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Connells requires re-offer on offer that does not utilise its in-house services

Journalist: Tom Dunstan, FTAdviser

ended 10. August 2023

Recently, an adviser has come forward alleging that the estate agent Connells, required their clients' offer to be re-done after not using their in-house mortgage services.

Have you had a similar experience with Connells Group, if so what happened?

What is your reaction to this? What does this mean in the wake of consumer duty?

7 responses from the Newspage community

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Editor
Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
In a market already fraught with intense competition, some estate agents are capitalising on buyers' desperation to secure a property by misleadingly implying that their offers will only be considered if they didn't pay for in-house services. These are all ethical and legal violations of the PropertyMark code by unscrupulous agents. Agents cannot withhold offers based on the buyer's choice of advisory services. However, there are legal requirements for AML and ID identity verification that agents must still perform.

This goes beyond financials and mortgages, as it affects the entire housing ecosystem. Sellers will receive suboptimal offers if agents refuse to present buyers' proposals due to their choice to bypass in-house advisers. Estate Agents' In-house advisory services rarely provide the best available mortgage deals, given that they often operate with limited lender panels. This contrasts with independent brokers who can offer a broader range of options from across the market.
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Mike Staton
Director at Staton Mortgages
As an ex-Countrywide employee, now owned by Connells, I can confirm this practice was carried out regularly in the branch I worked with. Too much pressure is applied to the agent's negotiators to upsell Financial Services, Conveyancing, Surveys etc. Due to a lack of regulations and no license requirements for these agents, it inevitably leads to miss-selling, many of the negotiators are so poorly trained, they do not even realize what they are doing is wrong. At Countrywide, I was able to advise with only CeMap level 1, so it is highly likely that a less experienced and less qualified advisor is being recommended to the buyer. My advice to any buyer is to stay well clear of these corporate advisors, I'm not saying that all corporate advisors are not as experienced or qualified, but why would you want to run the risk when you're buying the biggest thing you will buy in your life?
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Elliott Culley
Director at Switch Mortgage Finance
Recently I have had similar experiences with clients using estate agents and have lost business as a result. It seems wild stories are spun to clients to get them to use their in house services. I've had one clients offer on a house refused until they had a mortgage meeting with them and another recently was told the seller was concerned with them using a broker not part of the estate agents. First time buyers are an easy target as they are less experienced in the house buying process. It stresses clients and makes them worry about losing the house. Unfortunately I don't believe consumer duty will affect this as estate agents won't fall under this as they are the part pushing this practice rather than the in house adviser
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Joe Stallard
Director and Advisor at House and Holiday Home Mortgages
Unfortunately, we hear of this happening far too often. I feel sorry for the buyers; all they want is that property and yet have to put up with these poor tactics and make difficult choices around decisions with huge financial implications. It's about time more was done to stamp down on this activity once and for all.
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Peter Stamford
Mortgage Expert at Stamford Home Finance
This is the sort of behaviour that gives the rest of the sector a bad name. I hope Consumer Duty puts a stop to this and, if the allegation is true, they have the book thrown at them... followed by the library, brick-by-brick.
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Graham Cox
Director at Bridging Hub
Until we have proper, enforced regulation of the estate agency industry, unethical practices like this will continue. It's mostly first time buyers this is aimed at, which makes it even more reprehensible. Naming and shaming these firms is probably the best course of action in the meantime.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
Ever since I've been a broker this has continued to raise its head and it's pretty despicable really. The only real material change to not using an estate agents mortgage broker, or conveyancer (just google the reviews of the firms Connells refer their conveyancing to and make up your own mind on why they might choose to send work to them) is that they make less money from the transaction as a business.