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Original poster

pressure to use EA inhouse broker/solicitor/ mortgage

38 replies

ElleyBear13 · 11/03/2015 21:21

Evening all,

I was wondering if any housing experts (or anyone who can understand this better) would help?

Husband and I have had our offer on a house accepted, the house is on the market for 101,000 we have managed to have our offer of 98 accepted. We are first time buyers, with a provisional mortgage acceptance letter from our bank.

The estate agents then told me over the phone there is a £1,000 cash back incentive on the property, which initially sounded too good to be true but I accepted the offer to come into store to discuss the offer with them.

The £1,000 cash back incentive will allow us to secure the house for 97,000 but we must use their in-house brokers, solicitor and mortgage offers. Alongside this they will not take the house off the market UNLESS we accept the inhouse incentive (in which they'll take it off the market as soon as we sign for the mortgage process) or until the mortgage has been finalised with our own bank. They will not accept the provisional mortgage acceptance letter to take the house off the market.

Understandable however we feel very (very) worried of starting the process and another buyer offering more on the property.

If we went with our own solicitors and bank these are the charges:
£623.70 for solicitors conveyance and search fees
£250 for valuation
No fees for mortgage.

If we go with the in house EA:
£499 for lifetime membership (we can use them in the future to sell the house or get a better deal on mortgage)
£350 for search fees
£890 for solicitor fees.
£300 for valuation and fee arrangement.

The mortgage is 4.2% with our bank or the deal they were offering is 4.9% same fixed year and payback term.

Apparently its quicker to go with the in-house deal, and they'll take the house off the market as soon as we give the go ahead. This is the only reason we're tempted to go with them however we're unsure were we stand can we ask them to take it off/not accept viewings as soon as we start the process? We're worried about losing money if we start the process, the house is also perfect and we love it. Also can we ask the owners (we have their telephone number) whether they'd consider taking it off the market?

The EA are also being pushy on us going for their deal.

We have no idea whats 'normal' in house buying!

Many thanks x

OP posts:
SukieTuesday · 11/03/2015 21:28

Er, the last house we bought was take off the market the day our offer was accepted. We made it a condition of the offer.

I think they are acting against the interests of their seller if they are saying they won't take the house off the market unless you use their services.

SukieTuesday · 11/03/2015 21:35

It looks like it's a known problem.

www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10112554/We-wont-sell-you-a-home-unless-you-take-our-mortgage-estate-agents-tell-buyers.html

You might want to contact the sellers directly and ask if they're aware of what the agents are doing.

TheSingingMonkey · 11/03/2015 21:41

Both houses we bought came off the market as soon as the offer was accepted.

You don't have to use their services at all. I think it's terrible that this happens.

Original poster
ElleyBear13 · 11/03/2015 21:50

Thank you! We'll get in touch with the sellers tomorrow and let them know whats happening, I thought it was unusual when I put the offer in I asked if the sellers will be taking the property of the market but as you know the EA told us that isn't how property buying/selling is run and I (stupidly) believed this to be true.

Will be get in touch with the sellers asap! x

OP posts:
rallytog1 · 11/03/2015 22:19

You can make it a condition of your offer that the house is taken off the market. The agent HAS to pass that info on to the seller.

The agent is banking on you being naive so don't be afraid to assert yourself, or to pull out if the property isn't taken off the market. You'll probably find the agent changes their tune when they see their commission is at risk.

ZestyDragon · 11/03/2015 23:09

We put an offer in on a house on Monday and it was accepted. The house came off the market that afternoon. What the EA is doing is disgraceful and I would be contacting the vendor and any tradebody (?). What they are demanding will cost you more in the long run.

GoldenBeagle · 11/03/2015 23:18

I would tell the EA that you willl not be instructing their team as yours is cheaper, mortgage rate better and you are happy with your solicitor etc, and that it is a condition of your offer that they take it off the market.

I'm not sure that the vendor would be that worried about the EA scam from their pov, as I assume the agents and mortgage people absorb the cashback, rather than taking it off the vendor. But presumably the vendor wants your offer to proceed, so just tell them that you are ready to proceed swiftly but that your cindition is that they take it off the market.

I have insisted on that every time I have bought.

senua · 11/03/2015 23:18

A house is one of the biggest purchases you will ever make. You need to know that everything is 100% right and it is your solicitor's job to make sure of this. You want a solicitor that you appoint and trust to fight your corner - not someone forced on you by the other side in the deal.

