Why does the estate agent want to know my deposit %?

reallyjammyjam

Hello

First viewing yesterday and when I phoned up to make the appt amongst the questions I was expecting the estate agent asked what deposit we had.

He really pushed me on this and basically wasn't going to let me view the house until I told him. He said it was because the vendor needed to know. I really didn't understand this and don't see what bearing that has at all on my validity as a buyer. If anything I would have thought he would have pushed me on whether or not I had an actual mortgage offer as this would more so show how far along we are and how serious we are.

Obviously there was a reason that he wanted to know and would gain something from this information but I'm not really sure what.

Can anybody shed some light on this?
Thanks in advance!

SantaKlaus

reallyjammyjam wrote: »

Hello

First viewing yesterday and when I phoned up to make the appt amongst the questions I was expecting the estate agent asked what deposit we had.

He really pushed me on this and basically wasn't going to let me view the house until I told him. He said it was because the vendor needed to know. I really didn't understand this and don't see what bearing that has at all on my validity as a buyer. If anything I would have thought he would have pushed me on whether or not I had an actual mortgage offer as this would more so show how far along we are and how serious we are.

Obviously there was a reason that he wanted to know and would gain something from this information but I'm not really sure what.

Can anybody shed some light on this?
Thanks in advance!

I'm presuming so they know you have enough of a deposit otherwise you could be wasting their time.

gazter

reallyjammyjam wrote: »

Hello

First viewing yesterday and when I phoned up to make the appt amongst the questions I was expecting the estate agent asked what deposit we had.

He really pushed me on this and basically wasn't going to let me view the house until I told him. He said it was because the vendor needed to know. I really didn't understand this and don't see what bearing that has at all on my validity as a buyer. If anything I would have thought he would have pushed me on whether or not I had an actual mortgage offer as this would more so show how far along we are and how serious we are.

Obviously there was a reason that he wanted to know and would gain something from this information but I'm not really sure what.

Can anybody shed some light on this?
Thanks in advance!

Maybe it is part of their sales pitch to get you to speak to their 'independent financial adviser'. But the other side is it also lets them know just how serious a buyer you are. Getting a mortgage is much easier with a 20% deposit than a 5% one.

As a recent seller though, i couldnt have cared less what deposit a purchaser had, their position though, i would be interested in (ie. first time buyer/house on marker/offer accepted on house/cash buyer/ agreement in principle).

reallyjammyjam

thanks Gazter -that's what I thought. As a buyer I would have thought it was much more important in knowing 'have they got a mortgage offer and can they make an offer now or are they just browsing?'

You could be right about the ease of getting mortgage with higher deposit, but weirdly he didn't push me as much as I thought about he would have whether I have actually obtained one. I think he was slightly losing the will to live after my numerous responses of 'I don't want to discuss that with you' .

He did give up on my vague responses about our mortgage adviser but just would not budge on needing to know how much deposit I had!

SuzieSue

gazter wrote: »

Maybe it is part of their sales pitch to get you to speak to their 'independent financial adviser'. But the other side is it also lets them know just how serious a buyer you are. Getting a mortgage is much easier with a 20% deposit than a 5% one.

Yes probably. We are selling our house and had 3 estate agents around. The two large ones said that they always ask any potential buyers to see their in-house IFA. I said that I wouldn't want to deal with an estate agent who did that if I was a buyer and it would put me off viewing any of their houses. They both said they were doing it for our benefit which of course isn't true. We therefore decided to go with the smaller agent who did not have an in-house IFA.

reallyjammyjam

SuzieSue you certainly did the right thing - my boyfriend said that if he was on the phone he would have just told them to forget the whole thing! So yes the estate agent pushing viewers to do or say certain things can certainly put people off.

It was my first phonecall so at the time I had no idea if this was a standard question or not - so I did give in and gave a vague-ish answer. After all we aren't going to get very far if we can't get to any viewings!

It was a bit stressful though the whole 'don't say anything you shouldn't' experience. I told my boyfriend he can phone the next one

ACG

The seller couldnt care less. The EA is passing it off so they do not appear to be awkward or the bad people.

They probably want to know to either:
a) Ensure your not wasting time and do actually have the means to get a property.
b) Getting the ball rolling for seeing their broker.

Also if your deposit is combined with a Decision/Agreement in principle they will know exactly how much you can go up to. This means you will lose your hand and the EA could potentially push your bid up to what you can afford.

moromir

It's more likely that they know the price they want is high for the area.

On a mortgage where you have a low deposit/high mortgage percentage, the bank is less likely to give you any wiggle room on their valuation (ie whether they'll lend against it) because it means that if it loses much value, its the mortgage company that has a higher risk of not getting their money back when you come to sell it (they'll get it eventually don't worry about that).

If you have a high deposit against the value of the mortgage you want, the mortgage lender will be slightly more flexible on the value because if it loses value once you come to resell it, you take the hit out of your deposit, not them.

Ergo the estate agent is doing his homework to find out whether your proposed purchase is likely to fall over at the mortgage survey point.

reallyjammyjam

moromir wrote: »

It's more likely that they know the price they want is high for the area.

On a mortgage where you have a low deposit/high mortgage percentage, the bank is less likely to give you any wiggle room on their valuation (ie whether they'll lend against it) because it means that if it loses much value, its the mortgage company that has a higher risk of not getting their money back when you come to sell it (they'll get it eventually don't worry about that).

If you have a high deposit against the value of the mortgage you want, the mortgage lender will be slightly more flexible on the value because if it loses value once you come to resell it, you take the hit out of your deposit, not them.

Ergo the estate agent is doing his homework to find out whether your proposed purchase is likely to fall over at the mortgage survey point.

ahhhhhhhhhhhhhh OK that makes sense. So my next question then I guess is should we 'bend' the truth a little? Make out that we have a little more deposit then we actually do? Would they actually ever find out?

Yorkie1

I wouldn't. Risk of backfire, and it undermines the position that you don't want to discuss it at all.

pinkshoes

reallyjammyjam wrote: »

ahhhhhhhhhhhhhh OK that makes sense. So my next question then I guess is should we 'bend' the truth a little? Make out that we have a little more deposit then we actually do? Would they actually ever find out?

I would! Just tell them 25% then you can always say you spent some of it on a new car/ diamond ring so now have less...