Estate agent asked about deposit

Redwino222

I made an offer in a house this week. The estate agent asked me how much of a deposit I have.

I was a bit taken aback.  I can understand them asking about proof of funds - and I was primer to put them in touch with my mortgage broker.  But why do they care what size my deposit is??  I am also selling my house - I don’t care what size of deposit people have, I only care that they can get a mortgage.

am I missing something?

K_S

Redwino222 said:

I made an offer in a house this week. The estate agent asked me how much of a deposit I have.

I was a bit taken aback.  I can understand them asking about proof of funds - and I was primer to put them in touch with my mortgage broker.  But why do they care what size my deposit is??  I am also selling my house - I don’t care what size of deposit people have, I only care that they can get a mortgage.

am I missing something?

@redwino222 I see your point but unfortunately in some "hot" markets EAs are strictly qualifying offers. So if you were a 90% LTV borrower and put up against a 75% LTV borrower, their offer may be more proceedable in their eyes.

I'm even having clients (in some currently red-hot markets in outer London) tell me that some EAs aren't letting them even view properties without an AIP and proof of deposit.

It's unfortunate, but in a local market where demand comfortably exceeds supply, they can set the rules.

NameUnavailable

Standard practice these days.

Redwino222

Ah okay.  It’s just you could totally lie.  I would have actually felt more comfortable getting my mortgage broker to tell them I can afford it and will be fine to get the mortgage.

my deposit is about 50% so no issues there.   These same estate agents are also selling my house, so they do know some details about me. I can understand them preferring a cash buyer, but wasn’t sure why they wanted to know how big my deposit was!

I haven’t moved house in over twenty years so this is all a little baffling🙂. Thank you 

eddddy

Redwino222 said:

my deposit is about 50% so no issues there.   These same estate agents are also selling my house, so they do know some details about me. I can understand them preferring a cash buyer, but wasn’t sure why they wanted to know how big my deposit was!

So you're in a strong position - it will probably help you if you tell the EA.

Your mortgage lender (and their valuer) is less likely to raise issues and/or down value the property, if they're only lending 50%. If they were lending 85% or 90% they might be more fussy and cautious about the valuation - which increases the risk of delays and/or the buyer pulling out.

Seashell517

Redwino222 said:

Ah okay.  It’s just you could totally lie.  I would have actually felt more comfortable getting my mortgage broker to tell them I can afford it and will be fine to get the mortgage.

my deposit is about 50% so no issues there.   These same estate agents are also selling my house, so they do know some details about me. I can understand them preferring a cash buyer, but wasn’t sure why they wanted to know how big my deposit was!

I haven’t moved house in over twenty years so this is all a little baffling🙂. Thank you 

If you've got a bigger deposit then it's easier to get a mortgage? 

Redwino222

well yes - but surely only at the upper levels?  Not much difference between 40% and 70% surely.  And they have no idea about earnings or credit score.  And they haven’t asked for any proof.  So no idea if they are being told the truth.

eddddy

Redwino222 said:

well yes - but surely only at the upper levels?  Not much difference between 40% and 70% surely.  And they have no idea about earnings or credit score.  And they haven’t asked for any proof.  So no idea if they are being told the truth.

Hmmm... it sounds like you're saying that the EA shouldn't bother asking prospective buyers any questions at all, because the prospective buyers might lie.

And you're saying it's a waste of time asking about deposit %, unless you ask every other possible question about a prospective buyers mortgage prospects as well.
 

Realistically, EAs ask a few key questions to qualify a buyer, and the EA has to make a judgement about whether they're being lied to - and advise their client accordingly.

I think that's probably a better approach than not asking any questions at all.

Jeepers_Creepers

Totally understand why they need to ask about funds, and even deposit size.

Annoying, tho' - mil has looked at a few houses recently, and you can't help but feel you are handing over a useful bit of bargaining info to the EA when your bank statement shows a balance significantly higher than the 'speculative' offer you've just made...

davidmcn

Jeepers_Creepers said:

Annoying, tho' - mil has looked at a few houses recently, and you can't help but feel you are handing over a useful bit of bargaining info to the EA when your bank statement shows a balance significantly higher than the 'speculative' offer you've just made...

It's not that useful, though - even if you're paying as much as you can "afford" (and I don't think that many people do), how many buyers actually clear out their bank account in order to do so? 

Redwino222

I could go about £150k over asking price if I wanted to.  My mortgage broker will not tell them what I could afford, because that is irrelevant.  He would tell the estate agent that I can get funds to honour my offer.

Just thought it was an interesting approach.  When I have to decide between offers I will just for the highest bid unless someone says they don’t have a deposit at all!!!