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MM mystery shop exposes estate agents’ ‘tricks’ on broker fees

A Money Marketing investigation has found four major estate agents giving out incorrect and misleading information to prospective borrowers on how much it would cost to use a mortgage broker.

Money Marketing app-roached Connells, Countrywide, YourMove and Spicerharrt, posing as a first-time buyer, and asked the estate agents about being referred to a broker and how much the fee would be.

The mystery shopping exercise found estate agents’ consultants confused the broker fee with the lender’s arrangement fee and insisted all brokers charge fees, which is not the case.

Connells charges a £399 broker fee on application but when asked if there is a charge at any stage before completion, a consultant replied: “No, no, no, no.”

YourMove charges a £399 broker fee. A consultant said: “It is basically an arrangement fee so even if you went directly through a bank or lender it would still be an arrangement fee they charge. For the actual advice it is free of charge.”

Spicerhaart refers customers to local brokers with fees set on a case by case basis.

Asked whether all brokers charge administration fees, a consultant replied: “Exactly, they all charge.”

Countrywide charges broker fees of £249 for residential mortgages and £499 for buy-to-let mortgages when mortgages complete.

An agent said: “It is pretty much an arrangement fee. The appointment itself is no fee no obligation. You have got nothing to lose. I believe there are arrangement fees of varying cost with the different banks.”

London & Country is a fee-free broker. Associate director of communications David Hollingworth says: “It should be straightforward from the start whether you charge a fee or not. There are plenty of tricks estate agents use to wrestle business away.”

YourMove admitted the information was given in error and it will be addressed internally. Connells and Countrywide declined to comment.

Spicerhaart’s financial services division, Just Mortgages managing director Antony Lark says: “We do charge fees and we disclose that to our clients from the outset. With regards to the statement that all brokers charge fees, we take this matter very seriously and will investigate internally and deal with it as appropriate.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Having had a client experience one of the named and shamed nothing surprises me in the slightest. Just losing an advice fee is the tip of the iceberg. We nearly had a client charged the very same to give up a portable 0.75% above bank base rate lifetime tracker for a 2.99% tracker for two years reverting to SVR at 4%

    They had been given the impression that they had to use the mortgage adviser at the said company in order for their offer to be accepted and were also told that it was free.

    Thankfully they had more sense and smelt a rat. Unfortunately the mortgage adviser couldn’t see what they had done wrong!

  2. This appears to reiterate the difference between ‘Advice’ and ‘Non-advised sales’…?

    From what I’ve read recently, the next time I move, if I make an offer I’ll text the vendor to check they receive it….

    Given that buying a house is (stating the obvious…) a significant cost typically running into £100,000s it scares the hell out of me that this sector is seeming less regulated than (for example) someone paying £100 per month into an investment ISA.

  3. The Hound of the Compliancevilles! 20th February 2014 at 5:20 pm

    What a surprise – your dealing with individuals that don’t have effective regulation and/or a qualification requirement to do their job, anyone could do it who can talk/walk/speak – its a sales job!!!!

    Why are we surprised at this revelation.

    Next you’ll be telling me tradesmen really couldn’t give a stuff about customer service and generally run a charging model that is based on any of the following on a given day…the car on your drive/the size of your house or the way the wind is blowing!

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