In-house broker before allowed to offer

[cheasypleasy]

Moving in from my last thread, the EA has told me that I have to speak to their in-house broker to qualify me in order to put my offer in in the best light.

I have my own broker that I want to use. He said even if I have a mortgage in principal (which I am arranging now), I will still have to speak to their broker, as he said you can get an MIP from mortgage calculators.

Is this the norm?

Coming from the other side, it took 4 offers on our house to sell it. The estate agent insisted the offer in the middle of that lot saw their mortgage broker before we accepted the offer - and it became apparent noone would lend them the amounts needed. So, in our case, the estate agent was doing their job, and protecting their client. There was no mention of seeing their brokers on the other offers (that fell through due to flaky, none finance related, buyers, and finally completed)

3 seconds 😲
They are not even hiding the fact that all of their fingers are in each other's pies urgh🙄

Very helpful thank you @Swannning. I feel like emailing and saying that whilst I organise my AIP, could you please forward my offer.

Name and shame, spread the word, stop these dirty slimy weasels getting away with it 🤬

Just email your offer to them with the MIP attached, formally worded. State clearly when you expect a response by before you withdraw. They do have to forward all offers to the owner, and if they don't then you can report to the Property Ombudsman.

You could do that using their in broker anyway. If its just to confirm you can afford it, they won't ask for proof of earnings so you can just give any figures. It is purely to encourage you to use their broker so they get a kick back.

That's the thing I was arranging my AIP from today, as I have annual leave.

So are they kind of in the right not to pass on my offer until they know that I can get a mortgage?

I still shouldn't have to speak to their broker regardless surely?

They just called me with a second viewing. I haven't replied, as now I think I should just arrange a mortgage and then go back to them.

I had this about four times last year before I got an offer accepted somewhere. The Sequence chain (Fox&Sons where I am) are particularly bad and I was forced to see their broker before I was allowed to even view despite having AIP etc.

They put it to me that it would strengthen my offer as they will have the strongest understanding of the position I am in. It's 100% manipulation but if you're really serious about the house I would play their game.

If two offers come forward with the same amount, they are going to encourage the vendor to go with the one which has spoken with their broker. They will claim it's because it's a 'stronger offer' backed up with more concrete information, but really it's so they can get commission on the mortgage. I'd hazard they'd even do this if you go for a better offer than any of their broker-confirmed offers.

It's abysmal behaviour from the EA, but ultimately I viewed it that it's an hour of your life to get the house you want. If you go for a meeting and say 'oh gosh that's actually better than I had arranged thank you thank you' and imply you will go with their mortgage broker after all (so they think they're getting the commission) you are more likely to have your offer accepted. Once that happens just go with who you want.

These dodgy tactics are one of the worst elements of the whole business, it's really appalling.

@EstherHazy Wow this is getting worse and worse! I could see this EA doing that after their manipulation of Rightmove.

It's actually putting me off dealing with them at all.

They put it to me that it would strengthen my offer as they will have the strongest understanding of the position I am in. It's 100% manipulation but if you're really serious about the house I would play their game
But aren't they just gaslighting you, speaking as if it's a seller's market when the truth is that not many properties are selling at the moment?

They said it would put my offer in "the best light."

What they mean is they get a cut if the in-house broker is able to sell you a mortgage, the oily snakes are playing both ends to the middle

Oh yes I knew it was bullshit the minute I heard it!

I'm busy contacting brokers! I'm not going to rush and get attached though, I think the property market is falling at a steady pace.

It's not ok, it's illegal https://propertyindustryeye.com/estate-agents-accused-of-adopting-illegal-conditional-selling-tactics/

@Thesharkradar That's a good observation - it held true at the time as this all really happened when I was looking last year when the market was quite bonkers. I had an offer accepted in Feb but the Fox&Sons convo (by far the worst) happened around August when it was still very much sellers market.

