Why Conditional Selling Must Be Banned and Referral Fees Made Unlawful

stephen4880
Jul 15
3 min read

Updated: Oct 20

A Solicitor’s Standpoint from Inside the Industry

After two decades as a solicitor and sixteen years running my own estate agency, I’ve seen the property market evolve in ways both promising and deeply troubling. The recent BBC Panorama investigation into conditional selling has cast a harsh but necessary spotlight on a practice that undermines the very foundation of trust between agents, buyers, and sellers.

🛑 What Is Conditional Selling — And Why It’s Wrong

Conditional selling occurs when estate agents pressure buyers to use in-house services—such as mortgage brokers or conveyancers—as a condition for having their offer considered. This tactic is not only unethical; it’s also illegal under the Estate Agents Act 1979, which mandates that all offers must be passed to the seller, regardless of the buyer’s financial service choices.

The Panorama report revealed agents favouring lower offers simply because they came with bundled ‘in-house’ services. This practice can potentially cost sellers thousands and mislead buyers into believing they had no choice. This isn’t just sharp practice—it’s a betrayal of fiduciary duty.

The Impact of Conditional Selling

Distortion of the Market

Conditional selling distorts the market by prioritising profit over price. It creates an environment where buyers feel compelled to use specific services, limiting their options. This not only affects the buyers but also the sellers, who may unknowingly accept lower offers.

Erosion of Trust

When agents engage in such practices, they breach their legal obligations. This erodes public trust in the entire industry. Buyers and sellers should be able to rely on their agents to act in their best interests, not to manipulate them for profit.

💼 Why I Founded My Own Agency

Sixteen years ago, I opened an Estate Agency alongside the Law firm, built on transparency and integrity. I was tired of watching clients be manipulated by corporate agents chasing referral fees rather than fair outcomes. My goal was simple: to create a space where sellers could trust their agent to act solely in their interest, and buyers could engage without coercion.

The Ethical Dilemma

Let’s be clear—referral fees from ‘in-house’ services can be lucrative. Some agencies reportedly earn up to £10,000 per transaction through these add-ons. But at what cost? When profit becomes the priority, ethics are the first casualty.

I’ve turned down countless opportunities to monetise my clients’ trust. I’ve watched competitors grow faster, flashier, and more aggressive. But I sleep well knowing that every offer we present is genuine, every buyer is treated fairly, and every seller gets the full picture.

Many of the so-called ‘in-house’ services are not part of the estate agency selling the ‘in-house’ services. They refer to outside companies for referral fees. Sixteen years ago, Estate Agents were, and still are, setting the fees solicitors can charge and then take 50% as referral fees. A business model set to fail as this 50% is before considering any costs – this has been evidenced time and time again by large factory conveyancing firms ceasing to trade, leaving their customers distressed and the industry paying the price for the failure.

💸 Profit vs Principles

When profit overshadows principles, the entire industry suffers. The focus should be on providing value to clients rather than maximizing referral fees. Ethical practices should be the norm, not the exception.

⚖️ Why Conditional Selling and Referral Fees Should Be Banned

It distorts the market by prioritising profit over price.
It misleads buyers into thinking they must use certain services.
It breaches legal obligations and erodes public trust.
It disadvantages sellers who unknowingly accept lower offers.

A Call to Action

The BBC’s exposé should be a turning point. Regulators must enforce existing laws with teeth, and Parliament should consider tightening legislation to explicitly outlaw conditional selling and referral fees. Consumers deserve better—and so do the honest agents who refuse to play dirty.

As someone who’s worked both sides of the property fence, I say this with conviction: conditional selling and referral fees are a stain on our industry, and it’s time we scrub it out for good.

How to Navigate the Market

If you want to sell your house and are using our estate agency, you are free to use any conveyancer you wish. It tends to speed things up if you use ours—simply because we are in the same building, and we put our clients first. If you find yourself being pressured into using another agent's conveyancer, please contact us today so we can help you report them!