EA asking buyer to pay for ID/AML checks

RedRaccoon

I'm a first time buyer and had an offer accepted on a house. Then I was told by the EA that I'll be contacted by a third party (Lifetime Legal) to carry out AML Checks, for which I'll need to pay £75!

I knew about the checks and assumed the EA would take care of it as its their responsibility. I was not aware of this additional charge which came as a surprise, the listing on Rightmore made no mention of this. When I asked the agent about this, he said I would have known if I'd registered onto their portal (most people just go though Rightmove and don't bother registering to every EA they call). He continued to say its part of their process and the only way to proceed with the sale. 

I called up a few other EAs in the area and asked if they also charge the buyer for ID/AML Checks, they said they do, but lesser amounts.

Romans - £75
PurpleBricks - £75
Sears Property - £40

I'm a little annoyed about this and think its unfair. Is this common practice now? Should I just pay it?

Olinda99

I thought these were all done by your solicitor as part of the buying process? Other than Pruple Bricks of course who introduced such a fee

https://www.estateagenttoday.co.uk/breaking-news/2023/2/reader-poll-do-you-charge-for-aml-checks

RedRaccoon

I guess its become a trend in the industry, another way for EAs to make money.

From what I've read, the actual checks cost less than a tenner, the rest is kept by the third party company, after the agent takes their cut. 

GDB2222

It's a government requirement under AML rules that EAs check you out. That's as well as your lawyer.

At £75, I'm not sure it's much of an earner for the EA, but every bit helps, I suppose.  

You don't have to agree to pay it. It costs money to check you, and somebody will end up with the cost, but the sale may still proceed if you insist that that person won't be you! 

eddddy

Who is the Estate Agent that's asking you for £75? Is it another brand in the Leaders Roman Group?


Estate Agents are required by law to do AML checks - but it's possible for Estate Agents to get them done for £5 or £10, so many Estate Agents just cover the cost themselves.


Based on the legal firm's website, it sounds to me like...

• charging the £75 (or whatever) fee is a mechanism for the legal firm to sell you more services, and the estate agent to earn more commission

• the legal company will phone you - and you will think that you have to speak to them because it's part of the AML check

• However, the call is really a sales call (there is no need to speak to you to do an AML check). They want to sell you their conveyancing service and their home buyer protection product.

The legal firm is briefed about you in advance by the Estate Agent, to make selling to you easier.

I guess that could mean things like the Estate Agent tells the legal firm that you're a Teacher, for example. So the sales person can casually say "We've done a lot of conveyancing for Teachers lately" - pretending that they didn't know that you are a Teacher.

Olinda99

Unless you are from at at risk country, or are a politically exposed person and the like, the EA can use eg  passport or driving licence to verify your identity and thus complete their due diligence requirements

They do.not need to charge £70 it is yet another way to make money

Similarily they can use your bank statements etc to prove source of funds.

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

GDB2222

There's no doubt the EA can do the job themselves, but there's a cost even then - unless you think people work for nothing! Plus, they have the costs of registering (£600 a year per branch) plus staff training and compliance costs. 

So, I'm not surprised they are out-sourcing the work. 

Grizebeck

I'd be telling them where to go with their offer or reduce your offer accordingly 

JuzaMum

GDB2222 said:

It's a government requirement under AML rules that EAs check you out. That's as well as your lawyer.

At £75, I'm not sure it's much of an earner for the EA, but every bit helps, I suppose.  

You don't have to agree to pay it. It costs money to check you, and somebody will end up with the cost, but the sale may still proceed if you insist that that person won't be you! 

Is this new? I bought just over two years ago and AML check was done by the solicitor. I didn't show the estate agent anything until my offer was accepted and paid nothing to them.

RedRaccoon

got an email from the EA with this message below:

We do require these to be completed to allow the transaction to go through.
 
Unfortunately, we will continue to market the property unless these are completed.

Grizebeck

Go and speak to the vendor and explain the situation 
Tell them to take it off the market.
The EA is quite frankly irrelevant and just deal through solicitors as per normal