Making Offer with AIP - Estate Agents Insisting They Need to Do Own Affordability Checks

Snow_Phoenix

Good Evening, 

We arranged a AIP with an independent mortgage advisor who is attached to our building society and searches over 90 different lenders so are aware we are being offered the most competitive products on the market. 

We have seen a property we like and have contacted the estate agents to make an offer but have been advised by them we need to sending over a copy of our AIP for their mortgage advisor to "scrutinise" (their words not ours) and proof of deposit before an offer will be put forward to the seller. They have advised they need to do this as part of their own "due diligence" and are also wanting to check proof of who we are etc. Surely none of this needs to happen before the offer is put to the seller and should be happening afterwards once they have decided if they will accept our offer or not. 

We are planning to put in an offer for just below 95% of the property value as our stating offer as it has been on the market for almost 2 months now and there is certain work which needs to take place to bring it up to standard. 

We feel them wanting to do all this digging is to 1. be able to push up our offer price when they can see we can afford more. 2. allow them to carry out their own credit searches to provide their own mortgage advice which we have advised already we do not want as are happy with the service we are already getting. 

We are also concerned about sending over proof of deposit at this early stage due to it being a reason amount of money we have saves and have heard lots of horror stories of people getting their deposit stolen due to spoofing so would prefer to only be sharing details like this which would include our account numbers and the account balance with those necessary e.g. our mortgage advisor and solicitor. 

Surely something from our mortgage advisor to theirs confirming all affordability checks had been carried out and they have seen proof of deposit would suffice, especially at this early stage. 

Anyones experience or advice would be welcome on this situation as it as been few years since either of us has brought/owned a property having both sold our main years ago and being chain free. Neither of us currently owns a property either should this be a question. 

Many thanks

[Deleted User]

a few aspects to this:

1. They probably want you to use their own mortgage services so the company gets paid more income for the overall transaction. Whether you do or not is up to you and your broker should be offering to step in and help with this if it is awkward.

2. The EA has a legal responsibility to ensure that anyone they enter into a transaction with has their source of funds verified by retaining a copy of a bank statement showing the availability of this and where it has come from.  As EA is a unregulated industry you will find massive variances in how far they go with this and some will take a screenshot from online banking and some will ask for paper bank statements and gifted deposit letters if applicable.  This is how they interpret their legal responsibility so no way to really argue.   You could send it over with the account details blacked out and see if they say anything

3.  They need to verify that you are financially proceedable so they can recommend the offer to the owner and advise them to take the property off the market.   They usually wont just take any brokers word for it unless they are well known to them.   If the mortgage doesnt get approved then the EA will want to be able to blame someone else so they need to make sure they follow their rules.   When i worked in EA as a broker the agents had a complaint from their vendor that the buyer couldnt get a mortgage after months of timewasting.  Turns out the estate agents hadnt done any checks beyond taking an AIP off the buyer via a random broker and ended up having to cover the sellers legal costs up to that point as the contract stated they would do their best to confirm the buyers financial standing and they hadnt done it.  


I dislike EA as much as everyone else but in this case I suggest telling them you are happy to provide the information requested and speak to whoever is required once the offer is accepted and you are happy for them to market the property until that point. 
Call their bluff, they wont want to lose the sale

[Deleted User]

also make it very clear to the mortgage services that you do not consent to your details being stored on their mortgage systems or a credit check done and you do not consent to a fact find being done. You are only speaking to them for financial verification for an offer.   This should give them a nice gdpr scare

MaryNB

I had to go through a financial check with my sellers' EA.

They first tried to get me in with their mortgage advisor (acting as if it was the natural next step rather than an option) and when I told them to cancel the appointment they set up they cancelled and rescheduled. 
Eventually they agreed not to go ahead with it but then told me I needed to sit down with them to check my finances - it was a sales pitch for their mortgage services.

I baulked at the £600 fee and told them I'd be going directly, as I told them many many times before. No further issues. 

I wouldn't worry about them seeing your finances. You're paying what you think the property is worth, not just handing them everything in your bank account. Be firm with your offer. If they could get more money for it they would have gone with a different buyer.

If I was selling I would expect an EA to do a financial check rather than risk a buyer wasting my time because they don't have their finances sorted. 

