Frustrated by unprepared FTB

xela_17

Old_No.7 wrote:

He did give us an indication of how much we can borrow...

I agree that sometimes an AIP can be hard to come by but they could at least have done this.

Maybe I wouldn't be so frustrated if we weren't finding it so difficult to sell. Changing EAs in 2 weeks though so maybe that will perk things up.

AndrewSmith

Old_No.7 wrote:

From a FTB perspective: I contacted broker London & County a week ago about this and he advised against it! Said that by the time you find a place there might be other deals on the market you want to go with. So please don't blame it on the FTBs: they might have just been following advice from the professionals. He did give us an indication of how much we can borrow, but didn't ask for any proof of income etc. Said to call back when we found a property...

The only reason you were told this by L&C is because they only want to speak at length to people who are ready to proceed, and do not want to invest any more than the minimal amount of time with someone who has not found a property.

From the point of view of a potential buyer, you will be taken far more seriously by an seller if you have your mortgage agreed in principle and, quite logically, you would know realistically what you could afford and that you already have agreement from a lender to proceed (as long as you have provided correct information).

The advisor at L&C is actually incorrect, as when you obtain an AIP it does not mention a specific rate or product merely that a particular lender will lend you up to a set amount. Although the amount may vary slightly from lender to lender it gives you a guide as to what is available.

Of course the adviser at L&C advised against it for a couple of reasons:

1) They don't do them
2) They don't want you going to another broker who does do them
3) They only want to deal with people who have found a property and who are ready to proceed.

I have nothing against them as a company but I think it a little irresponsible to be telling first time buyers that an AIP is a waste of time.

I couldn't disagree more.

Andy

worriedfirsttimebuyer

We are FTBs and looked at a house that was just beyond our price range because we loved it so much. We wanted to gain info from the seller about whether he'd be willing to negociate on the price and would it be worth us getting an AIP.
Seller said he'd had 2 offers fall through and actually named a price we could have it for. We offered a bit below that and got it.
So it works both ways!

david29dpo

just put my flat on the market at £74950, so likely to be ftb. when i was talking to the agent, they said they now have to check if the buyer can afford if only if they wish to put in a offer, not before. so i, like you, are likely to get viewers who cannot afford it! not a lot you can do about it unless you only allow viewers who have been checked. i will see how i get on with my viewing first and if i get a lot of time-wasters i will have a chat with the agents to see if it is possible to do this.

AndrewSmith

Hi David29dpo,

You will probably find that this is because they refer business to a mortgage broker who will only deal with clients when they have found a property. He is probably paid per introduction on the condition that they are ready to proceed. The Estate agent himself is not qualified or authorised to say whether the buyer can or cannot afford the mortgage or property.

I think the tool of AIP or DIP is excellent for a first time buyer. How can anyone expect someone who has never taken a mortgage to know what a lender is prepared to offer them, and how the whole process works from an unbiased viewpoint without the spin of any particular lender?

I have absolutely no problem visiting clients before they have started looking at properties to discuss the mortgage and housebuying process, and ultimately give them the figures involved and get an AIP. It helps these buyers when they are offering against another buyer as the agent and buyer is far more likely to go with someone who's taken the time and trouble to look at their finances and gain agreement from a lender (subject to the information given being correct), as they will be viewed as taking it seriously. We all know how annoying it is when someone offers on your home only to pull out later because they cannot afford the mortgage payments.

Also, from a business point of view, clients appreciate the time invested initially by the broker gaining an AIP and going through the process with them in detail. My initial meetings can take up to 3 hours in some cases without charge to the client. I will also assist them in looking for a property by contacting local agents (who know me by now) and getting them to send details through and notify us of any properties coming onto the market etc. I will then even place the offers for the client, should they wish me to, to help stop the usual 'tactics' employed by some estate agents.

I have been using this approach for over 10 years and have always had excellent feedback from clients and Agents alike. I guess it's why I retain 8 out of 10 people I have an initial consultation with.

Putting in a little time and effort at the beginning will show the client that you are actually interested in their situation, but more importantly it helps both seller and buyer by establishing what is affordable before the buyer even sets foot inside an estate agency.

If it ain't broke - don't fix it.

Andy

david29dpo

have i been told a lie by the agent? he said they have to check the finances of the buyer before they can put in a offer. or is it a case of they would like to and and try and flog them a mortgage? i must admit, if i was a buyer, i would arrange my own mortgage first, look round houses, and make a offer. if the agent then asked me about if wanted there help with a mortgage i would say no thank you. if he then asked me he needs to check i would tell him its non of his business! i am right?

AndrewSmith

If the agent asked for proof of the mortgage etc, I would give the Agent your broker details and simply tell him to speak to your broker who can confirm that a mortgage is in place (without giving out details such as earnings etc)

We all saw the whistleblower documentary regarding the way Alxander Hall were discussing personal details with the Agents. Be assured this is the minority and most of us don't operate that way.

Don't however think it suspicious when an agent asks for proof of mortgage or affordability, he is simply acting in the best interests of his client the seller by ensuring that the viewer is not a time waster.

The best thing though is simply walk into the agents, make the offer and hand them your broker's business card and say 'he's arranging the mortgage, call him'.

Despite what agents may tell you, you do not have to sit with their advisor.

Andy

dander

Even if a FTB hasn't got a complete offer in principle surely they should at least have talked to a broker (or their own bank if need be) who will advise them what kind of money they can afford. To go out viewing properties without a solid idea of your budget is plain stupid!

AndrewSmith

Dander, I couldn't agree more.

Andy

Heth_2

My experience was also that estate agents like to try and persuade you to go and see houses that are just outside your budget. We have gone to see lots of houses twice in our search, and then decided not to buy them because they were a bit too expensive, or because of reasons that I guess we could have decided on based on the details/first viewing alone (e.g. size of garden). I suppose we could be accused of wasting peoples time, but we also had to be certain about which house to buy.