Buyers don’t want to use real estate-recommended mortgage brokers
According to research by independent mortgage broker Boon Brokers, nearly half (44%) of homeowners who have used a mortgage broker used one recommended or linked to a real estate agent.
Meanwhile, more than a third of them (37%) said they felt pressure from the real estate agent to do so.
“There is a lot of pressure from real estate agents for buyers to agree to use certain mortgage brokers.”
Gerard Boon, Founder and Partner at Boon Brokers, said: “We regularly hear from homeowners who say they have felt pressure to use a mortgage broker from a real estate agent and some have even been told that it would help them get a better deal on the home they wanted, or that would place them at the top of the list of potential buyers.”
“Obviously, these practices are totally unacceptable, and we hope that most real estate agents will be as horrified as we are when they hear these stories.”
One in 12 mortgage holders (8%) believe that using a broker recommended by a realtor will give them a better chance of securing the property they want, and a small number (4%) said that the realtor openly hinted that they would get preferential treatment if they did.
However, that number rose to one in 10 in the 18-25 age category, suggesting that first-time buyers, in particular, may be the target.
About 74% of 18-25-year-olds who had used a mortgage broker admitted that they were linked to the real estate agent.
Many real estate agents have their own in-house mortgage brokers or have ties to a third party and often receive a commission on the mortgages they take out while charging a fee for the advice provided. Although it is legal for a real estate agent to let clients know that a service is available, they cannot give any preferential treatment to those who choose to act on the recommendation.
Another potential issue highlighted by the research was the requirement that individuals share their personal and financial information with various mortgage brokers.
The study revealed that, on average, people were dealing with three different real estate agents when purchasing their last property, meaning that if they needed to contact each agent’s mortgage brokers, they would share their personal information multiple times.
One in four people (24%) admitted they were nervous about sharing their personal and financial information so widely.
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