Homebuyers are being pressured into using brokers recommended by estate agents. These brokers can be in house, or have a partnership agreement in place with an agent.
This is a contentious issue that’s existed in the market for a long time, but this week the controversial practice has been highlighted by research.
Recent Studies found that 37% of buyers who used a mortgage intermediary recommended or linked to by an estate agent, felt under pressure to do so.
What is more, some were led to believe that it would boost their chances of buying their desired property.
One in 10 buyers aged between 18 and 25 said the estate agent openly implied that they would get preferential treatment if they used the referred broker.
Meanwhile 8% of potential buyers wrongly thought that using such a broker would give them a better chance of securing their chosen property.
It seems young people are most swayed by estate agency recommendations.
Three quarters (74%) of 18-25s who had used a mortgage broker said it was one linked to an estate agent.
The bottom line
Estate agents commonly get referral fees for sending you to specific brokers – in which case they may not be objective about whether that specific broker offers a suitable service.
Contractor Mortgages Direct is an independent broker that works for you, rather than taking referral fees from agents.
Do your research
Whether or not you’ve been referred to a broker or adviser, we’d recommend you research into a firm’s credentials before you use them.
Sites like Trustpilot exist for a reason.
You wouldn’t buy an item rated 1* on Amazon, so why do the same with a mortgage brokerage?
Meanwhile personal recommendations from previous customers are worth a lot more than from an estate agent.
Not every broker firm has the same level of expertise.
There’s also varying levels of experience depending on where you go.
Some broker firms, like us, employ experienced advisers who’ve seen people like you many times before.
Others have more inexperienced advisers, though clearly everyone has to be qualified before giving you advice.
The price can also differ, as some brokers charge hefty client fees.
Fundamentally, when getting a mortgage, you want what’s right for you, not your estate agent.
Using an in-house or referred broker doesn’t make any difference regarding whether you secure specific properties with an agent, so we’d recommend you do your research before deciding who you’re going to use.
A broker you’re referred to may do a good job, but you should know how these estate agency partnerships work and make an informed decision when deciding who to trust to secure your mortgage.