Estate agents have been slammed by two leading mortgage brokers for the common practice of ‘persuading’ buyers to use their in-house mortgage advisors.
Rory Joseph and Sebastian Murphy of Hitchin, Hertfordshire based firm JLM Mortgage Services say the practice is rife and accuse agents of both restricting buyers from viewings as well as bidding opportunities unless they commit to using in-house rather than third-party brokers.
“A lot of the time this is targeted at first-time buyers who effectively don’t know any better [and] who might think these strong-arm tactics are part of the ‘cut and thrust’ of buying a first home,” the pair’s opinion piece for Mortgage Solutions magazine says.
“[These buyers] accept it when an agent tells them that they are selling properties to the first two or three people who view every time, and that they need to be part of this early group – and the only way to do this is by using their adviser.”
Although Joseph and Murphy have skin in the game as competitors with agents for mortgage broking business, they claim that agents’ in-house broking teams often offer buyers smaller mortgage lender panels and receive inflated referral fees that ultimately make the mortgage more expensive.
“The main culprits are the big corporate agents bullying people into taking hugely sub-standard advice services with, quite frankly, crap mortgage propositions,” the pair add.
“It’s a practice that should be consigned to the past but is very much evident in the here and now.”
The property industry faces change in the way referral fees for mortgages and other services are earned.
A recent National Trading Standards report to Ministers recommended that estate agents should be forced to tell customers about third party referral fees or face expulsion from the industry.
Read the opinion piece in full.