Hello All,
Quick question regarding estate agents and the buying process. We are thinking of buying a property and have seen one for which we have now made a verbal offer, nothing on paper yet. We are meeting with the agents later today and have asked us for the agreement in principle and evidence of our deposit.
I can understand why they want to see the agreement in principle but not the evidence of the deposit. I would expect that this is something between us and the bank.
Any comments on this would be greatly appreciated as we are first time buyers trying to find our way through this financial labyrinth.
Many thanks in advance
VA
Perhaps they've had time wasters in the past who have said they've had the deposit when the haven't, thus messing both the agents and seller around.
So they're probably just seeking reassurance that you're not dreamers before recommending your offer to the sellers.
I wouldn't take it personally, more due diligence on their behalf.
Good luck, hope it all goes to plan.
You would not be able to meet the purchase price without both amounts of money so it seems reasonable but ultimately they have no particular right to see either.
Did you show evidence of deposit to the bank when you got the AIP? And what is your hesitation over this?
"Bite my shiny metal ass."
- Bender Bending Rodríguez
It's quite common at the moment for chains to collapse because someone in it cannot, when it comes to it, actually raise the loan. Happened to a friend of mine just this week.
Yes, we both have accounts with the Bank and therefore the deposit is there for them to see. Obviously this was discussed with them when we approached them for a mortgage.Originally Posted by stooo
I simply don't understand (possibly don't know much about this) why the agent would need to see my account if the AIP is there to show that the funds have been agreed. If the bank think that we can handle the mortgage costs then the agent should simply facilitate the transaction instead of snooping around into our accounts.
The cynic in me thinks that the agent can see this way, how much you can push your budget.
VA
If only we had a highly experienced estate agent on the forum.
Someone with a sense of perspective, understanding and a lot of expertise.
**thinks**
No - can't think of anyone.
Just kidding - I'm sure Burnsey will be able to give you a decent answer to this. Mind you, finding threads on the new forum isn't as easy as it was...
Say "no", see what happens.
If they say "bog off", I guess you don't have much choice.
Not 'buy one get one free' then?
It's a fair request.
Some do it as standard, some if clients (often corporate ie. repossession) request it. Some don't.
I could pop in Santander this afternoon and get an agreement in principle to a million pound loan, based on verbal information of salary, savings etc. The AIP would be subject to verification, often later...
The Estate Agents Act 1979 requires an agent to provide a duty of care. Such duty could reasonably be conceived to ascertain (to the best of their ability) if a buyer can proceed when considering an offer to purchase.
That sounds fair enough, if they can justify it along the same lines. However, as mentioned the AIP is beyond just a verbal disclosure of slalary, but rather as the bank offering the mortgage is the bank where we both hold accounts (therefore full visibility to their system including deposit), is a representation of buying power.
We'll see what happens
Regards
VA
Last edited by VA; 17th July 2012 at 12:54.
After seeing the Foxton's show on the BBC a few years ago I wouldn't tell a used house salesman anything about my financial position.
i stopped reading after this post.
we are currently going through purchasing a property, the agent did sugegst the same/similar thing.
what we did was to ask our mortage lander to give the estate agent a call to confirm we have the means to purchase this proeprty. all good to go afterwards.
And agents would wish you well searching for your dream home on Gumtree
On the point of the AIP, it is, as it spells, an application in principle. No two lenders follow the exact same procedures, so with some, you can pop in, provide verbal info, they will do credit search etc and then will tell you how much you can borrow based on that information and often give you a pretty certificate to wave at agents and in the pub. Assuming the info provided is correct, the 'offer' will stand, however, although its a help to an agent, it's far from gospel.