TheSingingMonkey · 11/03/2015 23:23

What's the point of their cash back incentive deal if you're going to be paying more for fees etc?

scousadelic · 11/03/2015 23:29

DS and his GF bought their first place recently and were told there was 2 offers made so the only way to get it was to go with the in-house mortgage broker who would guarantee to get things sorted quicker as they had an inside track

When they moved they asked the seller who confirmed there had never been a second offer so they are now pursuing a complaint against the agent. As it happened they had some delays so changed their mortgage offer when the first expired to one they found themselves which was more cost-effective but it could have cost them a lot

Apparently this sort of fraud is common with some of the London agents

TreadSoftlyOnMyDreams · 11/03/2015 23:38

There was a bit of a scandal a few years back with a big EA when it was found that the in house brokerage was sharing details of the approved mortgage with the EA side of things. They were colluding to push buyers up to the limit of their mortgage approval amount.

I would run a mile from any in house service

OnBlueDolphinStreet · 12/03/2015 04:33

I did and I regret it.

You have to remember that the agent is working for the buyer and not you.

Selling you a mortgage and conveyancing services earns them a hefty commission. They will get to know all your financial business - I gave the agent my last 3 wage slips 'to copy' but he wouldn't give them back when asked so made it difficult for me to find a mortgage elsewhere. They will see the mortgage survey report that you have paid for, and may pass on a copy to the vendor. Duplicitous - not 'arf!

So, doing some very rough estimations*, based on a mortgage of £88,000 over 25 years (assuming most of the repayment will be interest at first and about £41 either insurance premium or capital repayment to start with)

An interest rate of 4.2%, gives an estimated monthly payment of £349 and total repayment of about £104,000 over 25 years.

An interest rate of 4.9%, gives an estimated monthly payment of £400 and total repayment of £120,000 over 25 years.

Not only will you hypothetically pay £15,000 more over 25 years (taking account of the cash back), but you will pay more in fees and expenses (which means that you will lose more money if you withdraw from the sale).

As a first-time buyer, you are in strong position. I would stick with the solicitor and mortgage provide you have chosen, who is acting in your interests, rather than funding the estate agent's commission and fat fees.

*I'm not connected in any way with financial services, just making rough estimates of mortgage payment for illustrative purposes. I'm sure you would be able to find on-line mortgage calculators to work out how much you would actually be paying.

Frostycam · 12/03/2015 06:26

How can you tell when an EA is lying?

When you see their lips moving.

An EA tried this sort of ruse with us - our IFA, who had arranged out mortgage, phoned them and gave them an ear-bashing.

43percentburnt · 12/03/2015 06:39

The vendor does pay for the 1000 off. there's one agent that always does this, check out their website.

It means you always know the vendor does not want asking price.

I do not know how the agent gets away with it, it has been happening for years and is common knowledge.

FishWithABicycle · 12/03/2015 06:48

Do not go with the EA's services - and make sure that the buyer is aware that the EA is jeopardising the sale like this. Be prepared to walk away if you have to - there will be other houses and no house is worth being so utterly screwed over as this.

Fugghetaboutit · 12/03/2015 06:53

Where are you buying a house for 101,000 is all I want to know!! Smile

Azquilith · 12/03/2015 06:57

You've offered very close to asking price. I've just sold in S London as was delighted to get close to asking price as I think things have slowed a tad. I think you'll find the vendor will be desperate to get the sale through.

GoldenBeagle · 12/03/2015 09:09

Yes, as a FTB you are in a strong position - everyone wants a ftb or a cash buyer.

Lucy61 · 12/03/2015 18:35

I could have written this two months ago. Say no and if you don't get a firm acceptance then you will consider your offer declined and let the agent know that you will be putting a note through the vendor's foot.

Lucy61 · 12/03/2015 18:36

Door, not foot! Shock That would be assault!

OliviaBenson · 13/03/2015 06:45

No no no no no!! And wtf is that lifetime membership nonsense. The whole thing stinks. You'll be lumbered with a more expensive mortgage.

I'm not sure if there is a body you can complain to, this seems very dodgy.

Original poster
ElleyBear13 · 13/03/2015 08:06

Morning! Spoke to the vendors who told us they'll be going with the advice of the EA (ie not taking it off the market) but will let us know if they get another offer. We've spoke to our solicitors who like yourselves are worried and abit perplexed by the whole situation. They're going to speak to the EA for us and see if they can change anything. If not we've decided to back out and retract our offer, although we love the house all this stress with the EA isnt worth it. :(

OP posts:
eurochick · 13/03/2015 08:13

The vendor is being silly. He or she is worsening his own position in order to bolster the agent's fees. The agent is working for them - not the other way around! In your shoes I would go back and repeat your offer and that it is conditional on the house coming off the market. Send it both to the EA and the vendor direct. If they keep up the nonsense, walk away.

OnBlueDolphinStreet · 13/03/2015 08:14

Tell them their estate agent's advice stinks!