Snow_Phoenix

Thank you for the information Deleted_User.

It is useful to know what is reasonable and not, as well as how to word our response to them. We have fired a few questions their way about the whole process tonight as my partner had asked for them to provide their policy document supporting the request. 

We will see if they accept what we can offer and with details redacted on the accounts and if this will be sufficient. We just were not expecting these questions until they have put the offer to the seller to see if they would accept it or not. 

Good advice about the making it clear about not giving consent. 

Thrugelmir

Snow_Phoenix said:

We just were not expecting these questions until they have put the offer to the seller to see if they would accept it or not. 

If there's a number of interested parties. Then the vendor isn't going to spend time asking questions before arriving at a decision.  

Snow_Phoenix

Thanks MaryNB, I think just keep giving a firm no with their own products is the way to go then. 

Thanks for your reply Thurgelmir. The property has been on the market for 2 months now, if there was a number of interested parties it would not still be on there. Seeing how other houses we have enquired about the day after they have come to market have been sold within less than a week and we cannot even get a viewing for the next day I think it is unlikely there is a number of parties presently. Even if there were other parties we are currently not attached to it enough to get disappointed, we have learned that along the way with other places we have got our hopes up about and lost out on. Something else will always come up. 

We are just surprised the estate agent is not putting the offer to them to see if they would entertained by the vender first and then going through the checks for formalise it, otherwise they would be asking for evidence of bank balances and mortgage information, which is a lot of admin for them to go through all for the offer to be rejected and it not go any further. I saw it more for the benefit for their in-house services rather than for the sellers benefit. 

Linton

A vendor won’t want to take their property off the market until they know that the offer is genuine and that the potential buyer can afford it.  It is part of the EA’s job to give the vendor that assurance.

The EA wanting the mortgage business is not a real issue. You will probably be given a low key sales pitch but you simply say that you are happy with the arrangements you have already made.

amnblog

This is an issue for your Broker to clear up direct with the Estate Agents.

ABFG

My experience was very different with 2 estate agents who I had offers accepted by on the same day (which in itself is another story).

One EA, who I ended up buying from, were very polite and when I sent over my AIP immediately after making the offer and basically said that they had to have me talk to their mortgage guy to check I was proceedable. They also said he would offer his services but I wasn't expected to use them. When I spoke to their mortgage guy, he basically said the same thing, really sounded apologetic for taking the time but they were doing their due diligence etc. Was very easy and they were polite and unassuming the whole way through. It was a box they had to tick and from experience they knew that with an AIP I had a strong offer. At no point did I have to share any bank details, only address, salary and details on that level. This all happened within a couple of days after offer had been accepted, so no hint of pushing up the price.

The second EA was very different. They insisted on a very rushed, very fast bidding process that involved filling in a lengthy form, much of which I refused to do before having an offer accepted. They insisted I speak to their mortgage guy before the offer was accepted, which they said they did for all bids. Their mortgage guy frankly sounded a bit bemused by the whole thing; I was ready to fight off a hard sell for services I didn't need when he called, but he was fine and asked the same questions as the other one. As Deleted_User said, I told him at the start of the call not to share any information and to delete as soon as it was done with. Of many offers I made during my search, this was the only one who did the check before passing the bid for consideration to the vendor.

Either way, if you're not happy, redact the documents you send so that they have the bare minimum of information required. They don't need your account number/sort code etc. If they have a problem they will let you know, especially if it's been hanging around on the market as long as you say.

Snow_Phoenix

Thank you all for getting back to me. Everyones comments and thoughts are appreciated. 

From the information they have sent over this morning it appears they had passed on our offer to the vendor and just needed the documents ready if they came back with an acceptance, which appears very different from the one message my partner got with contacting them yesterday. 

We have since heard back this afternoon that our offer has been declined as they want closer to the asking price. We were split over the weekend about putting in an offer as there were lots of pros with the property but after more thought about what needs doing and more information coming forward about some work the vendor had partially started that we had not pick up on within our viewing and them not showing plans of finishing before completion we have decided we would not feel comfortable offering more than what we already have done. 

I guess we will see if they come back to us with a little more time to say they have changed their mind at all or the general price is reduced and if we would feel comfortable with any price revision to make a second offer.

Thank you all once again.