Estate Agent wanting to know how much mortgage approval for!

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Bigbutcher

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Daughter and her partner are looking at purchasing their first house. They put in an offer under the asking price for a house that needs a bit of work. The estate agent came back looking for proof of funds. Daughter sent a redacted copy of approval in princible from bank, estate agent came back looking for unredacted proof. Daughter sent this, estate agent then came back saying they had an offer that happened to be just under the amount they have been approved for. Is this normal practise that the estate agent would look to know how much a couple have approval for?
 
Thanks Brendan,
I understand wanting confirmation of aporoval, but looking for the amount is surely none of his business. I know he is looking to maximise the price he sells for. Is there a way of knowing if there is a genuine offer in place. They are sticking with their initial offer.
 
Well if the asking price is €300k and you have approval for €150k, then the approval is meaningless.

No, there is no way of knowing if the offer is genuine. If it has been on the market for a long time and suddenly a bid comes in, it's suspicious ok. But if it's just fresh to the market in a high demand area, then it's quite likely to be genuine.

Brendan
 
I recently moved house and anytime I arranged a viewing to look at a potential purchase, I redacted the approval in principle amount and this was fine with various EAs. No way should you ever disclose the amount you can bid up to.
 
Brendan no it is not. The letter should state that the bidders approval is sufficient to honour the bid they have submitted. I would withdraw the bid immediately from said estate agent.

When we were viewing and bidding on houses a few years ago, we viewed two properties with two of the biggest estate agents in the country, I discovered that one acted entirely unprofessionally and disgracefully. It ended with a meeting with the vendor in their living room with the estate agent embarrassed in the corner as quiet as a field mouse. The second estate agency made up false bids and I confronted them also. Absolutely disgraceful behaviour by both parties.

So in my experience, withdraw your bid. You have told someone selling smthg you are interested in buying that you have a maximum of 300k say to purchase it. Oh look, well if you offer 300k it just so happens that you can buy it. Give me a break.
 
PebbleBeach2020 said:
Brendan no it is not. The letter should state that the bidders approval is sufficient to honour the bid they have submitted. I would withdraw the bid immediately from said estate agent.

When we were viewing and bidding on houses a few years ago, we viewed two properties with two of the biggest estate agents in the country, I discovered that one acted entirely unprofessionally and disgracefully. It ended with a meeting with the vendor in their living room with the estate agent embarrassed in the corner as quiet as a field mouse. The second estate agency made up false bids and I confronted them also. Absolutely disgraceful behaviour by both parties.

So in my experience, withdraw your bid. You have told someone selling smthg you are interested in buying that you have a maximum of 300k say to purchase it. Oh look, well if you offer 300k it just so happens that you can buy it. Give me a break.
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Where they going to get that letter from? It won't be the bank. And the solicitor wont be in a hurry.
 
What's the issue? Estate Agents want to know you have the funds covering the bid in place. They don't want people putting in bids and then hearing that they need to go and apply to the bank to increase the Mortgage Amount to cover the bid.

Just because the Estate Agent knows you have approval for 400k and you are bidding 300k on a house doesn't mean that you have to pay the 400k. Bid what you can afford and what you think the house it worth. If you are not happy, walk away. People are getting fixated on fake bids when the real explanation is that the property market is an absolute jungle these days with purchasers racing to outbid each other.
 
Sunny said:
What's the issue?
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They work for the vendor, not the bidder. They are paid a commission by the vendor to get as high a price as possible. Is it a zero sum game. They are asking the bidder to show their hand while playing the game.

They are entitled to weed out the messers by asking for a copy of the AIP but the bidder shouldn't have to disclose how much they can pay for the property.
 
I redacted our offer recently enough too.

