I feel compelled this week to look at the benefit, or otherwise, of using an Estate Agent’s in-house financial services/mortgage adviser to negotiate your mortgage. This has the potential to be a minefield and there are a number of myths centred around it, which need to be explained.
You may often find that a selling agent will ‘suggest’ that they cannot put your offer forward to the vendor unless you have been pre-qualified first by their own mortgage advisers. This is refuted by the National Association of Estate Agents (www.naea.co.uk) own Code of Practice which quite clearly indicates that any reasonable offer must be notified to the vendor. Obviously the agent acts on behalf of the vendor and has every right to enquire and confirm you have finance in place and can afford the property and, indeed, this does make sense in the overall context of the transaction.
Amazingly, we had one client in the last week who had been ‘advised’ by the selling agents that the vendor would only sell the property if the buyer used their mortgage advisers! Really? Again, there are no regulatory requirements that can be imposed for this purpose.
Our concern in the overall picture is that both buyer and seller concern themselves over the potentially contentious ‘conflict of interest’ issue. For example, who takes the majority stance in the event that property is down valued and the buyer wishes to negotiate a reduced purchase price, or there is a dispute over items to be left or removed from the property, or if time taken in obtaining the mortgage offer becomes protracted? These are just simple issues and there are potentially many others that can arise.
I guess what I am saying is think before you agree to use any in-house service of this type as overall, it may not always be in your best interests and, as this is the largest financial transaction you will be involved in at the time, it is important to feel comfortable about it. And also to have some independence in the event of any concerns or disputes.
That said, there are, undoubtedly, some very good Estate Agents with well respected and highly professional internal advisers. Just don’t get drawn in by the few…