Estate agent asking for mortgage in principal

samrock

My partner and I have found a house which we have made an offer for (below the asking price) and the estate agent has come back to us asking for evidence of a mortgage agreement in principle, or our independent financial adviser’s details, so that they can assure the vendor that we have confirmed affordability.

Do I have to provide this information to the estate agent? On one side, I understand that the vendor needs to receive confirmation of our affordability before they take the house off the market. But if the estate agent becomes aware of our personal finances, how can I be guaranteed that they won't leak specific information to the vendor so that they ask for a higher offer from us? Unfortunately it has happened to us on a previous occasion so we are now very reluctant. In our past experience, the agent already knew the maximum amount that we could offer (if stretched) and pressed us to raise the offer.

Any advice? My thoughts are to turn down this request and say that we are happy for the house to be taken off the market only when we will provide them confirmation from the bank of the loan acceptance.

Thank you,
Regards,

Sam :think:

anto164

Its at your detriment not to do that - they need to prove that you can affird the property and an agreement in principle is something that you can do easily, and even online in some instances.

If they believe that you cant afford a property then thy will be wasting their time if it is true and they certinately will not remove from the market.

Just get one online with Halifax and show them that. Takes 30 mins online and its done so you can move the purhase along.

AdrianC

There's a big difference between being ABLE to offer more, and being WILLING to offer more. If they press you to offer more than you want to pay, simply refuse.

samrock

My question remains: what guarantees ME that the EA won't share specific numbers with the vendor, thus pressing us to make a higher offer?

AdrianC

samrock wrote: »

My question remains: what guarantees ME that the EA won't share specific numbers with the vendor, thus pressing us to make a higher offer?

Nothing.

But what does it gain anybody?

They can press all they want. Why on earth would you offer more than you WANT to pay, even if you were ABLE to pay more?

C_Mababejive

Crooks,,just ask your solicitor to write and confirm that mortgage offers are in hand.

Fuzion

Won't the mortgage agreement in principle be based on the offer you are prepared to make? You could ask them not to show an upper range.

haf1

The estate agent is trying to weed out time wasters. I wouldn't necessarily let them know how much you *could* borrow, either.

our independent financial adviser’s details

Well, that would be a suggestion?

If the agent is asking you to raise your offer, the reason behind that may well be the seller hoping to sell for more. You can still raise your offer to what you think the house is worth, and leave it at that.

we are happy for the house to be taken off the market only when we will provide them confirmation from the bank of the loan acceptance

The seller will not agree to take the house off the market without knowing if you are a serious buyer.

AdrianC

Fuzion wrote: »

Won't the mortgage agreement in principle be based on the offer you are prepared to make?

No, an AiP is not based on a property at all - just the maximum amount they are theoretically willing to lend you.

samrock

Right.. So the AiP gives the EA and Vendor "reassurance" that we are serious buyers meanwhile prying into our financials and feeling more justified to squeeze more money from us. Of course it's our decision if we want to offer more, no argument there, but you have to agree that if we are proven to be ABLE to offer more, the sellers are likely to play their best cards to push for more, this being detrimental to us in the end IF we are keen to get the house.

Thanks for your answers, I think I have the full picture and I am not keen to let in the EA into our financials because it's a double edged sword. We are quite confident that we are in fact serious buyers and we will prove this with an accepted mortgage loan - and that should be the only proof necessary of our "affordability" and sufficient reason to take the house off the market from that point on.

AdrianC

samrock wrote: »

...meanwhile prying into our financials...

They aren't "prying". They need to know that you really CAN afford your offer, and aren't a time-waster.

and feeling more justified to squeeze more money from us.

Only if you agree to pay more.

Of course it's our decision if we want to offer more, no argument there, but you have to agree that if we are proven to be ABLE to offer more, the sellers are likely to play their best cards to push for more, this being detrimental to us in the end IF we are keen to get the house.

Assuming you're not up against other potential buyers (if you are, then the question is more one of who's willing to pay more), then it's simply who has the stronger resolve. Will they watch you walk away simply because they think you CAN pay more?