Broker charging £500 flat fee AND also receiving £1,732.50 in commission

[GoldPlayer]

As it says above. Would I be an idiot to agree to this? Surely it's one or the other

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When you say broker do you mean estate agent?

I'd normally expect one or the other. Is the £1732.50 a % of your property value including VAT? If so, your property must be on the market for around £145k (if my mental maths is right) so maybe the agency charges the flat fee for properties under a certain value.

Are the fees chargeable if the property goes unsold?

Have you asked for other agency valuations and costs?

Sorry no, independent mortgage broker for a remortgage

Also, stop bumping your own thread twice in 4 minutes.

Sorry !

That fee sounds incredibly high for a mortgage broker. Normally they are way less than a % point. How big is the remortgage? Have you sought alternative advice?

Suppose it depends on how good a job they have done and how much money they are saving you.

If they have managed to achieve the near impossible that no other bank or broker can then maybe they are worth it.

You always have the option of going somewhere else.

Remo is £525k
The illustration shows that the broker will receive £1,732.50 in commission from the lender (BMS) and in addition I pay £500 flat fee
It's not a specialist mortgage or anything no
I guess I should just ask the broker, but it feels a bit awkward and rude. I suppose I need to just bite the bullet and ask!

No, that’s normal for a paid broker. You pay the 500 and the bank pays them the lion’s share, so what’s the problem?

There are free brokers that only get the amount from the bank, and they are like factories, so you take a risk with customer service levels.

That sounds really high!

Unless it’s an incredibly complicated remortgage, or very poor credit or similar, I’d say you need to look elsewhere!

Patience!

Yes that's how it works.

Appreciate the insight, thank you @KievLoverTwo
There's no issue, I just don’t know what I don't know

Fairly standard in the industry. I'm a mortgage broker and my Company's T&C's state we charge a fee for the initial advice & then collect commission from the lender. Fee is £495 I believe but I've never charged it as I feel the commission is enough itself.

However, it does all depend on how much commission is being generated. Almost all lenders pay 0.4% of the loan amount as commission, so in your situation it should be £2,100. £1732.50 comes out as 0.33%.

Is this a remortgage to a new lender or simply moving onto a new product with the same lender ? Product switches generally pay less - normally between 0.2%-0.3%.

The commission sounds about right for a high LTV loan on a house of a value of around 300-400k, as does the buyer’s fee.

Or a more expensive house with a lower LTV. I have seen several similar amounts quoted by paid brokers for houses in scenario A. So yeah, those are normal fees. Paid brokers get paid twice and are meant to build up a personal relationship with the client that lasts decades, hence charging.

We have dealt with about four of each and I have been no more impressed with the paid brokers than I have the free ones though.

Normal. Don't use a broker if you don't want to pay them.

I've always paid £500 to my broker.
Worth every penny and no skin off my nose if my lender pays him too

Thank you @Biggaybear It's 75% LTV on a £525k valuation remortgage with a new lender

So the mortgage is not £575k then, more like £390k......which would be commission of 0.45%. Standard for BM Solutions.

You could ask your broker to refund your £500 on completion. At this stage they are doing a lot of work (collecting documents, checking your ID, inputting your application and then chasing the lender etc) without getting paid a penny. The application could be declined or at the last minute you might decide to stay with your existing lender & the broker's done all that work for nothing.

We recently (2022) used a broker for a house move and there was no fee to us, just the commission.

Forget the commission, it’s irrelevant to you. You must have been aware of the £500 broker fee before you instructed them?

Our wasn't a "factory" either was a locally recommended one in our town. I can send details if OP wants to PM me

I've remortgaged a few times with the same broker, and in some cases, when we’ve just switched with the same company, he’s refunded the £500 fee since it was less work. I understand there’s more work involved this time, and I’m happy to pay for it. However, I want to make sure everything’s fair—I am not too clued up about the industry

Some brokers charge more, some less, some none at all. Most only charge on offer.

My broker charged £500. Due to the length of time the move took, the rate dropped twice in that time. He automatically redid the offer, which saved me a considerable amount more than his fee. He was always there to answer my questions, however trivial.

My previous move, I used a fee free brokerage, never spoke to the same person twice and had to ask when the rate changed. Come to think of it, I had to chase up the initial offer as well, whereas my new broker got everything sorted in a couple of days