I do recall my solicitor being open to getting added/cc'd on an email thread with the EA so he would 'vouch' that we had the relevant funds to cover said range. We didn't need it in the end, but it could be an option depending on your solicitor/relationship. Do not show your full hand to an EA though.
 
peteb said:
Where they going to get that letter from? It won't be the bank. And the solicitor wont be in a hurry.
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My solicitor die that for me in the last couple of years. At a viewing though I did hear an agent saying they were no longer accepting solicitor's letters as they had sales fall through when it turned out the prospective purchaser couldn't line up the funds required to close.
 
Steven Barrett said:
They work for the vendor, not the bidder. They are paid a commission by the vendor to get as high a price as possible. Is it a zero sum game. They are asking the bidder to show their hand while playing the game.

They are entitled to weed out the messers by asking for a copy of the AIP but the bidder shouldn't have to disclose how much they can pay for the property.
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Why shouldn't they know how much you can in theory bid for a property. Properties at the moment are going up thousands in hours never mind days or weeks. I would expect any decent estate agent to make sure that people were only making bids that they can afford. People are desperate. They will go over what they can afford hoping that they can get the extra cash somewhere which can waste everyone's time. Nobody is forcing you to make a bid at any level. If you don't think the property is worth what the estate agent is asking, then don't pay it.

When did the idea of getting AIP of €400k mean you have to spend €400k? If you are suspicious by the actions of an agent, then simply walk away from the property. The Agent either has other buyers lined up or he doesn't. If he doesn't, he will come back to you. Whether you want to deal with him at that stage is up to you...

Also, most estate agents are not crooks. They don't need to be in this market to maximise commission. Having sold properties without using agents, I really struggle to see the value they provide unless there is something unique about the property or the we are in a poor market. But at the moment, a child could sell a property in a couple of days. That doesn't mean I think they are corrupt.
 
Surprised at people suggesting letting the EA know how much you're approved for is normal. Get your solicitor to give them assurance that you have the funds and then within 24 hours of going sale agreed provide the evidence that you have the funds (e.g. unredacted approval in principal letter).
 
I never mind the EA knowing how much I can afford. I'm not going to pay more than I think it's worth and I make it clear to EAs that my bid is based around my perception of value, not maximum I can afford.
 
peteb said:
Where they going to get that letter from? It won't be the bank. And the solicitor wont be in a hurry.
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The person I was dealing with in the bank provided me a letter saying I had the funds for my bid. They were aware of my mortgage approval plus the savings I had, something I don't think a solicitor would necessarily know.
In my case it was only required after I was the winning bid though this was a few years ago. I would not be inclined to provide an EA the a figure in advance. He wouldn't have to make up bids from other parties to use it my disadvantage. For example if he tells another bidder, who is borderline about bidding again, that your max available amount is X and X+5 will get the house he is hardly being corrupt but is working against you and getting more money for his client.
 
The last time I bought (4 years ago) I gave up on trying to be cagey with bids. I asked what the current bid was and just based on that raised it to what I thought the place was worth (and obviously within my budget). In both cases I bid a fair bit more than the current bid. I had two bids accepted to sale agreed on two different properties (out of two). On both occasions I also showed proof of funds which were above the offers by a few grand. Knowing what someone has is no advantage if you're taking the route of one bid and move on and it shows you're serious.
 
elcato said:
I asked what the current bid was and just based on that raised it to what I thought the place was worth..... In both cases I bid a fair bit more than the current bid.
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Worth noting that this is unlikely to be a winning strategy in the 'game', assuming your objective is to get the property at the lowest price you can get it. For example maybe barely trumping the current bid would still have resulted in you going sale agreed.
 
peteb said:
Where they going to get that letter from? It won't be the bank. And the solicitor wont be in a hurry.
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i asked the bank for a letter. How many letters do you require depends on how many houses you put offers in on and the estate agent request proof of funds.
 
Sunny said:
What's the issue?
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In my experience, two of the largest estate agents in the country, one made up false bids trying to compel me to big higher. The other estate agent behaved deplorably and ended up with me contacting the vendors directly. You don't tell anyone what your max budget it buying a house, let alone the agent acting on behalf of the seller. If you think otherwise, I'd love to sit down for a game of poker with you sometime!
 
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