Mortgage brokers and conveyancers - is this normal?

[Fifthtimelucky]

My daughter has just had an offer accepted on her first flat. Exciting times ahead and I am helping with advice.

Two things have surprised me so far:

1. The mortgage broker recommended by the estate agent charges clients about £500. I assumed they were always paid solely by commission from the lender. The broker my daughter confirmed that she was paid by the lender too.

2. the estate agent also recommended that both my daughter and the sellers use the same firm of conveyancers. I'd have thought that could involve a conflict of interest.

Am I just out of touch? Are these now normal?

I'd definitely agree with you on point two.
Dc1 recently bought through shared ownership so first had to go through a specific broker (to qualify for the scheme) was told if wanted to get a mortgage through them it would be £500 (the emails small print also said they got a payment from the bank too). The broker was not very thorough on the advice (I didn't think). So I asked dc to get a second opinion from someone else and got a totally different advice (in my view better advice) and went directly with that building society. I'd definitely recommend shopping around and taking on board different advice.
Estate agents brokers are not always the best (don't always have whole market acess). Dc1 had a meeting with one was bombarded with information /phonecalls then they went quiet, 3 months after moving they rang to see if needed a mortgage still. Absolutely useless.

Thanks.

Daughter has a Lifetime ISA and the organisation that is with (Moneybox) offers free advice from a mortgage broker so she is talking to them today. She has also done some research direct with various lenders so if neither broker can come up with anything better, she will go with a lender direct I think.

I would advise using a mortgage broker that doesn't charge a fee but gets paid on commission. There are lots of them and they're just as good as brokers who charge a flat fee.

It just protects you in case the house sale falls through, because you'd still have to pay the fee.

As for the conveyancer, advise them to get recommendations from friends etc. because a slow or incompetent conveyancing solicitor makes the process so much longer. I would ignore the estate agent's suggestion.

I wouldn't use the same conveyancer as the sellers. We were turned down by our local solicitor for our last house purchase as it turned out that they were representing the sellers and naturally didn't want a conflict of interest.

You are right, your DD should not be paying the broker a fee, they will be getting their commission from the lender. If she queries it or says she will look elsewhere to use one who doesnt charge a fee, they will more than likely offer to waive the fee.

I wouldn't use a conveyancer personally, we did years ago and it was so slow. Use a solicitor, and no, I dont think the same one for seller and buyer is appropriate. Sounds like the EA is getting a few back handers but your DD is within her rights to use whomever she wants.

If that were my daughter I would be advising her to use a broker that doesn’t charge fees like L& C and to find her own conveyancer/solicitor.

The estate agent is taking advantage of your daughter and possibly the seller too. They gain commission if your daughter uses the firms they recommend. That is why they are making the recommendations! Sometimes they can be very pushy because they want more £££. Please tell your daughter to be firm with them.
She needs to research mortgage brokers and conveyancers herself and choose an independent one that is acting solely for her and not for the estate agent or anyone else. Ideally, she should already have a mortgage advisor because she needs to already know how much she can afford to pay and borrow. Some conveyancers do charge an upfront fee, some get paid solely on commission.

Thanks all. Glad it's not just me being wary of this.

My daughter has now had a conversation with the Moneybox mortgage adviser who was very helpful, so she is planning to use her.

She has already instructed a local solicitor. They sent a very clear and detailed estimate and a friend had a good experience of them in relation to her will. In contrast, the conveyancers recommended by the estate agent neglected to mention a number of costs in their estimate and when we asked about them (things that were included by the solicitors eg cost of dealing with the LISA) it turned out that they were much more expensive. They were quite rude when my daughter said she had gone elsewhere!

I think you mean some brokers in your last sentence @rainingsnoring

Ah well their rudeness just confirms your daughter made the right decision in going elsewhere.

I did indeed! Thanks.