Have made an offer on a house. The estate agent has asked to see my mortgage agreement in principle and the amount it's for.... now the agreement in principle shows the value i'm planning to borrow and the loan to value.
Now the problem here is that if the estate agent can do simple maths he'll realise that my agreement in principle is for a fair bit more than the offer i've made. Thus handing him a considerable advantage in negotiations.
I vaguely recall having a similar conversation last time I bought a house ten years ago - I think I told them to forget it and they stopped asking after a while.
Is this now a thing? What have other people done in this situation?
Yeah...
I used an online AIP from Lloyd’s it said the future I asked for and a line to say “we could lend you” blah blah blah I just redacted that.
Frankly these days if I have to send stuff like that I use Adobe to edit it to say whatever I need it to say.
It's absolutely normal. Nothing to do with negotiation position, absolutely to stop people offering x then finding out the bank will only loan x/2
Don’t forget there’s a big difference between what you can afford and what you’re prepared to pay.
We could’ve borrowed a lot more than we did and the vendors estate agent knew that (we previously tried to buy a more expensive house but that fell through because of that vendor losing their job and no longer wanting to move) but we were clear, polite and firm about what we were prepared to pay.
Mostly the agent is trying to protect their client from time wasters who might later behave badly to try and get the price down to what they can actually afford. Ultimately the agent wants the sale to go through and doesn’t care less about +\- £15k. They just want their 1.5% commission upon exchange
Edit- we shared our DiP, as it confirmed we were serious buyers
I get you, I hate this too, as RicB says though, who cares what they know, just tell them what its worth to you end of. I remember an agent in the 90's who used to say no viewings without having our financial review first. (Connels I think)
Or show agreemment in prinicp to your solic and get a letter from them confirming that in principle you have access to the funds required for this purchase.
I do wish lenders would be more amenable to buyers though..
Money laundering laws. Sod all you can do about it. Send it in.
I don't think thats an estate agents job, its the solicitors. The agent just wants to be sure they get their comission. They have no formal role other than parasite.
Money laundering laws. Sod all you can do about it. Send it in.
I'm not convinced about that.
When I bought my place the estate agent asked for an agreement in principle. I told him I didn't have one as my mortgage broker didn't do AiP's as he deemed them pointless. I gave the brokers number to the estate agent and they called them up. They had no problems whatsoever with that.
I don’t think thats an estate agents job, its the solicitors.
When did you last look into this?
I tried to buy a house 6 months ago and both soli ans EA had a legal obligation to check these docs.
Happy to be corrected by anyone with different direct experience of buying a house on the last five months....
Not EA, its an unregulated industry.
https://www.naea.co.uk/lobbying/money-laundering-regulations.aspx
They are scum reveal as little as possible and get the solicitors to sort it all out ASAP.
Most likely the Estate Agent just wants to check you can borrow enough to actually buy the house. The fact you can borrow more won’t bother them.
However, they may try and twist you’re arm into using their pet mortgage broker. If so tell them to F off.
Much as I dislike estate agents, one (the only?) element of value that they add is ensuring those making offers are good for it.
It frustrates them as much as the vendor if an offer turns out to be whimsical and everyone gets let down and has to start again.
Honestly don't think they care about your buying power, other than you have the funds to support the offer you are making.
Bear in mind that they've probably twisted the arm of the vendor to accept your low ball offer (hypothetically of course).
They just want their commission, and for that they need to know that your money is where your mouth is.
Chill.
When did you last look into this?
I tried to buy a house 6 months ago and both soli ans EA had a legal obligation to check these docs.
Happy to be corrected by anyone with different direct experience of buying a house on the last five months….
Yep, seems to be a legal requirement to check. Had offer accepted in March, and I think they were in touch with my broker. But my deposit wasn't in place at that point, so no idea how they ascertained I had full full funds in place if they did check.
You could show them the AIP but cut out the LTV. If they subsequently ask to see proof of deposit, extract the difference into another account then send them a statement 😉
I always ask for proof of funds before formally accepting an offer on behalf of a client. I usually do this after negotiations (unless i suspect something fishy).
It is simply to check affordability and make sure they are serious buyers before we take the property off the market.
Yes, I suppose the buyer could forge the Decision in Principle but you’d have to be a bit off a **** to do that. It costs nothing to get a DiP and if you have to forge one then you shouldn’t be making offers.
Also, not all agents are scum and/or parasites. Admittedly I know a hell of a lot who are and I think that historically the profession attracted a certain type of person but times are changing. You get bad eggs in every profession though.
My wife and I started doing this 5 years ago at 35 (after working in a completely different professions) and i can tell you now it’s a challenging career. Way way harder than i expected it to be. Long demanding hours - which is also part of being self employed and caring about your business and customers.
Ive also met a lot of amazing agents along the way. Its easy to be a bad agent but ask anyone who’s had a good experience with an agent that cares and fought for a good result and I am sure they will tell you they were worth the fee.
OP, feel free to DM me if you need any advice along the way. I’ll gladly help if i can. Good luck!
Thanks all, let's see what they say. Pretty certain it's nothing to do with money laundering rules tho - the solicitor is obliged to check that, not the estate agent - they don't have any contract with you.
I guess my main problem is that I got the AIP for the price it's on the market for but have offered a fair bit less, as a somewhat cheeky offer... the estate agent knows we want it. Hmmm.
