Putting in an offer and the sales techniques of EAs

chickmug

fatpig wrote: »

My advice is if you shake hands with an Estate Agent to make sure you count your fingers afterwards.

Heard this one before on the forum - was it you last time?
By the way what work do you do?

Rebchappers

cats! wrote: »

Perhaps word has got about with regards to you pulling out the day before exchange??

EA needs to be sure you are good for the funds. Confirm you can afford what you are offering, but NO MORE!

Good Luck.

The reason we pulled out was because searches revealed that the extension on the house was built over a public sewer and the sewer had collapsed as a result! Nothing to do with our finances! We spent nearly £2k in set up costs and fees at this point and now that is lost....we have to start from scratch with a new house. I want to make sure that the property i am offering on is in a sound condition before i spend another 2k in fees, but i can guarantee they wont be forthcoming with any defects. Instead i will waste another month until we get close to exchange for something else to go wrong! Why do i have to be upfront but they dont?

Anyhoo.... its certainly not a gripe with anyone on here, but i feel better for getting it off my chest now! I guess we will just have to let them have our mortgage offer and see what happens!

Thanks for all your replies, its a great help x

GDB2222

Rebchappers wrote: »

Hopefully someone can confirm if we are being shafted here....

The estate agents have said that before they can confirm if our offer has been accepted, they require proof of how much our lender is willing to lend us...

We are not happy about this, as the amount we are able to borrow is more than the asking price for the property. The house is a repossession, and so the seller is legally bound to get the best price possible. If they can see that we can borrow X amount, but have only put an offer in of Y amount, then they will more than likely decline it as they know we can pay more for it.

This is the fallacy on which the house price bubble was based, ie 'I can borrow X, so that's what I will borrow'. Surely, it's up to you whether you are actually prepared to take on the commitment of borrowing the full X amount.

The answer in this case is simple: Show the agents the proof they want. If the vendors ask for more money than your offer, you simply say no. If they have a better offer from someone else, they will take that. If yours is the best offer, they will take that. To protect their backsides, they (the lenders) usually get 2 surveyor's valuations, so they have a pretty good idea what the property is worth, and if yours is the best offer and it's in the right ball-park they'll take it. You're dealing with an adminstrator with a load of boxes to tick. Once he can tick them all, he's not going to mess around negotiating a better price. He's got loads of other cases to deal with, and he can spend his time better chatting by the water cooler than trying to get a couple of £k more out of you.

By the way, house prices have another 20% to 30% to fall still.

Bf109

chickmug wrote: »

I make it simple - no co-operation and offer will not be put forward. I then advise the seller and 99% of the time the seller takes my advice. If you were the seller wouldn't you want your EA to make sure for you?

Arent you legally obliged to pass on any offer regardless?

chickmug

Bf109 wrote: »

Arent you legally obliged to pass on any offer regardless?

Quite right and sorry badly worded my post and since edited.

Incisor

chickmug wrote: »

... I think some people are getting unreasonably paranoid about giving this information. I make it simple - no co-operation and offer will be put forward but with our reccommnedation, to the seller, to reject unless proof of funding is given. 99% of the time the seller takes my advice. If you were the seller wouldn't you want your EA to make sure for you?

I would only be proving anything if the offer were accepted subject to demonstration of funding. Put your way it seems a bit counterproductive to prime the seller to say No before proof of funding, rather than to recommend acceptance subject to proof of funding.

Rebchappers

yeah Incisor, that is exactly what i mean. My Offer to them is subject to satisfactory searches.... the seller should accept my offer subject to proof of funding. I dont expect them to prove to me before i make an offer, that all the searches are going to be ok

I do understand that some EA have probably had many time wasters in the past, with either no intention of actually purchasing a property, or dreaming of houses way beyond their budget.

