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A new investigation has found that illegal conditional sales practices by estate agents are getting worse, to the detriment of their clients.
A conditional sale, as we all know, is when a real estate agent tells a potential buyer that they must use the agent’s in-house broker to make an offer on the property.
Nearly two-thirds (63%) of Access Financial Services mortgage advisers surveyed said their clients had experienced a conditional sale in the six months between November 2023 and May 2024. Of these, 100% of advisers said it had caused harm to their clients, including stress, hassle and confusion.
A third of advisors surveyed (33%) believe conditional sales have gotten worse in the past six months ending in May. The same proportion (33%) believe the issues have remained about the same. 30% are unsure and 4% believe they are improving.
Perhaps most concerning for the real estate industry, more than four in five mortgage advisors (83%) feel that conditional sales are almost standard practice at some real estate agencies.
Karl Wilkinson, CEO of Access Financial Services, said: “That this practice continues 20 months after we took a stand against conditional sales and developed tools and processes to protect advisers and their clients tells us something is wrong in the real estate industry.”
“A significant minority of real estate agents are being allowed to continue to negatively impact our industry. This must stop.”
Mr Wilkinson added: “Conditional sales are morally wrong and a clear breach of consumer duty, the Property Ombudsman’s code of conduct and the Estate Agents Act 1979. What other industry would tolerate such harmful behaviour? We can do better.”
To combat conditional sales, Access Financial Services has created two free letter templates for financial advisors and their clients: one to inform your estate agent of the situation, and one to request assistance from the Real Estate Ombudsman if you don’t get a positive response.
When asked to describe a conditional sale experience over the past six months, advisors mentioned a client who was denied the opportunity to purchase a property because they refused to select an agent broker.
Another adviser mentioned a string of first-time buyers, all of whom felt pressured to use the estate agency’s in-house advisers.
One adviser’s clients were very worried about losing out on the home they wanted to buy, but were also angry about being forced to use a service they didn’t want. They didn’t understand why they had to use a mortgage adviser they didn’t know and couldn’t trust. Another adviser said one of his clients was confused as to why he was being denied his fundamental right to free choice when buying a home.