Photoshop
The commission earned by the agent will be roughly the same whether they get the asking price or 5-10% less. Their interest is solely to make the sale, and if they advise the seller to hold off on the price and you pull out, then they've lost their 1% and have a pissed off seller to deal with.
As a seller I'd be far more wary of the estate agent encouraging me to accept a low-ball offer than the other way around. When I sold my last place I offered a pretty substantial cash bonus to the agent if they managed to get the sale within 3% of the asking price. It worked out quite well.
If you don't want the estate agent to see the total amount the bank is willing to lend you then just Tippex it out, though I imagine they'd be able to take a good guess based on experience.
Totally normal - after trying to use the self serve selling platforms you quickly realise half the people doing viewings are time wasters on a day out.
Quickly gave sale to an agent that demanded this to save the pain.
They are scum reveal as little as possible and get the solicitors to sort it all out ASAP.
massively offensive inaccurate sweeping generalisation there! Pointing to solicitors to sort shows you have little understanding, given they are the cause of most issues through the whole house selling/buying process.
massively offensive inaccurate sweeping generalisation there! Pointing to solicitors to sort shows you have little understanding, given they are the cause of most issues through the whole house selling/buying process.
Massively offensive inaccurate sweeping generalisation there...
Massively offensive inaccurate sweeping generalisation there…
not really, I didn’t call any one ‘scum’ also not sweeping or inaccurate as I said ‘most’ not all. But 10 smart arse points awarded. Well done!
not really, I didn’t call any one ‘scum’ also not sweeping or inaccurate as I said ‘most’ not all. But 10 smart arse points awarded. Well done!
I take it you aren't a solicitor, so you are not in a position to decide whether or not your statement is offensive. I can imagine it would be. Offensive; check.
Your statement is not incapable of being accurate just because you were woolly with the amount of problems you claim are caused by solicitors; therefore if less than half of the problems "through the whole house buying/selling process" are caused by solicitors then it isn't most, is it? Lets pretend that your statement couldn't be extended to removals, estate agents etc just to give you the benefit of the doubt. Inaccurate; check.
Sweeping. You said that "[solicitors] are the cause of most issues..." not most/some/my solicitors are the cause of most/some/my issues. That certainly seems a little wide in range. Sweeping; check.
I fully expect that your bitterness stems almost entirely from having a bad experience whilst buying a house which likely was due to 1) picking the cheapest person to do the job and/or 2) attributing blame to your solicitor (chances are, conveyancer - see 1) for being the messenger only in respect of an issue that already existed. General statement inferred from specific cases. Generalisation; check.
And it was there.
That's proper smart arsery. I deserve far more than 10 points.
I fully expect that your bitterness stems almost entirely from having a bad experience whilst buying a house which likely was due to 1) picking the cheapest person to do the job and/or 2) attributing blame to your solicitor (chances are, conveyancer – see 1) for being the messenger only in respect of an issue that already existed. General statement inferred from specific cases. Generalisation; check.
Jesus Christ, someone Has far too much time and doesn’t like being called out!
So to make it clear, I’m not a solicitor. Guessing by the absolute drivel you just posted that you are! To be clear I did not throw a personal insult towards solicitors by calling them ‘Scum’ - you chose to pick offence over my ‘woolly’ use of the word ‘most’ to score internet points when called out for being a smart arse - get a grip
I have no bitterness towards conveyancing solicitors. I have had my own issues all of which stemmed from solicitors not following through in timely manners, losing paperwork etc. Not based on genuine hurdles, such as issues with searches etc. Just general poor management of the sales process.
I am in the fortunate position of seeing how many poor many are. Now I appreciate this may be legal secs or administrator issues, rather than the solicitor themselves. Im also fortunate enough to know the good ones, my wife being personal and professionally friends with them. It is very, very frustrating with agents being called things like ‘scum’ and blamed for hosts of issues many of which stem from solicitors not following through within a timely manner.
one thing we can be sure of is there are great estate agents and great solicitors, as well as complete rogues in both instances. My point is that calling a whole industry and the people within it as ‘Scum’ is both offensive and massively sweeping.
I think we both agree, there are good and bad. Certainly not by any stretch are solicitors the cause of most issues with the process of buying/selling houses. They may have been in your case; I don't dispute that.
Unfortunately though, the conveyancing sector (likely because of increased competition driving down costs and a resultant increase in volume of work per fee earner) is not very well paid (of course, there are exceptions) so you are unlikely to strike gold when looking for a solicitor.
Just to clarify, I didn't call agents scum, I simply pointed out the hypocrisy of your post in nothing other than a jovial fashion. You took exception with me being a smart arse and I played up to it in my second post.
I know it wasn’t you calling anyone ‘Scum’ my wife is an agent. So I take exception to her being branded that way. During the lockdown she has been working from home and I have listened to her working and her frustrations. Ironically she/we are very good friends with some conveyancing solicitors. My wife recommends them to vendors and buyers alike. Perhaps it’s the ‘cheap online’ agents that cause her problems, I know we have had issues with 3rd party agents through various moves over the years. Each time the solicitors tried to blame the agent or mortgage provider. Only for us to find out (through my wife’s contacts) it was infact the solicitors. So yes in my experience MOST of the issues come from that area of the transaction.
I absolutely agree that there are good and bad agents, conveyancers, lenders etc etc. To that point I think it’s unfair for the ‘Scum’ moniker to be thrown at ‘all’ agents. To say I’m hypocritical is somewhat pedantic.