Warning of Widespread Conditional Selling by Estate Agents
Published / Last Updated on 02/03/2022
Warnings are being issued all over the UK that some rogue estate agents are now putting forwards purchaser (seekers) offers on properties to vendors (sellers) only on the condition they use their in-house services such as mortgage brokers, insurance agents and solicitors.
Many estate agents had a boom through the lockdown period as people reassessed their lifestyles, left towns and cities and flocked to the coast and countryside. This boom is now slowing down, and estate agents are looking to raise additional revenue in the fight for the decreasing numbers of clients.
If an estate agent has its own in-house mortgage broker and/or legal services, they may double or even treble revenue from the same property transaction. Other estate agents may not have additional inhouse services but may have ‘introducer’ relationships where they receive an introducers fee or commission for passing work on to external mortgage brokers or conveyancing solicitors.
The practice of forcing a property seeker to use other inhouse services as a condition of putting their offer forwards is known as ‘conditional selling’. Conditional selling is deemed unfair practice or undesirable in the estate agency profession or professional bodies for estate agents, but it is not illegal.
Any vendor selling their property may clearly miss out on a valid sale if their agent is conditional selling either upfront or ‘behind the vendors back’.
Comment
We suggest that both property vendors and seekers double check with estate agents what their position is. We suggest both buyers and sellers will be at a disadvantage with the risk of delayed or lost sales with the only winner being the conditional selling estate agent.
We also accept that there are many good estate agents that gather as much information as they can about purchasers to enable them to offer a balanced opinion to the vendor as to which offer they should accept.