Estate agent hard-selling its broker or solicitor? Your rights
How to spot the dodgy practice known as 'conditional selling'
Buying a property can be stressful and isn't made easier by an estate agent saying you MUST use its recommended solicitor or mortgage broker. This dodgy practice is known as 'conditional selling' – it's unlawful, can cost you more and even risks sales falling through, yet it's widespread. Here's what to look out for and how to avoid it.
With thanks to The Property Ombudsman and Nicholas Mendes and Ray Boulger of John Charcol for their feedback.
This is the first incarnation of this guide – please feed back. If you've got questions this guide doesn't answer or you've experienced conditional and are happy to share the details, please feed back.
Buying a home? Watch out for this dodgy practice by some estate agents
If you're viewing, making an offer or buying a property through an estate agent, it's long been against the law for agents to say (or imply) that you must use their own mortgage broker, conveyancing solicitor, or other type of financial service.
Known as 'conditional selling', this dodgy practice is widespread despite it being unlawful – so home buyers need to be on their guard.
Estate agents are within their rights to try and sell their in-house services, but sometimes this becomes 'you must use our mortgage broker or conveyancing solicitor', or suggesting there will be negative consequences if you don't.
Alarm bells should be ringing if you hear the following claims
Conditional selling can be subtle and take various forms. It's likely happening to you if an agent suggests that declining its broker or solicitor means your offer:
Won't be submitted to the seller (or won't be submitted as quickly).
Is less likely to be accepted.
Will be presented less favourably than others.
Or that...
You won't be able to view properties.
The buying process will be slower or more difficult.
You could hear such claims at any point during the home-buying process, but it's more likely to occur on first contacting the estate agent, when viewing properties or making an offer.
Be on your toes during 'buyer qualification'
If you've had an offer on a property accepted, it's normal for an estate agent to 'qualify' your offer (sometimes referred to as 'buyer qualification' or 'offer qualification').
A routine check to verify your identity, confirm you've got a deposit and a 'mortgage in-principle' (if the seller wants to see one), it's a way for the seller to establish whether you're a serious buyer.
Yet it's sometimes during this that an estate agent will try selling you its in-house services – for example, saying you should meet with its mortgage broker so that qualification can be carried out. However, qualification can easily take place behind the scenes and doesn't necessarily require the input of a broker – so watch out.
It's not just estate agents – homebuilders are doing this too
If buying a new-build home, it's likely you'll deal with a developer/builder directly, rather than via an estate agent. But still be on your guard, as some developers have been known to pressure buyers into using their preferred broker/solicitor – including through threats to withdraw a sale.
Again, whilst developers are allowed to recommend a particular firm, it's against all the major codes of conduct to use high-pressure sales tactics or attempt restricting your choice.
These codes of conduct state that developers should make it clear to homebuyers itsyour choice which broker or solicitor (or financial adviser, insurance provider) to choose.
Quick question:
The answer is simple: money.
If you agree to use an estate agent's in-house or partner conveyancing solicitor / mortgage broker, that agent will typically receive a referral fee. We've heard from some industry insiders that this referral fee can be the equivalent of up to 60% of the solicitor/broker fee you pay.
One solicitor told us: "We get paid peanuts compared to what the estate agent gets. Some of them even dictate what we can and can't charge."
In other words, referral fees are a lucrative source of income for estate agents – hence why some engage in conditional selling.
Yes it can. Working on the assumption a seller will also buy a new property later on, an estate agent might invite you to something called a 'cost of moving exercise'. This meeting could be used to promote the agent's own mortgage broker or conveyancing solicitor. However, these overtures might be a little easier to resist – as the agent will probably be keen to keep you as a seller on its listings, regardless of the services you choose to use.
Even if you don't experience this, conditional selling can still impact you indirectly. For example, prospective buyers might be put off from bidding on your property because of an estate agent practising conditional selling.
Or it could be that the estate agent's main source of income is from referral fees. Referral fees mean the estate agent might charge you less to use their service. But while this might sound like a good thing, it means there's less of an incentive for the agent to provide you with a good service as their main financial driver is referral fees.
Where you don't want to sell your home through an an estate agent that accepts referral fees, it's sensible to ask an agent before appointing them:
"If you are appointed to be my agent, will you be offering related services to anyone showing an interest in my property? And will you derive a fee from doing so?"
