question for estate agents re offer on house

olias

Hi,

can I ask any estate agents, and anyone else who might be able to help!

I will shortly be putting in an offer on a property. The agents are asking for proof of how property will be financed (ie sight of mortgage offer). Reason being that there are several interested parties and property is going to best and final offers.

My question is, I have a mortgage offer for up to £87000, however I wish to offer £70000 for the property. How can I show proof of mortgage to the agents without letting them know I have potentially another £17000 in reserve?

The last thing I want (or can afford!) is for the vendor and agent to know I could afford more and to play me for an increased offer.

Do I just give them a copy of the offer with the amount blanked out?

Any other ideas?

Oh and by the way, although it will be a 'best and final offers' scenario, the agents have added the caveat that the vendor reserves the right not to accept the highest or indeed any offer. Hence my concern that if they know I have potentially more available they will start playing silly bu99ers.

Olias

hamblettamaud

look, just tell them that this is your final offer and be prepared to walk off if it's not accepted.

but do be prepared to walk off.

olias

Oh don't worry, I would! I do however want this property, and am putting together a package to ensure I come accross as the best option for the vendor. However if they know I have more in reserve then this could cause them to get greedy and try and push for a higher offer. If, however, they believe that my offer is the most I can push to, then they may be more inclined to accept it rather than push for more IYSWIM.

I want to prove I am a serious buyer with finances in place, but not let on how much mortgage I have access to.

Olias

DeadCat

Cheeky !!!!!!s. They want to know what your maximum price is. Don't give them the information.

hamblettamaud

then tell them that your offer will last until the end of the week (for example) and after that it's withdrawn completely. but say it like you mean it.

i'm sure they will have heard all this before but it's probably worth a go.

hamblettamaud

actually, reading your OP properly, you should tell the estate agents that they can contact your financer (eg bank, building society, solicitor) to confirm that you have mortgage in principle. otherwise, tell them nothing else - they don't need to know.

and remember, they will need the sale more than you need the purchase.

DVardysShadow

olias wrote: »

Do I just give them a copy of the offer with the amount blanked out?

Nearly as bad. Now they will play poker on how much your mortgage is above your offer.

Tell them you can provide the verification through your solicitor - and be prepared to get your solicitor to say that they have seen evidence that your offer is valid. Otherwise, tell them tough

olias

Hi, thanks for your comments. I think the idea of showing my solicitor the mortgage offer and having them confirm it is the way to go (don't know why I hadn't thought of that!:o). My broker (London and Country) should also be able to verify by phone hopefully.

just to clarify, the agents are not asking for my maximum mortgage is, just confirmation that I have the offer (trouble is the offer letter shows the maximum figure)

Olias

mattwallisuk

I would not show them your mortgage offer with the amount. There are other ways to confirm you have financing (such as suggested them contacting your mortgage company).

We were first time buyers looking at quite expensive properties and were never asked to show a proof of financing... sounds fishy to me.

hostman

You won't have an actual mortgage offer until you have decided on the house to buy.

You probably have an agreement in principle, which is not an offer. It is an indication, based on your earnings and outstanding debts, how much a bank may lend to you, subject to all the other usual checks.

When we bought last year the agent wanted us to talk to one of their in house finanical providers to "qualify us". It was a 2 min conversation with him peddling his services, but they did not need / want to see anything else.

chickmug

Long winded from previous post but suggest you read it very carefully!

---

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.

Some will say why can’t my solicitor deal with this direct with the agent but: -
Many solicitors will not see this as their role.
Many will not see it is as that pressing.
Many will have the same problems as the EA in getting the right documentary evidence.
Solicitors will not expect to ring a broker and/or lender like an EA does

Some will say ask my bank or building society but again these bodies do not always see it is their role to act with any urgency to get on the phone, or email, or fax and prove anything and in my experience they do need chasing around. So we would of said NO get them to call us.


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 prerogative but you will need to find a poor or weak agent to avoid being taken to task on the matter.