Connells accused of hard-sell tactics to get buyers to use mortgage services

Connells has been accused by a newspaper of telling prospective purchasers that to be a “premium buyer” they must use their mortgage services.

Connells has denied the claim, also telling EYE it is hampered by looking into the matter because the newspaper has not named the branch.

The story in Metro alleges that Connells applicants are told they must either take out a mortgage or have a financial assessment with their in-house mortgage broker.

In a taped phone call contained in the link at the bottom of this story, which runs to nearly seven minutes, the unnamed Connells agent talks to the undercover reporter who poses as a buyer.

The reporter explains that she already has a mortgage in principle, but is nevertheless asked by the agent to see the Connells mortgage adviser.

The reporter also asks about cash buyers, and is told that these are also asked to see the mortgage adviser, so that there is proof of funds.

According to the story, the agent explains that some properties are “only available to our premium buyers”.

Reporter Amy Willis says: “Jane [not her real name] told me if I wanted to get on their exclusive ‘Premium Buyers List’ I needed to take out a mortgage with them or have a financial assessment with their mortgage broker Bianca [not her real name].

“Jane also explained some of the ‘benefits’ in taking out a mortgage through Connells Estate Agents.”

Jane then tells the reporter: “You’ll become what we class as a really hot buyer. You’ll be able to view properties before they’ve even hit the internet. We can get you to view these properties before anyone else does.

“The reason we like you to come in is for our vendors so we know that you’re a good buyer and that you are good to go with the budget you’ve given.”

‘Jane’ adds that ‘Bianca’ has access to fantastic rates, and that ‘Jane’ will even go out canvassing “the neighbourhood where I want to live if I agree to see Bianca, calling this this ‘Home Finder Service’.”

Connells, which is owned by Skipton Building Society, makes around £600 from each buyer taking out a mortgage, as well as commission from mortgage lenders, claims the story.

It goes on to quote Mark Hayward, managing director of Propertymark NAEA.

He told Metro that some agents are “sailing close to the wind legally”.

He said: “Under the 1979 Estate Agencies Act, you can’t make it a pre-condition that someone takes up one of your other services before they can move forward in terms of viewing properties.

“The buyer has freedom of choice. They shouldn’t be coerced into using an adviser or coerced into using a product that is not suitable for them or that they don’t want to use or are not comfortable using.”

Hayward said that an agent must act on behalf of the seller.

He said: “If they are precluding people from viewing because theywon’t take up their mortgage services, then they are acting illegally. But it depends how it is couched.”

Connells told EYE: “Connells’ in-house mortgage services are entirely optional and have no bearing whatsoever on a buyer’s ability to secure a property through one of our branches.

“Staff are instructed to treat all buyers equally regardless of whether they opt to use additional services or not.

“Also, in accordance with our obligation to the vendor, it is right that we should make reasonable enquiries to qualify prospective buyers and whether financials are in place to complete the sale.

“Additionally, and in order to act in the vendor’s best interests, it is imperative that Connells market every property as widely as possible and do not prefer particular buyers.

“We did ask Metro which Connells branch was featured in the call/story in order for us to investigate, but unfortunately this detail was not forthcoming.”

The story, including the telephone tape, is at this link:

http://metro.co.uk/2017/03/10/the-great-mortgage-fix-how-estate-agents-trick-buyers-into-spending-more-6476355/#ixzz4awfQ8Y3I

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31 Comments

  1. smile please

    Every corporate and a good number of independents have this conversation numerous times every day.

    This is one of the more gentle and skillfull ones.

    You will also hear everyday “If you want to buy this property you must use our mortgage adviser and solicitors” more clumsy but same outcome!

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    1. smile please

      I very much doubt it.
      Redress is retrospective not about setting rules or guidlines.
      Still well done for the plug for your company, no doubt the contributors will do a sterling job and give constructive feedback.

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  2. eltell

    ‘Well they would say that wouldn’t they?’

    I’ve been saying for years, the larger the business the more corrupt they are. Sadly harsh but true.

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    1. Philosopher2467

      Harsh? I wouldn’t like to get on your wrong side! It has to be said though that, I read more about independents running off with clients cash than any corporate! Having been both I believe that it comes down to individual integrity and not what one believes they are forced or required to do. 