You can learn more about the steps involved in selling a property in our How to sell your home guide.
Why do some estate agents practise conditional selling?
Can this practice also impact those selling a property?
Remember: Estate agents work for sellers, not buyers. So be careful of divulging too many details about your budget, otherwise this information might make its way to a seller – giving you less room to negotiate on price.
Should I use an estate agent's mortgage broker?
If you're a home buyer who needs a mortgage, you might be happy to deal with a lender directly – for example, if you're mortgage savvy, or would only need to port your existing mortgage to move. For most though, particularly first-time buyers, it's best to speak with a mortgage broker.
A broker will scour the top deals available and place you with a lender likely to accept you, plus it can help sort out a mortgage-in-principle. Engage with a broker early on, as this'll mean you're ready to fire off your mortgage application as soon as you've had a property offer accepted.
Using an estate agent's own mortgage broker can work out, but there are risks to be aware of:
-
The broker might work with a limited number of mortgage lenders. A 'whole-of-market' broker searches deals from every mortgage lender, typically 90+. Yet many in-house brokers are limited to 20-50 lenders, or even tied to just a handful. Ideally you want to aim for a broker that is whole-of-market, as you're more likely to be matched with the best deal out there.
-
The broker might not be the best value. Brokers fall into one of two categories: those that charge you a fee and those that are free to use. Estate agents' mortgage brokers tend to charge a fee – and often it's at the higher end as the broker needs to compensate for referrals paid to the agent.
Paying a fee isn't necessarily a bad thing. In fact, there are plenty of fee-charging brokers that provide an excellent service. But be mindful of using a broker if it charges a fee and only searches a limited number of lenders – it's likely you can find a more belts and braces service, and for cheaper, elsewhere.
See our top tips if you're seriously considering using an estate agent's in-house broker. And for more information about mortgage brokers – including a list of top, whole-of-market, fee-free and fee-charging brokers – see our Cheap mortgage finding guide.
Being pressured to use an estate agent's mortgage broker?
Here are a few examples of estate agents pressuring home-buyers to use their own in-house mortgage broker:
We need to make sure you're financially qualified so we can put your offer to the seller – speak to our mortgage broker so they can carry out financial qualification.
Estate agents are legally bound to submit all offers to a seller.
While it's normal for an estate agent to carry out a 'buyer qualification' after you've had an offer accepter, the agent can't make this a condition of submitting your offer in the first place.
The only way I am able to show you properties before they come on to the market is if you come in for a chat with our mortgage broker.
Estate agents are not allowed to make sharing details of properties coming to the market conditional on you using their in-house services.
If the seller gets two offers on the property for the same amount, the seller will go with the offer that's using our broker.
Unlikely to be true, but more importantly estate agents are not allowed to discriminate between offers. This means an estate agent shouldn't encourage a seller to show preference to a buyer using in-house services.
Here's a real life example of this type of conditional selling:
That's great you already have a mortgage-in-principle, however the vendor would like pre-qualified buyers who are keeping their mortgage in-house. For example, if there ends up being two offers on a property both at £190,000, but one buyer has their own broker and the other buyer is using our broker, the vendor will go with the £190,000 offer that is using our broker because they are keeping it on-house so we are able to get the sale through more quickly.
Lastly, here's an example of a hard sales tactic you might encounter, though it's not wrong or against the rules:
We've got exclusive mortgage rates for you from these banks and building societies.
This may be true. But remember, an in-house mortgage broker might be restricted to working with a limited number of mortgage lenders – so while they might have access to exclusive mortgage rates, there's no guarantee these will be the best deals on the market for you.
Saying "no" to an estate agent's mortgage broker
It's entirely your choice whether to use a mortgage broker in the first place and which one to choose, yet conditional selling can make it feel like you're in a precarious position when buying – especially if there are rival buyers willing to 'play ball' with an estate agent's demands.
Therefore, if you know you don't want to use an estate agent's mortgage broker, it's worth having some responses ready in case the agent starts piling on the pressure. If they know you're wise to the practice, it could be enough to deter them from behaving badly.
Here are some lines for inspiration:
- 'I already have a mortgage broker that I plan to use. Can you confirm in writing this won't negatively impact any offer I submit through you to a seller?'
- 'I've already got a mortgage-in-principle, so I don't need to speak with your mortgage broker.'
