Estate agents pressuring buyers to use overpriced in-house services
A new report has shown that one in four buyers felt obliged to use an estate agent’s in-house services over personally-sourced independent alternatives.
Individuals who browse the market with the intention of buying often forget about the additional costs associated with a purchase. From conveyancing and mortgage brokerage, to various utility and property searches, it can often come as a shock how much one has to pay on top of the agreed-upon price.
While many buyers are happy to source their own providers for the necessary services, a new report has found that one in four felt as if they were pressured to use an estate agent’s in-house mortgage broker – amongst other services. As a result, the HomeOwners Alliance have called on the government to enact laws that can bring this obvious conflict of interest to an end.
Why does this matter?
By using an independent broker, buyers are able to obtain free advice regarding the wide range of mortgage products available to them. They are also in competition with other independent brokers in the area – helping to keep their service fees reasonable. An in-house broker at an estate agent, however, often has access to a limited panel of mortgage providers, potentially causing the buyer to accept a deal that is less financially viable.
The use of an in-house broker also grants the upper-hand in negotiations to the agent themselves, as the agent will undoubtedly have access to a potential buyer’s spending limit. This knowledge could hypothetically allow them to maximise profits by dishonestly withholding information regarding the mortgage options the buyer would otherwise be privy to.
“This clear conflict of interest can be incredibly detrimental to both buyers and sellers, and is banned in other professional sectors such as accountancy or law,” said Paula Higgins, chief executive at HomeOwners Alliance.
“The great majority of estate agents are upstanding and a vital part of the home buying and selling process, but sadly a small number may be encouraging their clients to use their services for all the wrong reasons, not to help smooth the process but for financial gain.”
For ethical agents who offer candid advice and services to their clients, the knowledge that unprincipled competitors are exploiting customers – as well as encouraging public opinion to vilify the industry – is devastating. And while there are numerous moral agents out there, it is hard for customers to differentiate between the bad from the good.
However, customers are not limited to just the traditional methods of selling a house. They also have the option to market their homes themselves using online portals, or even by contacting a house buying company who can help them to sell their house fast – often in as little as two weeks.
Prefer to avoid estate agents? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.