Tell estate agent about size of deposit?

ciano125

pawpurrs wrote: »

Sorry But I Disagree with the above, to Me its vital infomation, having had THREE buyers turned down for a mortgage, the bigger the deposit the better, and the more confident I would be to accept an offer from them.
Someone with a 5% deposit is going to struggle a lot more than someone with a 50% deposit, and I believe it is the EA and the Vendors Buisness to know, that finance is in place, size of deposit etc, best to be above board, open and honest. Just because you have a larger deposit, does not mean you would pay more for the property.

A fair point, but I still dont think than an EA needs to know the exact amount you have. I think they would be more likely to try and screw an extra few grand out of you if they knew you had it, and it wouldnt make any difference really if you had a 15% deposit or a 40% deposit, you can still get a mortgage with the smaller amount.

ciano125

Gwhiz wrote: »

I am fortunate that I paid of my mortgage years ago so have been able to buy my last 4 houses for cash. Every time I tell a seller (private or a developer) the fact that I do not need any financing gets them very excited and very willing to do a deal very quickly. I'd say it's an incredibly powerful bargaining tool and makes you a very attractive buyer, so definitely worth letting on!

Cash generally is king, but the OP isn't a cash buyer, unless they're buying a REALLY cheap house!

pawpurrs

Any GOOD EA should be seeing a mortgage aip and proof of deposit to check the purchaser can procced, however these can be seen AFTER a price has been agreed if you are concerned about letting on exact amounts.

chickmug

My job, if I was acting for my seller client, is to make absolutely sure we know the full facts of those making offers. This includes where the total amount of purchase price would come from whether it is a mortgage, savings account or wherever. Not the specific details but to know of the loan requirement so therefore how much of their own money they will have.

Surely those selling will understand this as they would not want a chancer to offer and to find out somewhere down the line the buyer is short and asking for a reduction.

Now here’s a real fact in agency work ---- and other agents will confirm this. Those who are the most guarded with their financial circumstances are the ones most likely to be spinning a tale and be very tight on funds. Goodness knows why they do this but some do. We’ve had those who do not like being asked, even though we would be very sensitive and polite, and who have tried to approach the seller direct saying we had been unreasonable. But I can’t recall any seller that was drawn into this ‘web of deception’ approach.

Furthermore members of the NAEA must adhere to this rule: -

c) You must take reasonable steps to find out from the prospective purchaser his source and
availability of the funds for buying the property and pass this information to the client.

In our case we satisfied ourselves but didn’t tell the sellers the specifics (loan required and cash available) other than we were persuaded the buyer could afford the property. We were just so pleased we had a sale and never played silly games of trying to nudge up the offer because we knew the buyer had some leeway.

PasturesNew

typeractive wrote: »

...it's much easier for me to give the logical advice to others than to sort myself out

I'm like that. When it's my turn I know I'll be here and stressing like a n00b.

ciano125

I would have thought that if someone had got a mortgage in principle that they could show the Estate Agent, that proves that they have enough funds to have a deposit and therefore a mortgage, otherwise the lender wouldnt have given them the Agreement in Principle.

If an Estate Agents asks me for proof of a deposit, I'll direct him to my Financial Advisor who will only say "yes, he can afford this property" or "no he can't".

I appreciate that the EA has to take all necessary steps to ensure that the buyer is able to proceed, but that doesnt necessarily mean that they can go through your finances with a fine tooth comb, as I've shown above, there is more than one way to skin a cat!

typeractive

pawpurrs wrote: »

Sorry But I Disagree with the above, to Me its vital infomation, having had THREE buyers turned down for a mortgage, the bigger the deposit the better, and the more confident I would be to accept an offer from them.

Yep - I'm hearing you on that. I guess there are two sides to the coin here. That from a purchasers point of view, and that from a sellers point of view. The later being experience from yourself by the looks of things.

Someone with a 5% deposit is going to struggle a lot more than someone with a 50% deposit, and I believe it is the EA and the Vendors Buisness to know, that finance is in place, size of deposit etc, best to be above board, open and honest.

It doesn't really matter if they're going to struggle or not - that's the buyers concern. I agree the EA and vendor need to know the money is in place, with the AIP - that should be good enough.