- 'Can you confirm in writing that you told the seller I've got a mortgage-in-principle (even though I declined to use your broker)?'
- 'Can you confirm in writing that you'll tell me about properties coming onto the market promptly even if I don't use your mortgage broker?'
- 'After you've submitted my offer to the seller, please confirm in writing that this was done promptly and clearly.'
If you've already got a mortgage broker and would rather avoid uncomfortable conversations like these with an estate agent, you can always ask your broker to liaise with the agent on your behalf (they should be happy to help as it's in their interest to keep your business).
Should I use an estate agent's conveyancing solicitor?
Buying in Scotland? In Scotland, you need to appoint a solicitor before you can start viewing properties or submit an offer, meaning the following chapter is less likely to apply to you.
Home buyers need a conveyancing solicitor to sort out the legal side of the transaction.
Using an estate agent's in-house solicitor can work out, but there are some potential issues to consider:
-
These solicitors aren't necessarily the cheapest. Ideally you want a conveyancing solicitor that's competitively priced, has solid reviews or comes recommended. Typically you'll look at paying between £1,500 and £2,500, but in-house solicitors might charge extra as they'll normally pay a referral fee to the estate agent.
-
Lenders sometimes work with a select number of solicitors. Some mortgage lenders work with a select panel of conveyancing solicitors. This means if you use an estate agent's solicitor but it doesn't appear on your mortgage lender's specific panel, you risk having to switch solicitor later – and possibly paying a second set of legal fees. This also risks slowing the purchase down, potentially collapsing the sale altogether (for example, if you're in a long chain and the delays from switching are significant enough to cause someone to pull out).
-
It could represent a conflict of interest. If you and the seller both use the estate agent's in-house solicitors/brokers, this could represent a conflict of interest. For example, you might have less scope to negotiate on the property price if, hypothetically, the details of your budget were to reach the seller.
-
These solicitors don't always provide the best service. In-house solicitors often pay referral fees to estate agents, and might take on extra work to make up for this lost revenue. If a solicitor is inundated with conveyancing work, this could impact the level of service you get.
See our top tips if you're seriously considering using an estate agent's in-house conveyancing solicitor. If you've opted against this, see our Buying a home timeline guide for ways to find a competitively priced conveyancing solicitor that offers a solid service.
Being pressured to use an estate agent's conveyancing solicitor?
Here are some examples of estate agents pressuring buyers to use their solicitor:
When buying a property the legal side of things can take ages. At least with our in-house solicitor, the process will be quicker.
It's not necessarily true that an in-house solicitor will get the legal work done any quicker. It can be the case, but choosing the in-house option could also potentially slow the process down. Furthermore, a solicitor has limited influence when it comes to hearing back from local authority searches – a waiting game which is generally out of your and your solicitor's hands.
What should help speed up the legal process (a little bit) is lining up a conveyancing solicitor early on, meaning you're ready to instruct them as soon as you've had a property offer accepted.
The only reason the seller has accepted your offer is because they think you're using our in-house solicitor.
It's unlikely a seller's decision will hinge on a buyer using the in-house solicitor.
The seller has requested you use our conveyancing solicitor.
Again, a seller is unlikely to ask you to use a particular conveyancing solicitor (you should double check with the seller directly if the agent has made this claim).
We won't charge an anti-money laundering check fee if you use our solicitor.
Estate agents and solicitors are required to carry out background checks on homebuyers as part of anti-money laundering (AML) regulation. Solicitors normally charge a nominal amount (a few pounds) for AML checks, typically included within the breakdown of its conveyancing fee.
The majority of estate agents don't charge for carrying out anti-money laundering checks, but in recent years there's been an uptick in the number of agents doing so – some as much as £75.
An estate agent that does charge this fee might use it as leverage to get you to use their in-house solicitor – for example, 'use our solicitor and we'll waive this fee'.
We've got direct access to management who can smooth out any issues with our in-house conveyancing solicitor.
In other words, you could ask the estate agent to pressure the conveyancing solicitor if you encounter difficulties. In reality, it's unlikely an estate agent could help speed up the legal process by 'leaning on' the solicitor.
Saying "no" to an estate agent's conveyancing solicitor
It's entirely your choice which conveyancing solicitor to use, yet conditional selling can make it feel like you're in a precarious position when buying – especially if there are rival buyers willing to 'play ball' with an estate agent's demands.
