I made an offer on a house but the agent refuses to present it because I won’t use their financial adviser – is this allowed?
- A home buyer in Kent approached a local estate agent with an offer on a house
- He claims he was told to use its financial adviser before it would present it
- He refused to do this as his finances were already in place to buy the home
- We ask whether estate agents are allowed to hold back offers in this way
“I am searching for a new home in Kent, where I live. I recently saw a terraced house that I liked on Rightmove and went for a viewing.
Afterwards, I decided to make an offer. I approached the vendor’s estate agent, Miles & Barr.
When I told them my offer, the agent I spoke to offered me the use of the company’s in-house financial advice service.
I politely explained that I didn’t need it – I already have my finances in order to buy the home, and I can prove this.
Then something strange happened. The agent said that they would only present my bid to the vendor if I used their financial advice service first.”
They said this was part of the agreement that vendors made with them when they listed their property.
I refused – and now I haven’t heard from them for a few days.
I would like to know what the rules are here. Are estate agents allowed to insist that interested buyers make use of their additional services, such as financial advice?
Helen Crane, This is Money, replied: I’m sorry to hear about the problems you say you encountered when you tried to make an offer.
You told me that you are worried that this incident will affect your chances of securing the property – as it seems preference will be given to buyers who agree to use Miles & Barr’s financial adviser.
The property market is a competitive place at the moment, so you are understandably anxious that your offer will not be presented in the best light – if it is presented at all.
I spoke to the industry body for estate agents, NAEA Propertymark, to clarify the rules on this. I also asked Miles & Barr to explain its policy and your claims.
Mark Hayward, chief policy adviser at NAEA Propertymark, said: Agents will use this excuse, saying they need to assess the bidder’s ability to proceed.
But it is illegal to make a purchase, or the presentation of an offer, conditional on you taking additional services from the agent.
As long as the bidder can demonstrate the usual assurances – such as an agreement in principle for the mortgage and proof of funds for the deposit – they do not need to speak to the in-house finance firm. But sadly, this situation is not uncommon.
If the buyer is able to get hold of the vendor, and his offer is competitive, there is no reason why he should not contact them about the offer directly.
The Government is very focused on reforming referral fees at the moment, and this is part of that. There is clearly a greater need for transparency.
Miles & Barr responded: ‘Across the industry, it is common practice for estate agents to ask purchasers to liaise with in-house or associated financial adviser services to “qualify” a purchaser’s buying position, as agents have a duty of care to both their vendor and purchaser to ensure that a house sale can be completed.
‘Miles & Barr follows this widely-used qualifying position before presenting offers from purchasers to vendors.
‘Miles & Barr qualifies all purchasers equally, whether they are a buyer with a mortgage agreement in principle or they are a cash buyer.
‘Purchasers are offered the chance to engage with Miles & Barr’s in-house financial services team to have their buying position qualified, which is free to use.
‘They are under no obligation to use Miles & Barr’s financial advisers to be qualified or proceed with additional services.
‘Presentation of an offer is not conditional on a purchaser being qualified via Miles & Barr’s in-house financial adviser service.
‘Miles & Barr are conscientious to provide care and due diligence to both parties involved in the purchasing and selling of a property.
‘The company supports purchasers in presenting their best offer by providing a free-of-charge qualifying service, to give vendors confidence in the offer being presented.
‘Miles & Barr successfully aided more than 2,000 sellers and buyers to complete and move into their dream home in 2020.’
Helen Crane, This is Money, added: Estate agents cannot refuse to put forward your offer because you don’t make use of their additional services, such as financial advice.
It’s worth pointing out there that I did find another example of someone saying this happened to them recently with Miles & Barr on Google Reviews, although on the whole it has a positive rating on the search engine.
If you have not heard back from Miles & Barr already, you should now be able to approach them with confidence and ask them again to put your offer forward.
Or, as Mark Hayward said, you could try approaching the buyer yourself and explaining the situation.
I am sure they would be interested to know about this obstacle that was put in your way by the agent when you attempted to make an offer.
I wish you luck in your search for a new home.
Reposted from thisismoney.co.uk