Estate agent difficulty

Thrugelmir

pinkshoes wrote: »

The EA could then see how much they can afford, and tell the vendor they could squeeze more money out of them.

Often hard enough to get the vendor and potential purchaser to be drawn to strike a deal in the first place! Without losing a sale entirely.

BobQ

hazyjo wrote: »

Since when?

In is covered by the money laundering regulations which require customer due diligence to be conducted of both buyer and seller. For the buyer this includes montoring the source of funds for a transaction you are an intermediary in.

https://www.gov.uk/government/publications/money-laundering-regulations-2007-supervision-of-estate-agency-businesses]

It may seem over the top but the EA is legally responsible for having adequate procedures in place to identify money laundering and failing to have them can result in prosecution.

BobQ

Smodlet wrote: »

You would need to time it right but I would be very tempted to report them to whatever professional (hah!) body they are a member of, if any.

My guess is what they actually said was something along the lines.

EA: I'll have to speak to the vendor about your offer. Lets take some details........can see your passport of driving licence....... and a utility bill.......

EA: How much deposit do you have? Do you have a mortgage offer? Are you getting a good interest? ......... I'm not an expert but I think you can get a better offer than that? Maybe you should have a word with our financial advisor, they are independent of the estate agency ( glossing over that this does not mean IFAs)

EA There is a small fee of £99 but people tell me that that is well worth paying if you get a better rate than the one you got off the internet. Our chap might be able to save you much more over the length of the mortgage, and he can give you good advice because he has access to deals not available to the public .........

EA So you want to see our mortgage chap? That is a wise decision.


In short EAs generally do not say you must see our adviser (which would be illegal) they just babble on until you either say "Thank you but no" or you agree ( and they think about the commission they have earned).

hazyjo

BobQ wrote: »

In is covered by the money laundering regulations which require customer due diligence to be conducted of both buyer and seller. For the buyer this includes montoring the source of funds for a transaction you are an intermediary in.

https://www.gov.uk/government/publications/money-laundering-regulations-2007-supervision-of-estate-agency-businesses]

It may seem over the top but the EA is legally responsible for having adequate procedures in place to identify money laundering and failing to have them can result in prosecution.

Yup, know about general money laundering regs (work in corporate law), but still don't see anything in that doc about EAs having a legal obligation to establish a buyer has the funds. Maybe a PEP, but not Joe Bloggs. 'Simplified due diligence', yes. 'Enhanced due diligence' is only really implemented in high risk situations.

When I bought, I just said the proceeds were coming from the sale of my current house and a small mortgage. They did not ask to see written evidence in the form of bank or mortgage statements. They did take my lender's details so perhaps they did ring to confirm, who knows...

More than happy to be corrected!

BobQ

hazyjo wrote: »

Yup, know about general money laundering regs (work in corporate law), but still don't see anything in that doc about EAs having a legal obligation to establish a buyer has the funds. Maybe a PEP, but not Joe Bloggs. 'Simplified due diligence', yes. 'Enhanced due diligence' is only really implemented in high risk situations.

When I bought, I just said the proceeds were coming from the sale of my current house and a small mortgage. They did not ask to see written evidence in the form of bank or mortgage statements. They did take my lender's details so perhaps they did ring to confirm, who knows...

More than happy to be corrected!

I am not sure if you actually read the document or simply dismissed it on the basis that "you work in corporate law" and understood how the law applies to estate agents (it is boring stuff ). It does make reference to the source of funding but it is not explicitly required to ask.

I agree that all organisations are free to exercise due diligence in a risk managed way and what matters is that they have a policy and a compliance process which all staff follow. The EA you used may indeed have decided you were low risk. The point is that it is up to the EA how the law is applied in their business, although the consequences of getting it wrong may cause some to take a more cautious approach than others.

A more cynical view of the world is that the ML Regulations allow any EA to go on a fishing trip and most people will not be aware of the latitude they have. I suggest that if the EA sees benefit in asking for the source of funds (as a way of introducing his mortgage adviser for example) he can do so on the pretext of satisfying himself the risk is acceptable. But that may just be me being cynical.:)

sillyhilly

BobQ wrote: »

I am not sure if you actually read the document or simply dismissed it on the basis that "you work in corporate law" and understood how the law applies to estate agents (it is boring stuff ). It does make reference to the source of funding but it is not explicitly required to ask.

I agree that all organisations are free to exercise due diligence in a risk managed way and what matters is that they have a policy and a compliance process which all staff follow. The EA you used may indeed have decided you were low risk. The point is that it is up to the EA how the law is applied in their business, although the consequences of getting it wrong may cause some to take a more cautious approach than others.

A more cynical view of the world is that the ML Regulations allow any EA to go on a fishing trip and most people will not be aware of the latitude they have. I suggest that if the EA sees benefit in asking for the source of funds (as a way of introducing his mortgage adviser for example) he can do so on the pretext of satisfying himself the risk is acceptable. But that may just be me being cynical.:)

I'm an AML Consultant and can confirm that it is boring!

The obligation to conduct due-diligence is once the offer is accepted. There is no requirement to conduct it pre-acceptance of offer.

Due-diligence involves verifying the identity of the customer (i.e. proof of ID and proof of address). There is no requirement to verify source of funds in low-risk situations. Although as you have said, each EA will have their own risk profiling (lol, no they won't they're woefully inadequate at AML) for customers and therefore they can determine when source of funds would be necessary.

OP, I personally went through a similar situation to you very recently. I provided source of funds to the EA to confirm that we were proceedable - our vendors sale fell through before us as the prospective buyer didn't actually have the money and couldn't get a mortgage - as I could understand the request on that basis. We just paid lip service to their in-house mortgage advisor (read: Countrywide) and subsequently advised we would be sorting out our mortgage/conveyancing ourselves. We loved the home and attempted to keep the ship steady so that we could bag it... Even though there is obviously no need to provide that information beforehand!