Readers will understand that for most estate agency businesses the income from mortgage, insurance, and conveyancing referrals is often a significant proportion of firms’ revenues.
For years the level of sales commissions has been dropping. Agents have naturally turned to alternative sources of income, which have often made the difference between financial survival or going under.
Negotiators and staff can also derive significant additional earnings from rewards and incentives linked to successful referals of applicants and vendor to linked businesses.
Revenues from referral business must be disclosed to the parties involved and it is not permissible for agencies to undertake ‘conditional selling’. In such cases the agency will insist that a buyer must use certain services – conveyancing, mortgage etc – in order for an offer on a property to be put forward.
Yet despite the ban on conditional selling everyone knows that it happens on a more or less frequent basis in some firms regardless of the fact that agents must also not discriminate, or threaten to discriminate, against a buyer because that person declines to accept a related service from the agent. Staff are tasked with always pushing for referral businesses and in some firms may be penalised if they do not meet the referral targets.
Such practices, where proven, do not do the estate agency industry any favours in terms of its reputation in the eyes of the general public.
Social media this week highlighted an alleged case of such discrimination by a branch of Connells which was evidenced by this posting of a message by a would-be purchaser. It appeared that the initial offer was ‘chosen’ over others because the purchaser was using the Connells mortgage service.
Because the purchaser had then apparently changed their mind about the use of Connells mortgage service the branch told him they would have to be resubmit his offer ‘along with others’.
Reactions online included: ‘Have lost count the number of times we’ve seen this.’ ‘Shocking but not surprising.’ ‘Disgraceful behaviour.’ ‘It looks like conditional selling.’
Property commentator, Henry Pryor was particularly direct, reposting the alleged message and saying : ‘Hey Siri, show me some sharp practice!’ He later posted it again saying, ‘If true Connells has some serious explaining to do.”
This is not the first time such allegations have been made about the Connells Group. See the EYE story from last year, linked below.
EYE approached Connells Group for a statement about this week’s case. They told us:
“At Connells any complaint received is investigated with upmost priority. In this instance, the matter reached a resolution for the client within 5 hours.
“An investigation into this email is underway, and if there is an instance of pressurised selling, Connells will take full and appropriate action. Pressurised selling is neither encouraged nor acceptable.”
We are proud to be able to provide a range of services, assisting customers with all aspects of their move and providing a high standard of service.”
We had asked two specific questions of Connells Group, requesting a confirmation or denial for both:
- That Connells staff are required to insist upon an applicant speaking to their [i.e. Connells or related third party] in-house mortgage or insurance broker before an offer is put forward.
- That in the event of there being more than one offer for a property Connells staff will favour or recommend to a vendor the offer that is using the in-house mortgage or insurance services.
The questions were not directly answered but we received this response from Connells Group: “Pressurised selling is taken very seriously and it is not encouraged nor is it acceptable, this applies if one or multiple offers are received. “
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Agents accused of ‘breaking the law’ with ‘conditional selling’ tactics
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