do so. However, I am financially savvy so never felt (and never let) the IFA feel he could boss us around.

By the way, you don't have to prove to them that you can afford it - if you don't want to get that letter, you don't have to. They may be just avoiding time wasters but it sounds more like they are trying to drum up more business for their IFA imo.

arfy · 17/05/2006 13:42

no

and surely doing this would make a mockery of the 'I' in IFA standing for 'independent'?!

Helennn · 17/05/2006 14:26

As an ex-estate agent, (6 years ago now so memory a little foggy!!), I know it is absolutely not on for them to make you see their financial adviser before putting your offer forward, especially as you already have a mortgage offer in principle from elsewhere, ie as good as they could do. I honestly can't remember for sure but I think it is actually against the law and I remember a famous case being in the papers about a firm, (fairly sure it was Connells), that had been done for just this. Not sure it is a good idea to put your property on with them if this is how they behave - maybe worth ringing Estate Agents ombudsman and making double sure before confronting agent, (they would know the law to which agents have to comply, fairly sure it is called the estate agency act).

Having said that, like other posters we got our mortgage through who I worked for because they did do an exceptionally good deal that we couldn't get anywhere else, (because they do so much business with them)!!! But we chose to, and were certainly not forced!!!

Let me know how you get on

Original poster
oops · 17/05/2006 17:50

janinlondon, i think that is the jist of it as far as they are concnerend.
But i don't feel comfortable talking about finances with "thier" independant financial guy IYSWIM
we have an IFA, i have known him 16yrs so will get a mortgage thru him...
will tell them to f off I think
we put the flat on with them purely to help our purchase of the house, felt it would be better to get them on our side too tbh.
thanks for the replies. Smile

OP posts:
Original poster
oops · 17/05/2006 17:57

ooh, i love this one!

they said that we would sign a contract wqith them, and in it we would have a line to request to check our buyer's financial details before they will pass an offer on

as far as the estate agents reg body is concerned, this is legitimate.
so if our vendors of the house have asked for this (knowingly or unknowingly) then we have to be vetted FIRST before they will pass the offer on... for everyone's protection only, of course.

What weeedling, shisters they are Angry
they are really just jumped up address books in my opinion.... aghh
well, will have to see what they say tomorrow, but am considering putting a not through the door of the house and letting them know we are making an offer anyway,, could jut write to the estate agent with the offer and cc a letter to the owner... then she can decide if she wants to invoke that part of her contract with them...

ohhh and again what a pile of horribleness estate agents are, is confirming my suspicions tbh.

OP posts:
Piffle · 17/05/2006 18:02

I= Independent
If you see your won one he will charge you
BUT the IFA gets all his money by commission, so you will be offered and tol,d you need
criticl illness cover, life insurance, and extra shit you never even knew existed.
By all means go, the advice has to be sound BUT get ready to tell him to hop it and know what products you want. He will even try to get you into his best commission pension...These days many vendors/estate agents insist that you have a promise of a mortgage before being obliged to show you properties - we had this. You can get it yourself from your bank, an agreement in principal its called

Original poster
oops · 17/05/2006 18:26

I have an IFA and a good relationship with him, he will get the mortgage for us no probs.

But I was wondering about the estate agents and whether or not they can insist that i be vetted by another IFA becuase they want me to..
and it turns out they can if the vendor has put it in writing that she will only accept offers that have been vetted by the estate agents...
she may not knowshe has requested this when she signed the contract, or she may be ok with this

I have just found out from dh that this is all legal according to estate agent regulatroy body

so, i apprently have to disclose all my financial details to somebody who works closely with the estate agent beofre i can have the offer passed onto the owner of the house.
I just don't believ that their IFA is independant tbh, he can tell them we are good for the money and let them know by body languauge if it is poss to push us any higher etc or if the offer is our maximum etc.

I really really don't like this...

my IFA says he will write a note to go with the offer and apparently this should be accepted by the estate agent and vendor, but how many people haev fallen into this trap happily and ended up having the estate agent manipultate the price the vendor settles at because they had some inkling of the financial status of the buyer

when you go to tesco, they don't look in your purse and check your shopping list at the door do they??? er, how id this any differnet???

OP posts:
Orinoco · 17/05/2006 20:54

I should make your offer directly to the vendor, explaining that you are financially viable but don't want everyone knowing your business!

OldieMum · 17/05/2006 21:00

We have recently had an offer accepted on a house and this was based purely on our account of our financial situation (accurately given, I should say). Nobody mentioned IFAs, or made any other conditions. It's our solictor who needs to be clear about our financies.

OldieMum · 17/05/2006 21:00

finances

finefatmama · 17/05/2006 21:22

When we went looking in January EVERY EA in the area insisted that we see their IFA. Apparently, a lot of properties were on the market a second time as buyers made offers before trying to arrange finance. One was a repossessed property and they said that they could lose the relationship if they didnt at make sure we were good for the money.

The three IFAs we saw just asked how much we earned and how much we owed, then signed a piece of paper over the the EA. they invited us back to look through mortgages if we wanted to but none spent more than 10 minutes with us.

Original poster
oops · 17/05/2006 21:29

but i don't want to tell them how much i earn and how much dh earns, and how much we owe etc.

I have an IFA who will deal with this, at the moment i don't earn enough to pay for this house, but will return to work soon, and can top up our income massively if necessary. I can do 24hr shifts if necc and this will add up to alot of extra income. i'll only do this if necessary, however.
My IFa knows this, he has been dealing with my finances for nearly 20yr and will fight our conrer massively with mortgage companies. He has done it before and done an excellent job for me.

I could just make figures up for the estate agent guy, but why should i have to? and will he need to see payslips, because i don't have any?

OP posts:
hulababy · 17/05/2006 21:32

No you don't have too. We have our own IFAs. DH is friends with a few and we have different IFAs for different product types, depending on who DH rates best for that area. We have never paid for an IF either. They are paid through commission fromt he products they sell. However, nowadays many of the products have similar commission rates, so IFAs aren't swayed to specific products so much. Our IFAs offer share the commission with us anyway! :)

Whenever we have gotton a mortgage we have always declined the estate agents and insisted on using our own.

Twinkie1 · 17/05/2006 21:33

No No No =- they are not allowed to do this and if I were you I would threaten that you will knock on the door of the people who's house it is and tell them what they are doing as it would more than likely really piss them off!!!

hulababy · 17/05/2006 21:36

Just spoken to DH to get better clarification. He says that if you get a letter from your own IFA showing that you can afford the mortgage, then this is sufficient. This is the approach we do every time. If you do this then they cannot insist you see their IFA.

edam · 17/05/2006 21:41

Think their contracts stink and are clearly an underhand way of getting business. Bet the buyer has no idea. If I were you, I'd call Trading Standards just to see if this is OK - estate agents body may say one thing, but trading standards are the experts.

Suspect this is just a way for them to get round the legal requirement to put all offers to the owner. Dodgy estate agents used to hide offers from people who were selling their own houses through other agencies, or hide offers if they wanted to buy the place themselves. A bit more difficult these days. But this extra hoop they've created could be a way to achieve the same ends without being found out.