Therefore, if you know you don't want to use an estate agent's solicitor, it's worth having some responses ready in case the agent starts piling on the pressure. If they know you're wise to the practice, it could be enough to deter them from behaving badly.
Here are some lines for inspiration:
- 'I've already instructed a conveyancing solicitor to carry out the legal work for me, so I don't need to speak to yours.'
- 'Can you confirm in writing you'll provide me with details about properties coming on to the market promptly even if I opt not to use your in-house solicitor?'
- 'I am happy provide the information you need for you to qualify my offer, but I'd like to be clear that I don't intend to use your conveyancing solicitor.'
- 'Can you confirm in writing that when you submit my offer to a seller you won't claim I'm using your in-house solicitor?'
- 'I am delighted my offer has been accepted, but I don't intend to use your conveyancing solicitor.'
How to complain about an estate agent's sales tactics
If you believe an estate agent has used unfair sales tactics, you can complain. While the recourse available is limited (for example, if you've lost out on the house of your dreams, it's unlikely this will change), complaining could lead to an apology or even compensation – plus, it will hopefully help stamp out this dodgy practice.
First, gather any relevant evidence (such as written correspondence between you and the agent). Then, there are then three ways to complain, each worth pursuing in its own right:
1) Contact the estate agent directly – make it aware conditional selling is happening
Send your complaint to a manager or head office if possible – the higher up the chain you go, the more likely your complaint will have an effect.
Familiarise yourself with the rules around conditional selling (see paragraph 9D of the Property Ombudsman's Code of Practice for Residential Estate Agents). If the estate agent senses you're familiar with what's right and wrong, it's more likely to take your complaint seriously.
2) Complain to an ombudsman – your best bet if you want redress
Estate agents must be registered with either The Property Ombudsman or Property Redress Scheme, both of which can order agents to issue an apology, pay compensation or carry out other forms of redress.
Ask the agent which it's signed up to, then lodge your complaint (it's free to do).
3) Report it to Trading Standards
Doing this is particularly important (even if you've already obtained redress) as it helps build up a nationwide picture of the estate agents practising conditional selling.
To report to Trading Standards, you'll need to contact one of the following:
-
Citizens Advice Consumer Service (England or Wales)
-
Advice.scot (Scotland)
-
Consumerline (Northern Ireland)
The details of your experience will then be passed on to Trading Standards.
And finally.... please contact MoneySavingExpert.com
MoneySavingExpert.com is keen to hear about your experiences as well. So if you've been impacted by conditional selling, please feed back and let us know.
Where you've got feedback about this guide more generally, please also get in touch.
Quick question:
By law, estate agents must treat buyers fairly and submit all offers to a seller promptly and in writing (unless otherwise directed by the seller).
The Property Ombudsman code of practice also states:
"By law you cannot make it a condition of passing on offers to the seller that the buyer must use your services offered by you or another party. You must not discriminate, or threaten to discriminate, against a buyer because that person declines to accept that you will (directly or indirectly) provide related services to them. Discrimination includes but is not limited to the following:
-
Failing to tell the seller of an offer to buy the property.
-
Telling the seller of an offer less quickly than other offers you have received.
-
Misrepresenting the nature of the offer or that of rival offers.
-
Giving details of properties for sale first to buyers who have indicated they are prepared to let you provide services to them."
National Trading Standards says estate agents who engage in conditional selling are "in breach of their professional requirements".
It adds: "NTS views this practice – known as conditional selling – as unacceptable and is aware that it is a significant problem. It often goes unnoticed and unreported, as offers on homes may be turned down for lots of reasons and most prospective buyers assume that if an agent tells them their offer has been rejected, the process has been honest."
Furthermore, under Consumer Duty rules, regulated firms – such as mortgage brokers and conveyancing solicitors – must consider the impact on homebuyers of their work with unregulated firms (such as estate agents).
Here are a few examples from homebuyers who've been in touch:
I am in the process of buying a house and I have had the issue of conditional selling from the estate agent.
I was first asked if I would be interested in using a recommended conveyancer from the estate agent. I explained I hadn't really thought about it, so yes any recommendation would be good. Then when I put an offer in, I was told there were a couple of others interested all with very close offers. It was mentioned again that if I used an in-house conveyancing team my offer would be favourable. Again, I said I would consider recommendations.
