Decision in principle - send these to estate agent??

felinefancy

Morning all,
We have seen a property we want to put an offer on.  We've got 85% deposit of the asking price and two mortgage Decisions in Principle from two lenders - one offering from 25k up to 57k, the other from 52k up to 70k.  

The vendor told us that she has received an offer though she's not accepted it as the potential buyer has still not proven he's got the necesary funds yet despite her asking him several times.  He's offered 5k more than the asking price - we would only be able to offer up to 3k more (despite what the DIPs say).   I don't want to tell the estate agent exactly our financial situation.. we can offer the asking price no problem and up to 3k more but if I send them copies of the DIPs I don't want the estate agents thinking that we can afford more, as this is what the DIPs are illustrating - we'll only be one salary and we know what we would be able to afford to repay each month and it's definitely at the bottom end of the first DIP!  (We'll also want to pay off this small mortgage within 5-10 years.)

Therefore for us to illustrate our interest to vendor/agent that we do have funds, how can we prove this?   We need to get back to them by tomorrow.
Also, can we say that "we will offer x amount conditional upon valuation/house survey" ?  It's been many many years since I've owned a house and I've forgotten the various procedures.

Many thanks for any advice.

Irishpearce26

Send them your DIP, its common practice. The EA cant disclose this as you haven't given permission.

MaryNB

Be very firm on what you are willing to offer. It's not about what you can afford, it's what you think the house is worth. 

I had to send over a DIP and proof of deposit when I bought my house last year. It showed I could afford more however I told the EA I wasn't paying about asking and also I had set some of that money aside for furniture and in case the house need some work done.

I don't think you'll get very far if you refuse to send over a DIP. The seller might be worried they have another buyer that might be wasting their time. If it's a DIP direct from a lender you could do a new one for what you can afford. Check with the lender but most done directly are only soft searches. 

eddddy

The EA has a duty to make sure that you are proceedable buyers - which is why they want to see your DIP.

In these situations, EAs tend to act in their own interests.

• The EA would much prefer that the seller immediately accepted your offer of £3k over asking price.

• Persuading you to offer £5k over asking price would probably earn the EA an extra £20 or £30 in commission - it's not worth their time and effort. (Instead of putting time and effort into arguing over £2k, they would rather put time and effort into selling another house on their books.)

So in simple terms, the EA is likely to do two things in parallel:

• Try to persuade the seller to accept your offer
• Try to persuade you to increase your offer

The EA will hope that one or the other of you will give in - or that you will both compromise and meet in the middle.

AdrianC

So long as you aren't lying and saying "We cannot afford more" (you clearly can), but are being honest and saying "This is the maximum we are willing to offer", then showing them the DiP makes zero difference.

Of course the EA have to satisfy themselves that you aren't time-wasters, and genuinely can afford to pay your offer. It's part of their job. That's why the other offer is falling through, and why you're getting this opportunity in the first place...

BUT... will you really walk away from this property for £2k?

StandingInTheSun

Do NOT send them your full DIP. 

Estate agents and builders have gotten ideas far above their station and are asking to see the full things, which often contain a whole range of information which should not be shared due to GDPR and your own confidentiality. Send them a screenshot of the salient points - DIP approved and what the limit is - absolutely nothing else should be shown to them.

C_N_

Is your DIP directly from a lender or from a broker like L&C? I know some agents can be a bit funny if it's the latter. 

lonibra

OP - Personally, I don't like the Estate Agent knowing my max borrowing. I usually ask my MB to email the Estate Agent confirming that I can afford to make the offer and most are ok with that.

Some will still insist on seeing the AIP certificate in which case my MB gets one for the amount corresponding to the specific offer amount.

Sacher50

A DiP is also only the maximum a borrower might be willing to lend you. There are lots of legitimate reasons why you wouldn’t/shouldn’t want to borrow up to that limit.  I wouldn’t worry about it. 

felinefancy

AdrianC said:

So long as you aren't lying and saying "We cannot afford more" (you clearly can), but are being honest and saying "This is the maximum we are willing to offer", then showing them the DiP makes zero difference.

Of course the EA have to satisfy themselves that you aren't time-wasters, and genuinely can afford to pay your offer. It's part of their job. That's why the other offer is falling through, and why you're getting this opportunity in the first place...

BUT... will you really walk away from this property for £2k?

On just one salary, we know what we can or can't afford and we cannot afford a mortgage bigger than 25k, despite what the lender's software says 'up to x amount'.  I've gone through their mortgage eligibility questions and the only financial commitments it asks you to provide is about credit cards, loans, pensions, child maintenance, or dependents etc.  it doesn't ask for details about utility bills, food, clothing, travel, car etc. so based on our own calculations of our monthly spend, we know that we can only pay a mortgage at the bottom end of the DIP.  Yes, we could afford more if it were over a longer term but we are looking to pay it off within 5 - 10 years.

felinefancy

MaryNB said:

Be very firm on what you are willing to offer. It's not about what you can afford, it's what you think the house is worth. 

I had to send over a DIP and proof of deposit when I bought my house last year. It showed I could afford more however I told the EA I wasn't paying about asking and also I had set some of that money aside for furniture and in case the house need some work done.

I don't think you'll get very far if you refuse to send over a DIP. The seller might be worried they have another buyer that might be wasting their time. If it's a DIP direct from a lender you could do a new one for what you can afford. Check with the lender but most done directly are only soft searches. 

It's not a case of refusing to send the DIP, on the contrary, but I don't want them seeing the maximum we could borrow and telling vendor that she could push for more.