As I previously stated, informing the EA that you are in a strong position to buy and ready to proceed should help (of course not everyone tells the truth mind - but you could say the same of someone saying they have a big deposit - unlikely people would do that I know.)

Just because you have a larger deposit, does not mean you would pay more for the property.

Yeah - you may be right there. Being in a strong position to buy might help you to negotiate more. It's all swings and roundabouts I guess, and it just depends what way ya look at it.

ciano125 wrote: »

If an Estate Agents asks me for proof of a deposit, I'll direct him to my Financial Advisor who will only say "yes, he can afford this property" or "no he can't".

That's a good idea. The more I think about it. Once an offer has been agreed (accepted), the vendor is probably (I'm assuming her as I've never sold a property) more inclined to get the ball rolling. I intend to keep my vendor (should I offer and they accept) in contact and up to date with every moevement - keeping those doing the work for me in contact.

I think demonstrating your commitment and that you are a serious buyer as best as possible with good communications and updates on proceedings shows you're good for the sale - well I hope so as I intend to play a very active part throughout the entire process to make sure it goes to plan.

Some good points raised here

Foggy

I didn't have a mortgage agreed when I made my offer but let the EA know I had a good deposit and wasn't borrowing 3 times my income. They 'invited' me in to prove my credentials which I thought was fair enough in the present climate of offers being accepted but mortgages not being approved.

By the time I went in I had a mortgage agreed in principle so they spent half an hour going through a home insurance quote :rolleyes:. A bit naughty but I went along with it. The vendor took the house off the market for viewings etc so it all seemed fair enough to me.

chickmug

ciano125 wrote: »

I would have thought that if someone had got a mortgage in principle that they could show the Estate Agent, that proves that they have enough funds to have a deposit and therefore a mortgage, otherwise the lender wouldnt have given them the Agreement in Principle.

If an Estate Agents asks me for proof of a deposit, I'll direct him to my Financial Advisor who will only say "yes, he can afford this property" or "no he can't".

I appreciate that the EA has to take all necessary steps to ensure that the buyer is able to proceed, but that doesnt necessarily mean that they can go through your finances with a fine tooth comb, as I've shown above, there is more than one way to skin a cat!

I appreciate peoples reluctance to give the information away but like all other things in life it is the way the agents explains why it is needed.

Again if I were acting for you, as a seller, wouldn't you want me, as agent, to verify the buyers capability of getting the money?

Bear in mind if I was acting for you and went about it the way you suggest there are serious flaws. I have dealt with more than one FA who has bullshi**ed through to tell me their client can get the finance and so NO PROBLEM. But there could be and are regularly problems. I for one do NOT take the word of all FA's as some are low in integrity but would take the word of local ones who have a proven track record of which I am aware.

Three cases, just before I retired last year, were three 'hard to sell' properties all £500,000 + and in each case the FA said no problems. I let the seller decide whether to proceed as I felt they were all too tight and in each case, one by one, there was a shortfall with the offer. In each case the FA's, who all were from out of my area, arranged a personal loan of between £15,000 and £25,000.

So what happens is that the FA says 'no problem' but because the buyer is borrowing right up to their limits and there may be a down valuation or another factor which means they have to dig a bit deeper but not a penny more available

Sorry to labour this point but all agents, acting for the seller, MUST make sure they DO know more the details than some are suggesting. If they didn't how would the seller feel a couple of months on and the buyer can't raise the full amount of money - the only course of action for the buyer is to gazump?

However if you are on the buying side and trying to dodge giving the information that is your perogative but you will need to find a poor or weak agent to avoid being taken to task on the matter.

ciano125

chickmug wrote: »

However if you are on the buying side and trying to dodge giving the information that is your perogative but you will need to find a poor or weak agent to avoid being taken to task on the matter.

I appreciate what you're saying, and perhaps not everyone is as honest as I am. If I'm buying a property and my credentials and word when I say I have the money are not good enough for the seller (although they are evidently good enough for my mortgage lender) then so be it. I'm always upfront and honest and expect the same in return. If someone can't accept that, we won't be doing business.