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  3. Philosopher2467

    Perfectly correct to have verification of a buyers status. In my 35 years I’ve lost count of all the ‘cash buyers’ who were only ‘cash’ once they’d secured a loan and all those with a mortgage in principle which turned out to be ‘wishful’ thinking once my mortgage colleague had asked a few questions. Having been at Connells many ‘moons’ ago, this is exactly what a good ‘partner’ would do and common practice. It was never suggested in my time there that a buyer could only buy if they used CMS though. I think someone has gone a tad ‘off piste’ if the recording is correct and unedited. If it is correct; another ‘miss selling’ drama could unfold with all those that feel they have been manouvered into a loan they could have bettered?

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    1. Andyw99961

      You are missing the point. Buyers are saying to Connells, I have it all sorted heres my brokers details I have an agreement in principle…..and are having mortgage services forced upon them

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  4. AgencyInsider

    An agent tells a buyer at the point of offer –

    You must speak with our mortgage adviser because we need to be able to tell our client vendor that you are in a good financial position.

    Translation :

    You must speak with our mortgage adviser so they can try and flog you a mortgage; so we can earn a fat fee.

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    1. AgencyInsider

      Fascinating. Is that 10 dislikes because:
      a) I am absolutely correct
      b) Absolutely wrong
      c) Correct, but you practice the deceit and don’t like being called out for it?
      p.s. I don’t really care, because I know for absolute certain it is a+c. 

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  5. Chris Wood

    Agents, quite rightly, have an obligation to make reasonable attempts to verify the proceedability of a potential buyer. However, front-line staff in many agents are ‘encouraged’ by low wages/high commission packages and by middle and senior management to hit targets by fair means or foul. Too often by the latter.

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  6. AgentV

    I was asked by a couple of buyers once if I did the ‘special viewings’ like a corporate agent in our region. When I asked what they meant by special viewings I was told ‘the ones before the property comes to market’.

    On further digging the potential buyers revealed they typically paid £250 for these viewings. To my mind they would only pay this money if they thought they stood a chance of obtaining the property at a discount before the property was fully marketed.

    I was shocked that such an illegal practice even existed…let alone was widely being used. However no one ever polices this do they. Buyers are never going to complain if they feel they gain an advantage and most vendors would’nt have a clue if it was going on!

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  7. grantlance

    Corporate agents using hard selling/bullying tactics to sell other services?  In other news water is wet.

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  8. Essjaydee51

    Surely it wouldn’t take too much working out which office it was, the coverage area of the metro then an office with a female neg and mortgage advisor, this would certainly shorten the possibilities then a word in that areas ears to quit whilst marginally ahead!

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  9. MrPHP69

    Im surprised a story like this about Connells has taken so long to come out. I’m all up for cross selling services but not to the extent of bullying. Every offer should be verified and evidence of where the money is coming from is basic estate agency. I remember Connells running something called the complete sale and it basically translated to ‘  unless the buyer is prepared to do their mortgage with us, we will advise the seller to keep the property on the market up until exchange of contracts’ -in other words conditional selling.

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  10. ringi

    Until it is outlawed for an estate agent to get any benefit from the buyer’s choose of mortgage broker, solicitor or issuance this will not improve.      An agent is only working for the seller, so therefore should never receive any money directly or indirectly from the buyer.

    I know many landlords that have been told that if they don’t use the agent’s mortgage broker (and hence give a larger bonus to the branch manager) they will not have their offer put forward, or will not be phoned first next time the agent has a good property.

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    1. smile please

      “I know many landlords that have been told that if they don’t use the agent’s mortgage broker (and hence give a larger bonus to the branch manager) they will not have their offer put forward”
       
      Rubbish! Sorry ringi but that is false.
       
      What the agent ‘May’ have said is you will not be the favoured purchaser but there is no way the agent would refuse to put an offer forward.Its just not worth it and the buyer can go knock on the door and give the offer and try and cut the agent out altogether.

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      1. ringi

        Then why is it one of the most common questions at landlord meetings, with many landlords asking what to do when an agent will not put forward their offer due to them using their own mortgage broker?
        And how do you go and knock on the door when it is a probate sale etc?
        Every agent has a book of the buyers they first phone when a “quick sale” property comes their way, not being in that book can cost landlords a lot of money……
         

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        1. AgentV

          lt’s illegal not to put every offer forwards…and anyone can report it happening to the ombudsman surely? 

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          1. ringi

            Not if that person wishes to be able to buy more property, as they have the risk of being black listed by local agents…..   (Or at least believe they will be!)

