The relationship between estate agents and mortgage brokers has not always run smoothly and periodically there will be tension between these two sometimes (un)easiest of bedfellows. It appears to me that we are in a ‘between the wars’ phase at present although I fully expect at some point in the near future to see temporary hostilities break out again.
At the heart of the relationship appears to be a something of a mistrust between the two sides. From a broker’s perspective this tends to manifest itself with tales of agents attempting to cajole their clients into using the agent’s in-house mortgage adviser at their expense. It would seem some agents can’t help trying to convince the client they will be in a far better position when it comes to having offers accepted, if they choose the agent’s broker.
Understandably, brokers get upset when they hear of these attempts by agents and, even though I suspect the number of agents conducting themselves in this manner is relatively small, there tends to be a belief that “all agents are at it’. For what it’s worth the opposite does not tend to be true when it comes to what agents might deem, advisers stepping on their territory. You don’t often hear agents bemoaning the fact a client has gone with their mortgage adviser’s conveyancing recommendation rather than theirs. Perhaps, it’s because the main part of their business, the house purchase is the big earner and mortgage brokers are unable to take that piece of business away from them.
Therefore, the big issue is mortgage broker’s grievances when it comes to perceived attempts by agents to take the business bread from their mouths. While this clearly still goes on, the number of agents who have in-house mortgage advisers has become less and less in recent times. Indeed, while this practise was the done thing pre-Credit Crunch because of the strength of the mortgage marketplace nowadays – and even with the recent upsurge – only relatively small numbers of the bigger players have this type of operation. Most local, independent agents – unless they were set up by a mortgage adviser – are unlikely to offer this service but at a push might have a relationship with a local adviser who they introduce clients to.
So, while there are (in my view) isolated incidents still taking place it appears to me that mortgage brokers instead have an opportunity to secure relationships with agents rather than cause to bemoan them. A simple exercise for an adviser might be to wander their local high-street or agency ‘district’ and make a note of those agents who offer a mortgage advice service. I wouldn’t expect the service to be completely overt on the agent’s part and there may be a number who have nothing in place at all.
Clearly, if this is the situation then an opportunity exists. With the best will in the world, brokers are not likely to have the entire mortgage market sewn up in their local community and you shouldn’t forget that agents are likely to be in contact with large number of homebuyers who have yet to sort their mortgage out before they cross the agent’s threshold. So, this would appear to be a good time to secure a mutually beneficial relationship in which the agent earns from introductions and the adviser secures a further business and income stream. You never know, peace in our time could last a business lifetime if a truce can be called and agents and advisers learn to live and work together.
Harpal Singh is managing director of BrokerConveyancing.co.uk