Show me the money?

SHOW me the money! It’s not exactly the phrase you want to hear from an estate agent before they take you to see the home of your dreams. But it is becoming a common problem for prospective buyers who are being forced to see the branch’s mortgage adviser BEFORE a viewing.

Unfortunately this nefarious practice is happening in branches here on King Street. I won’t name names, but I gained a lovely new client this week who told me she was refused a viewing by a large chain of estate agents because she would not be ‘assessed’ by their in-house financial adviser.

This is a worrying trend in our industry. It’s only possible because the huge demand for homes locally is allowing agents to effectively weed out the buyers who stand to make them the least amount of money. In the past, it was a tool for simultaneously being able to offer a buyer a host of insurance products that were fairly worthless and rather expensive. Now, it’s the commission from the lenders themselves and the cut the agents can take from the brokers that motivates the big chains to push their own financial ‘advisers’.

The worst part is that some of these chains are now even including this assessment as part of the contract with the seller, so a buyer now has no choice but to reveal all of their financial history to the in-house broker to stand a chance of just seeing the flat or house that they are interested in. It also makes buyers less likely to view multiple properties with multiple agents as the assessment process for each of the agents is so time-consuming and invasive it’s not worth repeating – unless you are the type who goes to the dentist for a giggle.

The other worry for buyers is that whatever these in-house brokers say, they don’t have the full range of mortgage products. Many big lenders – such as HSBC – don’t even use intermediary brokers. It also opens up the buyer to reveal how much cash they have as a deposit, this way agents can gauge how likely the deal is to collapse if the buyer’s situation changes or if the bank baulks. 

This is not illegal, but I believe it is unethical to force prospective buyers to reveal their financial history at any point, let alone BEFORE they even set foot in a property! The job of the estate agent is to achieve the best consideration from the best buyer. The job of the in-house financial adviser is also supposed to be performed by the agent, so this is a clear conflict of interest between the two roles when the lines become blurred.

Here at Horton and Garton, we do have a specialist in-house financial adviser who is able to offer you advice and mortgage rates – but only at your request. We offer the service because it can help improve the communication between parties as a deal is going through and because it offers buyers a one-stop shop for their purchase if they have not already secured a mortgage. 

We don’t do it because we want to invade your financial privacy and leverage a sale with the information, and we certainly don’t make it compulsory if you want to see one of our properties. If this is bucking the trend of modern estate agency, then I am happy to say that Horton and Garton are proud to be different.