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        2. smile please

          All offers are put forward. Any agent not doing this is stupid as he will be fined and sued.
           
          I can well believe some agents do not want to sell to landlords and do not call them regarding properties, i also beleieve sometimes their offers may be put forward in a light that favours another. BUT that is business. Landlords should look to build relationships and not give it the “i am a great buyer, sell it to me” stance so many use.

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  11. wardy

    I can’t help feeling sorry for the Neg. This was clearly the company line and the pitch was cringing to listen to. Naughty stuff and connells deserve to be dragged through the coals for it.

    Isn’t the biggest issue here that the applicant was told that the advise was free? Never mind what the NAEA have to say, It’s the FCA I’d be worried about.

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  12. shrewdagent170

    “…within the provisions of the Estate Agents Act 1979 were hard rules on the ‘qualification’ of offers. The corporate companies that were later to buy into Estate Agency were in some cases to use this provision as their excuse (and this still goes on) to not forward their offers to the vendor, until the potential buyer had seen their ‘qualifier’. Their ‘qualifier’ was, of course, their Mortgage Adviser, who then tried to sell the prospective purchasers often their own mortgage and eventually life insurance products. It is hard not to make the assumption that the actual legislation was tailored to allow the banks and institutions to take advantage of the continued biggest conflict of interest of any professional situation. How as an Estate Agent can you possibly be seen to give impartial advice to a vendor, if prospective purchaser A will use you to arrange the mortgage and life insurance, which will result in you getting a second income from the sale, whilst prospective purchaser B will not.”

    The above excerpt is from Chapter 1 of The Real Estate Agent and the Great Conspiracy Theory. Read it, or better yet get your clients to, in order to understand what estate agency should be compared to what it actually is.

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    1. PeeBee

      shrewdagent170
       
      I could be fishing off entirely the wrong pier here, and using the wrong rod, reel and bait to boot – but did you happen to recently have a book published by any miracle of chance…?
       
      ;o)

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  13. Ben the Badger

    I recall where Connells was selling a property for my next door neighbour. They refused to submit an offer from an applicant who had been buying through the agency but later ‘changed his mind’ apparently for no good reason.  Clearly the issue was still sore with Connells’ team.
     
    Whatever, the applicant stormed out and immediately came to see the owner to tell him the tale, saying: “I tried to make an offer but the agent refused to accept it!  How much do you want?”
     
    Once told, he said he’d pay him £10,000 more, which he did, and the cash sale went through smoothly in days.
     
    BTB

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  14. Zeus

    Tell me something new, this has been going on for 20 years.

    If negotiators fail to get a good conversion rate from sale to mortgage sign up they are grilled by the branch manager who is then grilled by the area manager. This also applies to conveyancing services.Without this extra income Connells profits would not be anywhere near where they are.

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  15. Philosopher2467

    Beware making value judgments on ‘hearsay’ and ‘Chinese whispers’. All these ‘stories’ may have an element of fact but as with playground stories and gossip, all are embellished at best, distorted at worse. I doubt any can be considered ‘gospel’.

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    1. Zeus

      Ok Socrates check out how many people on the Agents review websites have complained about this exact issue regarding CONnells

      .

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      1. Philosopher2467

        more of a ‘holding/playmaker’ as opposed to attacking midfielder, during my playing days⚽️.

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  16. Woodentop

    This is not new news. Many agents have been doing this for years, knowing full well that the aim is to get the FS commission out of the client.

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  17. Huntp151

    As a mortgage broker of some 25 years, this is something the Connells group have been doing for quite some time, it is unprofessional to intimidate prospective buyers in to thinking they have to use their mortgage services to get an offer reported to the vendor, I have had clients who have openly been told they will not get their offer reported to the vendor until they have been to see their mortgage broker, also offers not being reported because a lower offer has agreed to use the mortgage services over a higher offer that would like to use someone impartial & independant, I don’t have a problem with them asking buyers if they would LIKE to use their services but not to mislead them & lie to them, the sooner this bad practice is stamped out the better.

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  18. ringi

    Just like charges to tenants are being outlawed because some agents did not keep to the rules, I expect agents getting payed by mortgage brokers etc will have to be outlaws as the likes of ARLA will not control the actions of some of their members…..

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  19. Andyw99961

    This firm  (I Know for a fact) has been doing this for years. I know of someone who works for Nat West…was sold a Nat West mortgage via Connells as she was threatened basically re losing the purchase…

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