AIP is as others have said, something that may not be an issue, but may also cause problems when it comes time to close. I remember getting a mortgage a few years back, nothing but hassle from my own bank, who i had been with for years, AIP for just under the amount required, so bigger deposit used, but all good and well, until it was time to sign up for the mortgage, which was suddenly a lot less, thankfully we walked round the corner, into Nationwide, all done and they offered nearly twice what my own bank would, deposit used, mortgage in place and all ended well, but if it had been all counting on that original BoS AIP, i'd be stuffed and the sale would have fallen through.
Weirdly, next time i was in the bank they went on about mortgages, their advisor took me aside and then found out there had been a problem on their side, then said do we still need a mortgage as they could offer even more than i'd asked for originally!
I've just re-read your comment as to why you are reluctant to disclose your deposit info, I would just advise that it is you that should be in control of the situation, don't create barriers that arnt really there, the agent isn't there to screw you, your a buyer, he needs you, give him the info, it really won't give him any advantage except to know your serious about things, we recently moved and it was a really smooth stress free experience, I think perhaps the dodgy agents have probably fallen by the wayside in recent years leaving the professionals standing.... Try not to go into this with clenched arse cheeks, it could be / should be a exciting time!
Cheers..
Jase
The Estate Agent is basically going through his 'due process', ie he is asking you thsee questions so that he can say to his client (the seller) that he has done these checks. That way he doesnt look like an arse if the sale falls through as a result of there being no funds in place as he can say 'but I had checked the finances of the buyer and they seemed serious enough....'
Some do it as standard and others dont. It is basically to cover them from getting an ear-full if you turn out to be a joker who wasnt interested, That isnt intended at you, but there are a lot of muppets around who just go looking at houses for the sake of it and even put offers in to get some sort of thrill. There are some odd-uns around!
I've bought two houses and a farm. No sale has required me to disclose any financial information to anyone other than my bank.And agents would wish you well searching for your dream home on Gumtree
If the agent is being an arse, just go straight to the buyer. I got an offer "rejected" that the buyer never received from the agent so prefer not to trust them at all.
When it comes to negotiating price, I do not want anyone involved knowing my financial position. It makes no sense to hand over those details to the person acting on behalf of the seller.
Yes, on second thoughts I agree with this, especially in this buyer's market. I have bought (and sold) five houses and never once been asked for this sort of detailed financial information. At most get your bank to write saying you have the necessary income and if that is not enough tell them you are looking elsewhere. See if that gets their attention.
In your head the funds in the other account are the deposit, but the bank do not know this unless you told them. You may have other commitments against that money.
Assuming you have an agreed price, all the parasite (sorry, EA) is probably doing is making sure you are good for it and will not turn round at the 11th hour and ask for 20K off the asking price because you actually do not have the funds.
If they see what you have and then the asking price goes up, just tell them to piss off. I do see the dilemma, because the agent is acting on behalf of the seller, not the buyer.
As Burnsey said - it's 'duty of care' or 'looking after ones income by not collapsing a chain and having a high sale failure rate'.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
Actually we have told them, hence their quick return on the AIP. In any case this is an issue of disclosing financial information to, effectively, someone who wants to take a bigger cut out of a property. That's where my concern is, if we show them that we have the means to offer a substantial deposit (as the bank are aware, remember this is the bank that we both have current accounts, cc accounts, savings - deposit - account), again the cynic in me is telling me that I'm losing my negotiating position.
VA
Your not losing anything, I would say your gaining a position, they need you as a buyer, it's how you negotiate not really what you negotiate with...... It's not what you have available that's the key, it's what youre prepared to spend, they can't force you to spend more than your prepared to pay...
Cheers..
Jase
Sounds like you already negotiated. Remember that EAs are soulless bastar*ds and one agreed unless either party returns to them they will do everything in their power to not touch the deal, leave it with solicitors so they can move on to the next deal.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
It is (imho) not in any way unreasonable for the agent to ask. If you show interest in making an offer on a property, the agent will want to report back to the sellers about what calibre of a potential buyer you are, if the agent says to the seller that he does not know your 'position' both propertywise and financially, that will not impress the seller who may well decide to just ignore your interest and sell to somebody else with more demonstrable financial credentials!
