Estate agent wants to perform credit check before they will put forward offer

missV

Hi

We're first time buyers and after a bit of advice. We have decided to put an offer in on a house that has been repossessed. The house is being advertised by the estate agents on behalf of another company. We have been told that we will have 28 days to complete and that the house will remain on the market with our offer price advertised until we have completed. We think it is worth these risks.

We called the estate agents today to put in our offer. The estate agent told us that our offer was too low and the company have already rejected offers higher than ours. The estate agent then told us that the company selling the property requires them to do a credit check before any offers are put forward, regardless of whether we have an agreement in principle in place, and booked us in for an appointment with their mortgage adviser.

I've read somewhere before that we should be careful not to let the estate agents know exactly how much money we have, as they may use the knowledge against us to bump up the price.

Does this sound legitamate, or do you think the estate agents are trying to take advantage of us being naive first time buyers?

Thanks

Ulfar

Ask them to put that in writing, especially the bit about having to see their mortgage advisor.

Then find out if they are part of one of the estate agent organizations and complain. You won't get the house but it will make you feel better.

Perelandra

missV wrote: »

Hi

We're first time buyers and after a bit of advice. We have decided to put an offer in on a house that has been repossessed. The house is being advertised by the estate agents on behalf of another company. We have been told that we will have 28 days to complete and that the house will remain on the market with our offer price advertised until we have completed. We think it is worth these risks.

For a Repo, this is normal.

missV wrote: »

The estate agent then told us that the company selling the property requires them to do a credit check before any offers are put forward,

This is possible. I could quite believe that the company has made this a requirement to the EA.

missV wrote: »

regardless of whether we have an agreement in principle in place, and booked us in for an appointment with their mortgage adviser.

They are only allowed to insist on this, if the seller has specifically told them to insist on it. (i.e. "please only forward offers to us if the buyer is using your mortgage adviser" seems a little strange).


Which I find hard to believe.

davidmcn

Perelandra wrote: »

They are only allowed to insist on this, if the seller has specifically told them to insist on it. (i.e. "please only forward offers to us if the buyer is using your mortgage adviser" seems a little strange).

Which I find hard to believe.

And given it is a repo property, possibly in breach of the sellers' legal obligation to get the best possible price.

missV

I think I didn't explain properly in my first post. I think the appointment with the mortgage advisor is so that they can perform the credit check. I feel a bit happier now that some of you have commented that the credit check sounds reasonable. Thanks for your responses.

I'm still a bit worried that if the estate agent knows our financial situation, they will try to drive up the price

HelenRachel

They may know what your theoretical upper limit may be but you know what your happy to pay. They can't make you offer more than you want to.

chanz4

credit check sounds bull to me, more like the mortgage broker in branch wanting a sale. Ask for it in writting,

princeofpounds

The credit check is almost certainly bull.

Whilst it is possible this has been required, it have never been remotely near established practice for lenders seeking to monetise repos.

A credit check will tell you almost nothing about the ability of someone to make a one-off transaction. It is a historical record of ongoing debt liabilities. Thankfully it won't tell them anything about your budget either.

Proof of funds is a different matter, lenders do particularly care about proceedability.

I really think the most likely explanation is that it is just an excuse to get you in front of their mortgage salesman.

Estate agents so often seem to take the mick on repo sales, i never know why the bank's repo units let them get away with it, but I have my theories on how that side of the business works.

eriphyle

I haven't heard of a vendor requiring a credit check and its unlikely to be a condition from the vendor because it serves no purpose: what is likely is that the vendor has asked the agent to vet applicants for ability to proceed and the staff in the office just call it a "credit check".

This is fine in theory as long as it consists of you showing your AIP once your offer has been accepted. If they don't go for that, get your IFA to call them to confirm your financial arrangements with an offer to send AIP if the offer is accepted. If they won't accept that, they're looking for more than confirmation about your financial position and you should be wary.

If you're not already aware: giving an agency mortgage person any financial details about yourself weakens your position in several ways and should be avoided.

bmunky7

Presumably you're only considering agreeing to this with the intention of substantially increasing your "rejected" offer? Otherwise what's the point?

Bantex_2

What you can afford is of no consequence. What you are prepared to pay is the crucial figure.

I could afford to spend £100 on a box of matches, but the match seller knowing that would not help him one bit.