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Conditional selling likely to rise as transaction levels drop

ended 07. November 2022

Newspager Mike Staton of Staton Mortgages is not happy. In fact he's fuming about the latest example of conditional selling. You can read his post on LinkedIn >> here <<. Following Mike's post, UK newswire, Newspage, asked a selection of brokers for their views on conditional selling. One says he has lost two clients over the past month alone due to conditional selling and that it will become more common “as agents start to see a downturn in purchase transactions and try to maximise revenue and profit from as many avenues as they can”.

6 responses from the Newspage community

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Craig Fish
Director at Lodestone Mortgages & Protection
Unfortunately conditional selling is an all too regular occurrence, and it seems to be getting worse. I fear that more is to come as agents start to see a downturn in purchase transactions and try to maximise revenue and profit from as many avenues as they can. There is nothing wrong with agents recommending mortgage advisers that they work with, but to not put offers forward unless a client speaks with the agent's broker, is disgraceful, dishonest and illegal, and it needs to stop. This has happened to me twice in the past month alone, and on both occasions I lost the client as they felt pressured to use the agent's broker. What made this worse was that the agent's recommendation didn’t fully take into account the client’s circumstances and when the client challenged them they were asked what mortgage I had proposed and then offered it. Estate agents need much stricter regulatory control, otherwise their underhanded ways will continue to get worse. The people that suffer are ultimately the people who the agent is supposed to be acting for. If only they knew the tactics and shenanigans that went on in the background. In many cases it’s the corporate estate agents that act like used car salesmen and it’s these agents that give the rest a bad name, which is a shame because there are some really good ones out there.
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Kylie-Ann Gatecliffe
Director at KAG Financial
After thirteen years advising, a lot of things have got better in our industry. Estate agents and conditional selling is not one of them. If anything, it is getting worse. I've lost count of the number of my clients this year who, even though they already had a Decision in Principle from us, have been told by agents things like "Your offer will only be put forward if you use our broker" or "Our broker needs to qualify you to make sure your Decision in Principle is ok". Not forgetting the clients who have come to us after being told by an agent's broker that they can't actually get a mortgage, or have lost out on a property because they were told they couldn't use another broker. Thankfully we educate our clients on this situation, a lot of them ahead of viewing, so they know what to expect. We saw the most severe case of this a few months ago, where the agent told the client that if they used their broker they could potentially get a further 10k off the property. To a client, this puts them under immense pressure and I feel when clients are making huge financial decisions they should be in a position where they get to choose the adviser they work with based on service and trust, rather than be pressured by agents and their in-house brokers.
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Mike Staton
Director at Staton Mortgages
While all estate agents are not guilty, a lot are. In my experience, the big corporate firms are the biggest culprits. Forcing clients to see their in-house broker or use their in-house solicitor can can be detrimental to a client, but is also an illegal practice. Estate agents have a very good knack at pretending to be regulated and qualified, when in fact, many are neither. If Man City played Man United, I wouldn't want a Man United fan refereeing the match. How on earth can they be impartial? That's the same as in-house brokers. As somebody who worked for one of the largest estate agency groups in the UK, I can confirm the pressure I received from branch managers to disclose affordability was huge, and lesser brokers would have buckled under the pressure. Whilst it is ok to say that estate agents have an obligation to verify offers and anti-money laundering laws, if a client has already seen a broker, this has already been done, so they are simply creating more work and making things more stressful for the client. I own an estate agent so I can speak with both caps on. I am happy to confirm that my agency puts no client in front of our own brokers that do not want to be sat in front of them. The brokers that allow this to happen also need to be held accountable. Even though it would affect my own estate agency business, I believe no buyer should be able to use an in-house broker as it's impossible to be managed managed by the FCA. How can anyone in these circumstances say they truly have the client's best interest at heart? Dealing with estate agents who uses these underhand tactics is a royal pain in the derriere.
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Imran Hussain
Director at Harmony Financial Services
The problem seems to be getting worse, but this was inevitable as the property market starts to slow and transactions drop off. The pressure from management in corporate estate agents must be coming down thick and fast and every penny counts, hook or by crook. Not enough has been done to stamp out this practice and until it is, it will continue and the only person who loses out is the client. It makes a mockery of the house buying process and most agents who are doing this have a terrible proposition and inflated protection premiums.
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Elliott Benson
Owner at Sett Mortgages
I come across conditional selling at least once a month. The most notable examples are clients being told they must be "qualified" by the estate agency's in-house adviser even though they have spoken to myself and have proof of funding already. Unfortunately, nothing is done to combat the problem. Fortunately I can advise clients on how to deal with these situations but many buyers will feel that unless they comply, they will lose out on the properties they want. There needs to be closer monitoring of estate agency practices and perhaps more mystery shopping. Unfortunately, there is not much information available in the public domain on this issue, which I think would help combat the problem.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
As long as there are no consequences, some unscrupulous agents and builders will keep bullying customers into using their in-house, generally overpriced services. It's an open secret that everyone in the industry knows about but the problem is getting a customer to go on record that they have been a victim when they just don't want to lose the house so I would love to see the various regulators actually do some mystery shopping, collate evidence, and punish some pretty endemic, illegal behaviours. Without punishment it will continue un-checked.