As Mortgage Strategy went to press the directors of Home of Choice were in eleventh hour talks with a plc to rescue the network.
The news will bring hope to hundreds of appointed representatives who risk losing their businesses should the deal collapse.
The network was believed to have been close to securing a deal with Keith Carby, former chief executive of Openwork, last week but this fell through.
LSL Property Services, which owns the UK’s largest lettings agent network including national chains Your Move and Reeds Rains, was also believed to have been in the frame.
The new investor is thought to have come forward after hearing that the network was to file for administration and is understood to already be familiar with the network model and the industry.
One source tells Mortgage Strategy: “A lot of people believe in the network’s founders, Richard Coulson and Gerry O’Brien, and Home of Choice does not require much money to ensure its future is secure and brokers are paid.”
In a statement last Friday O’Brien, chief executive of Home of Choice, was keen to stress the firm was not in administration and the decision it took last week to appoint an administrator was made because of its “fiduciary responsibilities”.
O’Brien says: “Home of Choice is in serious negotiations with a significant investor who is looking to safeguard the ’going concern’ status of the business. We and the investor are seeking approval from the Financial Services Authority and we expect the regulator to respond early next week.”
He says the network’s bank is supporting the proposal and is working towards a successful conclusion, expected this week.
He is urging brokers to stick with the network and keep submitting business.
A spokeswoman for the regulator says that even if a company goes into administration it continues to be authorised until it goes into liquidation.
She adds that the notice period ARs have to adhere to before moving to a new network may still be in place.
The spokeswoman says: “It will be a contractual issue between ARs and the network. Whether that notice period is still in place is probably up to the firm or the administrator.”
O’Brien says the network should be in a position to provide an update this Tuesday.