Should estate agents check your financial status to validate an offer on property ? 20 April 2006 at 2:52PM edited 30 November -1 at 1:00AM in House Buying, Renting & Selling 15 replies 6.1K views

Sir_Walter_Raleigh

I have just made a first offer on a property and to my suprise the agent would like me to speak to one of their financial advisors to validate my financial status and the affordability of the offer. Alarm bells rang immediately as I have never had this type of conversation on previous purchases and after the BBC Whistleblower expose a few weeks ago where "in-house" financial advisors for agents passed on buyer's financial information in order that the agents knew how much to push buyers up on the price, I am quite sceptical. Has anyone else experienced this kind of thing ?

Tassotti

Good afternoon, Sir (bows head)

Most agents in my area try and force their own FAs onto purchasers, so it is not uncommon.

Most of them claim to be independent, but it is 'strange' how they tend to push for just one lender's products.

Do you have an agreement in principle from any lender yet? Have you applied for a mortgage?

If not, seek out a fee free whole of market independent financial advisor. They may even get you a better deal than you can yourself, then get your FA to clarify your offer to the EA.

Doozergirl

The answer to your heading is yes. Definately. As a vendor, I want proof of a potential buyer's ability to buy my house, as soon as possible. Have you seen a morgtgage advisor yet at all? You should really do this before making offers.

If you have, just give their details to the agent and they can verify with them directly. If you haven't, you don't have to speak to their advisor but you will need an agreement in principal from a mortgage lender to prove that you're a bonafide buyer. If their broker is independent and whole of market, there should be no harm in speaking to them otherwise you need to find an independent, quick smart! You may have to speak to their person to keep the vendor happy in the meantime - you don't have to commit to a mortgage through them.

xela_17

As a seller I was definitely pleased when my buyers spoke to my EAs FA as I then knew they could afford the house. However, I would have been just as happy with an AIP from a lender. Sellers (and EAs) just want to know you can afford it as asap and won't drop out 2 weeks down the line when you realise that no one will actually lend you that much.

Strangely, the EAs from whom I am buying have not asked for any proof of financial viability from us, nor have they asked us to see their FA. I guess my sellers aren't too concerned.

Sir_Walter_Raleigh

Many thanks. My FA tells me that a mortgage lender has given him a "verbal" agreement in priniciple regarding our situation and doesn't forsee any problems as our deposit is over 50% LTV of the property. Does the agreement in principle need to be in writing from the lender ?

Doozergirl

A conversation will probably do it, but if they do want it in writing, it's still your FA's bag. Just give your FA's telephone number to the estate agent and let them fight it out between them. You don't have to see their advisor, so don't let them bully you.

xela_17

I think if you just get the EA to speak to your FA it should be ok. Just give the EA the details and say they can ring your FA for confirmation of your ability to proceed.

xela_17

Doozergirl and I were obviously thinking as one... :eek:

Monkeybutt

This happened to me when we purchased our house, spent about 10 minurtes talking to him about various things, no hard sell, just non intrusive fact finding before the vendors went any further, seemed perfectly acceptable and reasonable to me.

AndrewSmith

It is quite common practice and is actually used as a selling point for the EA when looking to secure an instruction (we verify the validity of every offer etc).

If you are in any doubt get your FA to speak with the EA FA and tell him simply whether he has an agreement for the mortgage sufficient for the offer being put forward. No nother information need be given at this stage.

Andy

Wickedkitten

we just ended up getting a certificate with how much we could borrow on it which I do have to say i was reluctant to let an estate agent see but thankfully they never asked to see it.