We are in process of buying/selling as I type and we have been bloody lucky, we are about to exchange contracts on the house we have bought (less than a mile away and still within walking distance of my snooker club) and we will be exchanging contracts in a week or so on the house we are selling 'which sold to the first viewer'
The path has been smoothed by selling our house with the agent handling the sale of the house we have bought, he only got that business following a very frank discussion about my expectations both fee and honesty wise! So far he has been great as I think he knows, one lie or misrepresentation and he is history in a heartbeat! He has been brilliant so far and he is a nice guy as well (believe it or not).
You'll gain with your negotiating position in my opinion, you're basically showing that you're ready to go and not messing about, others will be, i've seen a lot of the young guys at work viewing houses well out of their means, but they don't seem to understand this.
If they do start messing about, which i seriously doubt in this day and age, then just view another property on their portfolio, playing the losing interest in the property card always tends to give them a kick up the backside.
I had two sales fall through sequentially within the space of 6 months due to my agents not vetting buyers properly and telling me they were good to go with AIPs and adequate deposits. When it came to it and the formal applications were made, on both occasions separate underwriters at separate mortgage providers refused the loans, despite the buyers being in possession of AIPs.
The moral of the story is that an AIP is a worthless piece of paper from a seller's perspective. To be brutally honest, as a potential buyer you can either deal with that or continue a life of non-property ownership. You will have the advantage in so many other ways compared with the situation a few years back that showing firm evidence of funds and a commitment to buy is only likely to work to your advantage, as another poster has already mentioned.
As an aside, I'm in Sheffield and the market is not turning over that quickly, even in desirable areas like S10 and S11 so I wouldn't worry about showing your hand as the likelihood is that you won't end up in a bidding war against anyone else.
Good luck with whatever you decide.
Don't take this the wrong way, but not every one in life is out to screw you !
Professional negotiation is all about good communication - sure there are times to play your cards close to your chest, but this isn't one of them.
You are in a very strong position, so don't undermine that by getting all coy about your financial position as you might put the seller off (assuming of course that you really want this property). In fact, you're more likely to secure a good deal if they are comfortable that you are proceed-able, so do everything you can to help them feel at ease.
The agent will want a quick sale so that they can take their cut and move onto the next one. Simple business. They don't get paid anymore if it sits on their books for 6 months tying up more resource (& therefore cost to them).
On that argument buyers should ask to see financial details of the seller in order to check out their 'calibre'. Could they afford to maintain the property to the right level or have they been cutting corners? Could they afford that extension or did they do it on the cheap?
What's sauce for etc, etc.
Thats called a survey.......
Cheers..
Jase
Isn't that the purpose of a survey? HIPS were tried and failed due in part to the fact that mortgage providers wouldn't put their trust in a report paid for by the vendor, hence we're back to where we were before they were introduced.
None of the procedures the OP took issue with are recent innovations to the property market, and are probably only newsworthy if you are a new entrant and not familiar with what is generally accepted as the status quo.
I don't see how it's can effect your negotiating position in the slightest. As I see it the wealthier people are the harder they negotiate. It can be like trying to get blood out of a stone trying to bid up a wealthy client when they are buying, or trying to knock one down when they're selling.
You anti agent lot would be the first to complain when an agent fails to check out a viewer who subsequently buggers a loved one, but ask see your bank balance - no chance!
Like any situation, an agent is more than pleased when a purchaser is well prepared and part of preparation is to prove your own financial position. It strengthens the agents case to the vendor in terms of negotiation, not weakens it.
When a buyer has had a survey/valuation and defects are shown, they come waving their report, demanding £££££'s off. Why? Because it substantiates your position.
Anyone with this attitude would not buy from me and my clients would not deal direct as they have my trust, not the trust of the person who is trying to get them to sell for the lowest price possible (usually because they can't afford it and nothing to do with whether the price is wrong or right).
