Offer Advice/Proof of Deposit

MrDerp

I have recently seen a house that is owned by a distressed seller (the guy has just moved into a nursing home and needs a quick sale). I was reluctant to buy in the current market as it is clear that house prices will continue to drop for the foreseeable future, but the house was reasonably priced and there was scope for further discounts.

The property was initially on the market for 190k and within 2 months had been reduced to 170k. After viewing the property, I decided to make an offer - befitting the circumstances - of 135k (~20% below asking). This was rejected so I decided to up the offer to 140k and made it clear this was my final offer. A few days passed of me firmly rejecting the EA's proposals to increase (I was told the vendor's minimum was 150k, which then became 145k).

I was then asked to provide the EA with proof of deposit. I have read that showing the EA your hand is generally bad practise, but I do have a big deposit of over 30% and - given that a quick sale was needed - I thought providing evidence of this would give me the upper hand. However, after providing this proof the offer was rejected once again.

My question is, why would the EA bother asking for proof of deposit if the offer was going to be rejected again? I am now being asked to go see the EA's mortgage advisor. Again, I am in two minds about this. On one hand, I would again be showing that I can afford substantially more than 140k but on the flip side I would be showing that I am in a strong financial position and could complete very quickly!

Is it worth meeting their MA to show that I am in a strong position? A lot of deals seem to be falling through around my area so proving that I can definitely following through to completion has to work to my advantage...I think!

Any advice would be greatly welcomed!

Gwhiz

I would ask the EA why - they are the only ones who know why your proof was not good enough

MrDerp

Do you honestly think I'd get a straight answer from an EA?

I assumed that the proof of deposit stage came after an offer was accepted, not during negotiations. Unless they wanted to use this as a bargaining tool with the vendor?

I'm determined to not overpay on a property that will probably lose 10-20% of its value over the next few years!

Frittered_Away

Just be aware that if you see the EA's MA, they will know how much you can spend.

And EAs don't seem to understand the concept of not wanting to buy the biggest most expensive house you can possibly afford.

hcb42

I wouldnt see them. They will either accept your offer or they wont, nothing in it for you, presumably you have your mortgage in place.

Pupnik

Frittered_Away wrote: »

Just be aware that if you see the EA's MA, they will know how much you can spend.

And EAs don't seem to understand the concept of not wanting to buy the biggest most expensive house you can possibly afford.

The mortgage advisor isn't supposed to tell them but of course who knows. We had to speak to our EA's mortgage advisor before they would even let us view properties but by the time we had to put our offer in we just played dumb and made it seem like we were stretching our budget. If they knew we could have been able to afford more they could hardly come out and say 'well actually we know you can get a mortgage of £xxx!'
Definitely agree about the second point- when we were making our best and final offer the EA was saying 'so this is the most you can afford?' No of course not but it is what we felt comfortable paying with a relatively short mortgage. It is people overspending on property that made the housing market this messed up in the first place.

WhiteHorse

MrDerp wrote: »

I was then asked to provide the EA with proof of deposit.

Asking for proof of funds is common when fast completions are required. There are so many time wasters and dreamers.

I am now being asked to go see the EA's mortgage advisor.

It's a stitch-up. You won't get the best deal and they will get a fat commission.

Do you have a mortgage arranged (not an 'agreement in principle') elsewhere? If not, then fast completion deals may not be for you.

Is it worth meeting their MA to show that I am in a strong position?

No. You have already done that. They just want to get you into the office to give you a hard sell.

Guitar

[FONT=&quot]I'm in a similar position. I've made an offer very close to their last counter offer and they asked for proof of AIP and deposit before they'd put my offer forward. I was reluctant to provide this as it'll mean they see how much I can afford but eventually provided the evidence after deciding I wouldn't be willing to increase my offer anyway. It shows I'm in a strong position to proceed even if they're doing it to see how much more they can squeeze.

Still waiting for them to come back to see if the offer is accepted, now that they can see I could afford more I think it's possible they'll push for more. In which case I'll be walking. A house is worth what I'm willing to pay, not what I can afford.[/FONT]

ess0two

MrDerp wrote: »

Do you honestly think I'd get a straight answer from an EA?

I assumed that the proof of deposit stage came after an offer was accepted, not during negotiations. Unless they wanted to use this as a bargaining tool with the vendor?

I'm determined to not overpay on a property that will probably lose 10-20% of its value over the next few years!

Seems you'll struggle trying to factor in price drops that aint occured yet.
Like buying a car and expecting the dealer to knock off future depreciation.

tyler80

And EAs don't seem to understand the concept of not wanting to buy the biggest most expensive house you can possibly afford.

Too true, we put in a final offer on a property and after it was rejected the EA suggested we see the inhouse mortgage adviser to see if they could find us a better deal so we could afford a bit more until I explained that it was the max we wanted to offer not the max we could afford. It just didn't compute to her.