Do I have to use the Estate Agents Mortgage Broker?

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The very simple answer to this is No you do not.

Estate Agents have a duty to their customer (the seller) to ensure you are in a position to proceed with the purchase.

This process has no specific guidelines, it could be a case of seeing a copy of a Decision in Principle (also known as a DIP/AIP/Mortgage Promise) and proof of deposit.

Some estate agents have tried to use this requirement to their own advantage and use it to up sell. An example of that is having their own in house broker. There is nothing wrong with that, there are reasons why you may not want to use their in house broker – a good example being that the agents job is to get as much money for the house as they can. If you divulge everything to their in house broker, they then know how much you can afford and can use this against you when negotiating a purchase price.

However, some Estate Agents go a step further and try to coerce/force you to use their in house Mortgage Broker – simple phrases like “our vendor would prefer to sell to someone who uses our broker so we can manage everything internally” could make buyers feel like they stand a better chance of being accepted if they use the agents broker. This is wrong.

To prevent that from happening, you have the “Estate Agents Act 1979” to stand behind, more specifically these sections quoted below from this document on page 8.

Misleading statements It is illegal to mislead buyers or sellers in any way. In particular, you must not:

– give misleading information about the existence or status of any potential buyer – for example, advertise or state that you have potential buyers unless you can prove that this is true. Remember that a statement that is factually true can be presented in a misleading way. You must take care to avoid this.

And also

Avoiding bias You must not discriminate against potential buyers because they don’t want, or might refuse, to take services from you or a connected person, or someone from whom you or a connected person may receive financial benefits. For example, you must not:

refuse to provide information about property to these buyers

take longer to forward property particulars to these buyers than to others

make additional requirements of these buyers as a condition of passing on an offer – for example, make them have a mortgage survey before you will pass on their offers.

All of this can be reported the the Office of Fair Trading.

One way that an Estate Agent can confirm you are in a position to proceed is to speak to your Mortgage Broker. We often have a conversation with Estate agents at the outset to confirm we have seen your documents, credit reports and have a factfind completed and can confirm you are good to go as soon as the vendor and yourself agree a purchase price.

If you would like to have a conversation with us to see how we can help you with your purchase, do please get in touch where we will be happy to discuss everything through with you.