Yes, exactly. The survey answers legitimate questions from the potential buyer WITHOUT intrusion into the details of the seller's private financial information.
Buyers should be accorded the same respect. If sellers need assurance that the buyer can afford the deal then they should get that without agents demanding access to private financial details.
I'd say of you are buying a house the information relating to the finance required to buy a house cannot be kept private forever. You have, at some point, to disclose it - to a bank and to a solicitor.
It's not about prying into your financial affairs not relating to the house purchase, its about relavant funds.
On the basis you state it could be argued that registry checks intrude into the sellers land ownership affairs.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
Just to wrap up this discussion.
We met with the agent yesterday with all the necessary information at hand, and ready to discuss and finalise our offer etc. Only to find out that apparently the owner has communicated that he/she didn't expect an offer below a certain amount, and therefore we were asked to increase our offer.
Nothing out of the ordinary there I hear you say, however, the problem is that this could have been communicated to us over the phone, which would then allow us to consider whether we wanted to make an offer and the amount we would like to increase our initial offer by. So, apart from the fact that both me and my wife had to leave work early meaning running like crazy for me to return from London and my wife to cancel afternoon appointments, we were put in the position of yes we want to counteroffer/no we don't without actually having the chance to discuss this in advance.
Bad professional approach, bad timing? I don't know but annoying nevertheless.
We left without raising our offer eventhough the agent was trying to assure us that this was unexpected, they would have called us etc etc.
This is when the agent earns their fee... They need to find a way to get you back to the table..... Do you know the history of the house your considering ? Has it been on the market long? Are the owners downsizing / moving up / moving away ? How long have they lived there? Lots of factors to understand how motivated they are for a sale.. Does the agent think the seller is being realistic in their expectations?
Cheers..
Jase
Wow, you must be mad. Tell them your offer stands for 3 days then it is withdrawn.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
Understand your frustration, but we agreed to sell our house a few weeks ago...only to find out a week later that the couple could not afford my house. This was due to not being able to get a mortgage because they didn't have enough deposit. I was extremely frustrated - mainly with the agent for not qualifying them properly! Can see your point of view, but there's a lot of time & money lost with timewasters!! House buying/selling process should be more like Scotland! Or even better..like buying a car - should take deposits etc.
Rant over
Its a shame this discussion isnt in The Bear Pit, as I think you may then have recieved some rather more blunt opinions about Estate Agents in there.
There are a few good ones out there, but the vast majority are utter...
So true!
How many other businesses get away with charging thousands of pounds per customer for practically ZERO outlay??? Scumbags! Apologies to any estate agents on here (I'm sure you're an exception to my rule!)
The difference lies in disclosing information to someone who is working for you and someone (in this case a vendor's agent) who is not working for you.
The Land Registry is a public agency recording land transactions and title - anyone, whether or not they are seeking to purchase (or sell) a property, can have access to the information kept there, for a small fee.
Surely the issue was the "verbal offer"? The agent is entitled to some comfort as he tells the vendor he has a purchaser on the basis
of that verbal offer. Is the OP requiring or expecting "exclusivity" on the basis of that unwritten offer?
Proof of funds for deposit & AIP seems quite fair to me.
______
Jim.
I work with contracts on a daily basis and understand very well the issues around exclusive and non-exclusive options. Leaving aside the original comments about whether looking into my financial details is/isn't necessary (delete as appropriate) my main problem is the lack of proper, shall we call it, duty of care towards a potential buyer. The fact is that the agent should have informed us in advance of the verbal rejection (verbal works both ways) of our offer by the vendor and not bring us in to ask us to raise our offer.
I should have actually mentioned that the agent intentionally set the starting price low (he actually mentioned this) to attract more people at that price range.
Anyway, learned my lesson and will be much more prepared next time.
From the comments made in the opening post, the appointment was made for you to produce proof of ability to purchase. Perhaps the agent had not even submitted your offer at that time.
