Estate agents accused of breaking the law with conditional selling practices


Conditional selling practices remain a national problem among estate agents, it has been claimed.

A report in the Financial Times suggests that conditional selling by UK estate agents is actually increasing, and brokers have warned this is not ‘isolated incidents’, as individual branches have claimed when challenged.

Mortgage advisers and brokers have once again highlighted issues of conditional selling at several large chains of estate agents, particularly over the agreement in principle and a push to use in-house brokers.

According to brokers such as Lewis Shaw, of Mansfield-based Shaw Financial Services, and Jamie Lennox, director of Norfolk-based Dimora Mortgages, their clients have been threatened by various household name estate agents.

The threats are to the effect that if the clients do not use the in-house mortgage adviser to get an AIP, the vendor will not proceed with the sale.

Shaw said: “I don’t know whether it’s because the estate agencies are turning over less volume in sales a month, so they are going after additional revenue streams with such tenacity, but I’ve been seeing clients coming back to me saying they’ve been told to go in-house with the estate agencies to get the AIP.

“This is despite myself – and my fellow brokers – being qualified, regulated mortgage brokers with perfectly valid AIPs already in place.”

He said when he has raised this as complaints, he has been told this conditional selling practice was an “isolated incident”.

“But it isn’t”, he added. “If you look at any of the forums, or go on any of our mortgage broker groups on Facebook or LinkedIn, you’ll see the same estate agencies’ names popping up again and again, all over the country. Spicerhaart is one.

“Brokers are saying they’ve had clients ringing up saying that, even though they’ve already given their clients a valid AIP, the estate agency has told them the vendor will not proceed unless the AIP is done with the agency’s in-house broker.

“Sometimes they’re told that the sale will take twice as long, sometimes that the vendor will pull out. But the outcome is the same – more pressure on the client.”

He continued: “How can it be an isolated incident when I’ve been speaking with brokers in Wales and East Anglia who have all had the same experience with the same companies?”

One of those brokers is Lennox, who is based in Norfolk. He told FT Adviser he had been helping some clients secure a property near Dereham in Norfolk, and the property vendor was using a local branch which is part of a national estate agency Spicerhaart – to facilitate the sale.

Lennox said: “According to the agent, the seller needed my client to get an AIP done again from the in-house broker. The broker told my client they could not get a viewing without it.

“My client said that although the AIP we had done at Dimora was ‘good to go’, the agency delayed, so I gave my client an email to send to them and we went to Spicerhaart ourselves.

“They did eventually get a viewing of the property without the AIP from the in-house provider, and their offer has now been accepted by the vendor.

“It really did feel as if the agent was dragging their heels.”

When asked what advice is Spicerhaart giving your agents across the UK around conditional selling, a spokesperson said: “Conditional selling is unacceptable to us and we take any allegations of this nature extremely seriously.

“We have robust procedures in place to prevent this from happening. This includes mandatory training for all estate agents and mortgage brokers in the rules surrounding conditional selling.

“If we identified any issues, we would conduct a thorough investigation and would carry out retraining and take disciplinary action against anyone found flouting the rules.”

The spokesperson was also asked whether branches are incentivised to upsell or enhance the package.

They added: “Estate agency branch managers are absolutely not incentivised to drive mortgages on sales and are actively encouraged not to.

“Our internal figures show no evidence to indicate that an undue proportion of buyers are receiving their mortgages through us, in fact it is quite the opposite.

“We expect our sales people to conduct themselves in an appropriate and professional manner at all times.”

There have been several campaigns designed to help brokers manage conditional selling by estate agents, with limited success so far.

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