Estate agent with broker arm denies conflict of interest

Estate agent with broker arm denies conflict of interest

A housebuyer's agent has questioned whether an estate agent with an in-house broker has a conflict of interest, after his client's deal fell through.

Buying agent Henry Pryor has criticised the estate agent Spicerhaart and broker partner Just Mortgages, suggesting his client's bid to buy a property might have been successful if his client had chosen to use the in-house brokerage of the selling agent rather than an independent adviser.

Spicerhaart has rebutted his concerns and defended its processes with Just Mortgages as entirely proper.

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Mr Pryor said his client had an agreement in principle for a mortgage to buy a property being marketed by Spicerhaart, which he forwarded to the estate agent along with the client's name, address, solicitor, mortgage broker and confirmation of his status as a chain-free buyer.

The client had been offered a mortgage by Halifax through another broker which Mr Pryor had no commercial relationship with but at this point he was informed by the negotiator handling the sale that as buyers they would need to be "qualified" by Just Mortgages.

When Mr Pryor challenged this, he was told Just Mortgages was independent of Spicerhaart and that it checked all potential buyers on behalf of the estate agency to ensure their financial position.

He was also told that the broker firm might offer alternative funding which the buyer was not obliged to take up.

Mr Pryor said: "I am deeply suspicious and suspect what they wanted to do is to […] sell us a mortgage."

He said he was told by Just Mortgages that in the course of checking the buyers position it might offer a "competitive quote" but in this instance it didn’t get the chance as Mr Pryor refused to provide the buyer's details.

Mr Pryor also said that if Spicerhaart were to share his client's details with Just Mortgages that could breach data protection legislation. 

He said: "At no point was my permission sought for my client's details to be passed to a third party.

"As a buyer, I am providing the person I am negotiating against at Spicerhaart with the full details of what I can afford and compromising my negotiating stance.

"Are these people selling homes or loans? My trusting nature in estate agency profession is sorely tested in these circumstances. 

"The principle is wrong – you should not be selling people mortgages and conveyancing if your job is to sell as an estate agent rather than a broker. The buying public should be aware they are not obliged to take the offer."

Mr Pryor said the buyer did not recall giving consent for his details to be passed on and said the buyer would have refused had he been asked.

But Spicerhaart defended its practices, saying all procedures were followed correctly and in accordance with official guidelines.

“Buyers are in no way obligated to use our financial services but can choose to do so. Under no circumstances would we say that an offer can only be accepted if the buyer has to arrange their mortgage with us,” Paul Smith, chief executive of Spicerhaart, said.