Selling property - Estate agent hasn't confirmed proof of funds in place

Daldodo

Hi all,
I am selling my property and a bit concerned about my estate agent. I asked them if they could either send me the buyers mortgage in principle, or if that isn't possible, to confirm that they are in receipt of if. I will provide some background....

At the viewing stage initially the buyer came across as being a cash buyer. Turns out the the buyer meant they have a very big deposit but still need a mortgage to cover the rest of the purchase price. not a problem.

Buyer makes an offer which I accepted, setting the wheels in motion. I asked by Estate agent if the buyer had proof of funds. On a mobile message I received the response that they have a mortgage in principle.

After appointing a conveyancer and getting the wheels moving on the sale, I went back to my EA to ask specifically if they could send me the mortgage in principle or, if that isn't permitted, for them confirm they are in receipt of it. the response I got was basically: We don't share that. Trust us.

Which doesn't answer my question as to whether they are in receipt of it. I don't think I am asking for anything unreasonable. Do you guys have any advice? am I being too cautious by asking for that? I am worried because if the buyer doesn't have a mortgage in place then I could be vulnerable. They could use their own cash to cover the deposit. then after that...who knows what could happen after exchange if they don't actually have the MIP in place.

Thrugelmir

A solicitor shouldn't allow their client to exchange unless the funds are in place to complete the transaction. There's no benefit in you having sight of the other parties personal financial circumstances. 

NorthYorkie

The simple answer is that you do not exchange contracts until you are satisfied that the buyer is able to fund the purchase price. This will avoid the aggravation and expense of having to force the buyer to complete the purchase should it turn out after exchange of contracts that the mortgage is not available. (Assume you are in England and Wales its different in Scotland! )

diystarter7

Strange one. When we sold out house years ago we insisted that we would only sell to a chainless buyer and one that had cash or mortgage in place and this was set out in our contract with the EA.

Tell the EA you don't want to waste your time and need to be sure there is evidence in place that the buyer has the funds ready and if not go to another EA and get the above in your contract.

diystarter7

Btw, every agent we have used as have our children have asked for "proof of funds" before putting on the property we were buying on "sold STC"

Spiderroo

You shouldn’t get to the point of exchange without the buyer having a formal mortgage offer. The agreement in principle is mainly for the buyer to prove they can make the offer, after it’s accepted one of the first things the buyer has to do is get an actual mortgage offer and share it with their solicitor. 

I’ve not come across any estate agents that accept offers without an AIP now and some don’t even allow viewings! So when they say trust them you should, as long as they’re a reputable agent. If they’re a member of The Property Ombudsman their code of practice says they have to take reasonable steps to check a prospective buyer’s financial situation while an offer is being considered. 

Marky4040

Thrugelmir said:

A solicitor shouldn't allow their client to exchange unless the funds are in place to complete the transaction. There's no benefit in you having sight of the other parties personal financial circumstances. 

This ......and no you are not entitled to view prospective buyers personal financial infomation nor is it reasonable to expect to do so, thats what the EA is for.

Have a cup of tea and chill out, let the EA and solicitor do their job.

hazyjo

The MIP doesn't mean a lot anyway tbh. The application is what matters. Have they met with their lender or broker yet? Valuation/survey booked in/done?

eddddy

Daldodo said:

who knows what could happen after exchange if they don't actually have the MIP in place.

The MIP is no longer relevant when exchanging contracts. The buyer needs a definite mortgage offer before exchanging contracts.

The MIP is just an indication to the estate agent that the buyer isn't a timewaster.

(The MIP is meant to stop timewasters and dreamers from making offers on properties when they have no hope of getting a mortgage.)

Rambosmum

We've never shown an estate agent proof of funds, not allowed for them to complete any 'eligibility' checks etc and I certainly wouldn't let prospective sellers have them.

That's for the solicitors to deal with. It's never stopped us viewing offering or buying houses either, once the EAs have realised we're serious.

As a seller, I've also never asked to see it or asked the EA to check, and we've also refused to sell houses with EAs that list eligibility checks as a benefit!

So I wouldn't worry. One bad experience is just that.  

Daldodo

Thrugelmir said:

A solicitor shouldn't allow their client to exchange unless the funds are in place to complete the transaction. There's no benefit in you having sight of the other parties personal financial circumstances. 

Yup. That's not what I'm driving at though. The EA has been flaky with regards to the sellers AIP, hence the question to the EA about the sellers finances. The purpose of asking the EA for sight of the sellers finances was to try to get them to just confirm they themselves were in receipt of them. That would have been a sufficient answer from the EA. But their flakiness flagged up concerns, cheers. Re sols....my sol has been brilliannt and advised me not to proceed.