@cheasypleasy Absolutely - all I can say is 'store it all up' so when you come to sell in a few years time, you know which ones you want to never give your business to.

I have a list of about 5 agents I will never use because of their appalling service and outright lies.

It's definitely illegal to restrict buyers from putting an offer in whilst declining the in-house broker. It's more acceptable for your own independent broker or bank to provide you with proof of funds in a letter or email. If you ask the estate agent to put the request in writing for the broker compulsory discussion, I doubt they will.

Do you think if I challenge them on this
and tell them to put it in writing, I can kiss goodbye to the house?

I feel like going to the tenants and giving them a letter to give to the landlord. I'm so annoyed, it just adds to the stress.

@Reallybadidea very interesting article. I was aware of some of the bad practice, but didn't realise the slow market was exacerbating it.

I have name changed for this. I am a broker (over 18 years experience as a broker) and conditional selling is rife with some estate agents. Some in house brokers are excellent. Some are newly qualified and others are awful. Ask the broker when they qualified and what is their previous experience. I offer this information to clients immediately as it allows them to make an informed decision.

If there are tenants in the house it will be harder to drop a note through but I recommend you email your offer over and follow up each phone call with a summary email about what was said. ‘Dear John, Thank you for your time today, I look forward to hearing from you about xxx’.

If I were the vendor, then I'd be mightily pissed off if the agent was not informing me of offers made until the potential purchaser had seen their in-house mortgage broker. In fact I'd be absolutely livid. The agent is supposed to be acting on behalf of the vendor, not acting in its own interests by earning mortgage commission.

We are actually selling a (probate) house at the moment, so I'm going to keep an eye out.

I can only assume that they're doing this to make sure that you can make a proceedable offer, i.e. that you can actually borrow as much as you'll need to. My son's sale fell through just before exchange because his buyer actually couldn't fund her offer, so you can understand why they want as much information as they can get.

Also they're pretty likely to get commission from their broker and this adds to the profit on the sale.

If your own mortgage offer is better for you than the one their broker offers you're perfectly in order to go with your own, but if they get two offers at the same level they may well push the buyer who is going with their broker.
Obviously not strictly ethical but more profitable for them.
Some agents will recommend one offer over another because they're dealing with both sides of the sale, i.e. both sale and purchase so making more money. Not ethical but not strictly illegal. They will come up with all sorts of excuses, they have better control of the sale etc. etc.

I once effectively sold a friend's house for her because I knew someone was looking for a house in her road. The EA had told the vendor that my buyer didn't have the money to buy, but in reality the agent was looking for a buyer who was also selling through her. She wasn't even able to get a viewing.

My friend sold to my buyer who was already under offer and everyone (except the estate agent) was happy.

Think you are overthinking this a bit.

As I said up thread, if this is essentially 'qualifying you as a proceedable buyer' you don't have to take out a mortgage through them (we were not even offered that as we had an AIP from our own bank), and it took 5 minutes ("income is x, equity is y and AIP is for z" and that was about it).

Also, what I did not say was that we were looking at properties between up to our max and down to 200k lower than that (because location not property type key for us). The one we proceeded on was at the lower end and there was no issue with them trying to get 'more out of us'.

Unless you can show that you can afford what you have offered why would you expect the vendor to agree it, take it off the market, and start incurring sale costs e.g. solicitors?

Some very reasonable thinking in recent posts - on paper it's about making sure offers are proceedable, but sadly the situation is very open to abuse, and the ethics of commission / back handers is rather vague to say the least.

@cheasypleasy I really would advise against riling up the EA in any way at all - the only thing it will really achieve is giving them possible reasons against you as a buyer as they may suggest to the buyer you'll be difficult to deal with going forward.

As a seller I'd also be really wary of someone 'overstepping' even in a helpful way - I'd be thinking what else might you do once conveyancing starts?

It's rubbish, but I really would just go with the flow for the sake of getting the house you want (so have the consultation but don't actually use the broker unless they do come up with better rates).