In my eyes, an offer is just an agreement between two parties that the property can exchange hands for an agreed price. Everything else like the conveyancing, drawing up contracts and the funding arrangements are all part of the house buying process, and should follow the agreement of an offer.

lynzpower

the thing is the seller, if it is a repo, is not a bog standard member of joe public, its a bank, and they HAVE to get best price for the property, unlike many of us that have taken/ will take below asking price just "for the sake of getting rid"

I would therefore ask your mortgage advisor to drop the EA an email stating your mortgage is agreed for the amount of the property, and that they understand you have Xk deposit to make up the rest. The fact that you have got more on the offer is neither here nor there, as GB says, simply say a resounding NO if they want more. You are moneysaving after all

bubblesmoney

i faced similar situation recently and initially refused then as EA said cant proceed as cant verify affordability, i later went to their office and showed them mortgage approval in principle. one of them showed the exact offer price as the mortgage approved amount less 10% (90% max allowed LTv by that bank) deposit. then the EA wanted proof that i could afford the 10% or they couldnt assure the seller that i could afford the property. so i showed another approval in principle (3m old and recently expired by a week or two and i hadnt bothered to renew it as was sure i would get mortgage but they wanted it renewed inspite of showing adequate funds (cash instant access) to tune of nearly 78% of purchase price. showed all originals but i refused to provide the EA copies which they kept insisting they wanted. as a last resort i said i wouldnt provide any copies of my finances except for mortgage approval in principle. i got a renewed approval in principle for nearly 3 times the purchase price but the EA still wanted proof of funds and i told them to accept my offer or tell me if rejected and that would not provide copies and would not increase offer under any circumstances and wanted the property off the market and no more viewings if my offer was accepted. also told them if they delayed i would look at other properties.

EA delayed taking the property off the market for 3 weeks after accepting my offer and assuring me property will be pulled offthe market, so i pulled the plug on the offer.

just when i was getting ready to make a move on another property the sellers solicitor directly contacted my solicitor and my solicitor stated my terms of offer and sellers solicitor ensured the property was off the market within 2 hours of my solicitor discussing with sellers solicitor while the EA had wasted 3 weeks and still done nothing. my solicitor told me that it was the EA being difficult.

if needed tell EA that u will get letter from solicitor confirming proof of funds. if conditional offer accepted then u will get a letter from them detailing the sellers solicitors details. if the EA is being difficult then tell them not to contact you for anything and to contact your solicitor for everything. the EA will usually not bullsh1t to solicitors. after offer acceped even if conditional then ask your solicitor to iron out any confirmation of affordability letters etc directly with sellers solicitor. thats what i did. and thats what my colleague did earlier as well and i didnt heed his advice on letting the solicitor do all the talking with EAs once ur offer accepted. remember EA will try to pester you on exchange and completion days etc. ask them not to call you and to deal with your solicitor and that you will decide what day suitable for you to exchange / complete and that respective solicitors will discuss and mutually agree details and for EA not to bug u about any of these matters.

i sent it in writing to my solicitor that i dont want any dealings with the vendors EA after the hassles they gave me and to inform vendors solicitor the same and that all dealings will be between my solicitor and vendors solicitor. i dont mind paying for the services of someone like my solicitor who does their job properly, what i cant stand are some troublesome numpties at the EA i am buying the property thru

(what i said above is just a view about my EA and not a general comment on all EAs. there are many helpful EAs like chickmug on this board and i myself have come across very helpful EAs in other estate agencies while i was viewing other properties)

iwanttobuyahousecheaply

I am also currently negoitating to buy a repo. house.

You would think I was in a perfect position - having more than enough cash in the bank from a previous house sale, so that I can pay 100% cash now. The EA asked for proof of the funds, before putting my offer to the seller. I showed a few bank statements showing slightly more cash available than my offer. The offer was rejected, and I have upped it slightly and wait to hear.

I will never know if the offer was rejected because both the EA and seller can see that I could afford more.

To make things worse, the EA says that they negoiate through a 'third party' and not direct with the Bank / Building Society (they do not even know which bank owns the house.) This 'third party' is apparantly a company that does all the dirty work for the bank - ie. deal with the repossession, get services disconnected, clear the house, arrange an EA to sell it etc. and all offers are submitted to the bank via this 'third party' company.

In this market, you would think that a 100% cash offer, only 10% less than the asking price would be grabbed immediately by the bank, but no!!!!