A whistleblower has told the Telegraph of dodgy practices used by a large chain which she says mean only the agents win while both seller and buyer lose out.
One of the practices alleged is offering buyers a £1,000 incentive if they use ‘in-house’ conveyancing and mortgaging services.
In reality, the £1,000 is shaved off the offer price that vendors receive.
While it is well known that some agents do pressurise buyers into using financial and conveyancing services – and allegedly prioritise their offers – the payment of an incentive is less well known.
It appears from this weekend’s story that the whistleblower ‘Jenny’ – not her real name – still works for the chain, said to be in the south-east.
She told the paper that people put their ‘blind faith’ in agents, adding: “It’s all about selling mortgages these days.”
She alleged that although offers were being put through to vendors, they were being deterred from high bids from buyers with independent mortgages.
She said: “Most people for the sake of a couple of thousand pounds will go with the [offer] they’ve been told has more certainty.”
The Telegraph story states: “Sometimes a vendor agrees only to accept offers ‘financially verified’ by the estate agent, Jenny added, giving the estate agent free rein to reject independent buyers outright. And the tricks don’t stop there. Buyers at Jenny’s firm are told they can get a £1,000 ‘buyer’s incentive’ discount if they use in-house mortgage and conveyancing services – but in reality this is shaved off their bid to the seller.
“Buyers are also told they will become a ‘hot buyer’ if they see the estate agent’s mortgage broker, giving them special access to a ‘premium buyer’s list’ of houses only available to them.”
The Telegraph story alleged that Jenny’s firm makes £600 from each buyer who takes out a mortgage through the firm, as well as commission from the mortgage lender.
The unnamed firm is said by the Telegraph to have brokered £4.4bn of mortgages in 2014 – more than the £4.3bn it sold in property.