By preparation 'next time', does that mean you will comply with fair requests from the agent, ask the mmbers of a watch forum, or simply make up your own rules as you go along?
Last edited by burnsey66; 19th July 2012 at 07:36.
Hahahahahahahahahaha Zero Outlay...Classic! Try £1000 per month to be on rightmove, £500 per month for findaproperty and primlocation, £2000 per month in the local paper for a page every week, before we even start on the cost of having offices, for sale boards, printing brochures, petrol, PL and PI cover, oh and paying for good staff that can value houses correctly, have the right marketing skills and local knowledge. ;-)
Having bought and sold at Christmas, it bloody stressful and was a pain.
One good estate agent the agent we bought through, chased the whole chain communicated well, especially when the people who we were buying from started trying to renegotiate. As another party made a higher offer, but by us proving our position and the other party not being able to do so we still got the house.
Our agent was a nice bloke but was very average in his performance we had 4 offers on our place and he could not tell us anything other than what the buyers had told him about their financial positions. We accepted the higher offer and the buyer couldn't get the money two later, but thankfully the 2nd offer was still open to buy so no big drama, but could have been a different story.
Good agents are a big help but most of them are not. Good luck with the deal seams like you are now getting messed around, try not to get emotialy attached till you buy really hard for your Mrs if she's like mine. And expect the worst and that most people you are going to buy from are fools.
Estate agents are either good or bad, there never really appears to be middle ground, i remember in 2001 buying a house through an estate agent chain in the southwest, and they were a nightmare, first off, they called my wife in to discuss a bid, and basically tried to pressurise her, with some seriously underhanded stuff, luckily my company was paying for the legal side so a few solicitor calls and it was fixed, but later, when buying the house we finally moved in to, the estate agents almost ruined it, we actually went straight to the sellers, sat down and said our bid was in for the asking price, everything was ready, why were they not interested, they said they hadn't been told and were desperate to move quickly, after that chat it was all done in about a week!
But, that was a one off for me, moving back up to Scotland and all was well, helpful estate agents, when i moved down here the estate agent we dealt with when buying was a star, guy was going through hoops to get us a house, when we found one, deal done nice and easy.
I do think sometimes the biggest problem with the housing market is the fact people selling list it too low to get interest, or too high to see if the market is doing well, like watches in SC, when i list one, it's for the price i want, i've not inflated it by 100 quid so that it can be knocked down and both of us are happy, neither is it listed 100 quid lower, so that i can have some sort of auction, i ask for what i want to simplify it, if everybody did this, it would be a hell of a lot simpler as it would remove that initial gauging the market phase, of course you have to reduce if there are things that are wrong with it, or if circumstances change, but the right price at the right time would make it easier, as well as buyers being realistic with what they can afford, i hear guys at work go on about buying houses with next to no deposit and 230k mortgages, which would be 5x salary, honestly they need to be realistic.
The one thing i would add though, buying or selling a house can be a demoralising business, and it's easy to get downbeat about it and blame everything going against you, estate agents do tend to be easy targets, but in reality, most of the time they're out there trying to earn a living, and to do that they want quick and easy sales, not complicated and protracted ones, which cost them money in the long run.
Last edited by Argee1977; 22nd July 2012 at 10:57.
The estate agents main aim is to earn their commission. They sift out the time wasters by asking for proof that you are eligible for a mortgage via a DIP which is adecision in principal confirming that your credit is good and you can borrow and also that you have a deposit in place.
If you don't have the funds then they just move on to the next buyer. In all honesty they have a duty of care to the vendor to make sure that they are providing someone who has the means to buy and complete on the sale.
Holy thread resurrection batman!
"Bite my shiny metal ass."
- Bender Bending Rodríguez
He's doing rather a lot of it. Must be desperate to buy something.
Although no trees were harmed during the creation of this post, a large number of electrons were greatly inconvenienced.
cheers stooo
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