An Increasingly Common Issue
Unfortunately, this seems to be happening more and more, particularly in London, but also even in smaller towns like Dereham where our head office is.
First-Time Buyers Often Caught Out
First time buyers are often caught out and end up bullied into using Estate Agents internal services. Some Estate Agents refuse to put your offer forward on a property until you see their in-house mortgage adviser or suggest your bid will more likely be successful if you do so. This tactic, apart from being unethical, is in fact illegal. All offers need to be put to the vendor within two working days and there cannot be any conditions forcing you to use their in-house mortgage adviser.
The Importance of a Whole-of-Market Mortgage Broker
A number of estate agent in-house mortgage advisers are tied advisers or work with a limited panel of lenders. In order to get the best mortgage for your circumstances It is important that you see a “whole of market” mortgage broker such as Miles Rhodes. These advisers have access to more lenders and exclusive products compared to an adviser working with a limited panel.
Keep Your Negotiating Position
If the estate agent marketing a house – for the seller (let’s remember who their paying client is!) – persuades you to let their in-house adviser vet your finances, the agent will have a clear idea about what you can afford and may encourage the seller to push for a higher offer. Once the agent knows what you’re able to pay (rather than what you’re willing to pay), your negotiating position is completely undermined.
What You Should Provide Instead
At the point of viewing, a Mortgage Promise from your “whole of market” mortgage adviser demonstrates you have the funds ready to draw down. Yes you will be asked to give further evidence of source of funds for money laundering checks, but that comes later. And it shouldn’t involve showing your bank statements or seeing their mortgage adviser. Be strong and don’t be bullied, if all else fails, Quote, Estate Agency Act Section 7c – “By law you must not discriminate or threaten to discriminate against a prospective buyer if that person declines to accept services offered” and remind them of their duty to pass all offers to the vendor.