My offer was accepted, and when the whole process got going I decided to use a different conveyancing team as they were about £1,000 cheaper than the in-house team. When the estate agent found out he phoned me and told me that that was a condition of the offer being accepted – that I used their conveyancing team. I told him, no, this was not what I said. He then said he would need to speak to the seller to advise of the change and that he would come back to me.
My sister found your article about conditional selling. So I stuck to my guns, and was not going to be dictated to or bullied into using the in-house team. But I really didn't want to lose the house. Later, I got a phone call from the estate agent, explaining the seller was still happy to sell to me. I doubt the estate agent even spoke to the seller.
I am glad I stuck to my guns and was determined not to be bullied.
We recently went through the process of buying our first home.
Nearly every estate agent encouraged us to use their services in several different ways. We were told that to get on "viewing hot lists" and access information about properties first we had to go through their financial services or mortgage broker. One estate agent suggested that to be able to put any offer in we had to speak with their financial advisor first, so they could ensure the offer was valid. They only backed down after we challenged them.
We had all our details passed onto a solicitor pushed by the estate agent, one we never agreed to use or wanted to use. The estate agent said this was to "speed the process up". We were told we could get a better mortgage deal to up our offer price on a particular property if we used their broker, even though this would never have been the case.
It was a regular battle refusing all the backhanded ways their services were suggested to us.
What are the exact rules around conditional selling?
Real-life examples of conditional selling
Using an estate agent's own broker or solicitor? Our top tips
If you're considering using an estate agent's mortgage broker or conveyancing solicitor, it's best to do some research before agreeing. Here are a few tips:
-
Check for reviews. Google and Trustpilot are good places to start. A long list of poor reviews should be a red flag and a reason to look elsewhere.
-
Ask if they can price match. If you can find a cheaper quote elsewhere from a conveyancing solicitor or mortgage broker, ask if the in-house service can price match or negotiate. The worst they can say is no – though if they do agree, it's worth confirming this won't negatively impact the level of service you receive.
-
Read the disclosure form. Ask for this during your initial chat with an in-house mortgage broker or conveyancing solicitor. It should outline the number of lenders a broker works with, what fees it charges, additional types of services it can offer, and more – you can take this form away and use it to compare with others.
-
Don't be afraid to ask questions. For example, if you're confused by the different rates and names a mortgage broker is referring to, don't be afraid to ask questions. You could always ask the broker to share their screen with you so you can see what they're referring to.
-
Check how many lenders the broker works with. Ideally it's best to use a 'whole of market' broker (typically 90+ lenders). If it's not, ask the broker which lenders it does work with.
-
Ask the solicitor if there are any lenders it doesn't work with. For example, there's no point using a solicitor which doesn't appear on Nationwide's conveyancing panel if you plan to apply for a mortgage from Nationwide. Check this before appointing a conveyancing solicitor.
Are there other services an estate agent might try selling me?
Arranging a property survey is an important step when buying a home.
So some estate agents might use strong-arm tactics to sell you an in-house surveyor. But like with mortgage brokers and conveyancing solicitors, the choice of surveyor is yours.
We have heard some anecdotes of estate agents pushing inexperienced or less qualified surveyors on to homebuyers. So watch out and do your research before appointing one. And bear in mind an in-house surveyor may be more expensive than otherwise as the surveyor's fee will likely need to cover a referral paid to the estate agent.
For more on the types of property survey available, see our Buying a home timeline guide.
As independent surveyors we have found a number of estate agents attempting to persuade homebuyers to use their in-house surveyor – often one who is not chartered or especially experienced. Some homebuyers have come back to us for a second opinion as they are unsure if they've been given the best advice.
We have even come across some estate agents who – when I try and book in a survey – will stall and call the purchaser to persuade them to use their in-house surveyor instead who can do the job 'cheaper and more quickly'.
There have also been instances of estate agents demanding copies of surveys we've produced and then handing it over to the seller in order to proceed.
Looking for more home-buying help?
We've got lots of other helpful guides and tools if you're looking at buying a home:
First-time buyers' guide. Free PDF to get you on that first rung.
Cheap mortgage finding. How to find the top deal for you.
Shared ownership. A scheme where you buy a share of a property.
Mortgage best buys. Find your top mortgage deals.
Self-employed mortgages. How they work.
Share this guide?
