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Estate agent won't accept offer until proof of finance

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  • 03-03-2014 9:04pm
    #1
    random10
    Registered Users Posts: 276 ✭✭


    Is this normal? We made an offer on a property, the estate agent won't bring the offer any further until a mortgage offer is shown to them? Is this normal procedure, we have the wheels in motion with bank and should have letter tomorrow or Wednesday but haven't heard of this before?


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    #2
    MouseTail
    Registered Users Posts: 1,663 ✭✭✭MouseTail


    It's standard if it is a bank sale. Possibly becoming more common in other sales also.


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    #3
    Cathmandooo
    Registered Users Posts: 17,324 ✭✭✭✭Cathmandooo


    Nothing wrong with it. It can cut out time wasters and move the sale along faster.


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    #4
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,505 Mod ✭✭✭✭johnnyskeleton


    random10 wrote: »
    Is this normal? We made an offer on a property, the estate agent won't bring the offer any further until a mortgage offer is shown to them? Is this normal procedure, we have the wheels in motion with bank and should have letter tomorrow or Wednesday but haven't heard of this before?

    Some ask some don't. You can get a letter from your bank simply stating that they are aware of the property and confirm that you can bid on it without specifying your max amount.

    I usually don't bother with those estate agents though. It just strikes me as really dodgy and a stupid thing to disclose.


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    #5
    Duckjob
    Registered Users Posts: 2,859 ✭✭✭Duckjob


    When we were bidding I gave the EA a photocopy of our mortgage approval with the financial details covered/blacked over.

    I think it's good to show them you have approval to demonstrate your intent to buy, but it's really none of their business how much you are able to bid.


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    #6
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    random10 wrote: »
    Is this normal? We made an offer on a property, the estate agent won't bring the offer any further until a mortgage offer is shown to them? Is this normal procedure, we have the wheels in motion with bank and should have letter tomorrow or Wednesday but haven't heard of this before?


    Yes. What's the issue!


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    #7
    random10
    Registered Users Posts: 276 ✭✭random10


    Not a bank sale, but have a feeling builder got stung before, waiting for buyer to sell their property


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    #8
    Arbiter of Good Taste
    Registered Users Posts: 2,200 ✭✭✭Arbiter of Good Taste


    Yes. We had to do this when we were buying.


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    #9
    unattendedbag
    Registered Users Posts: 456 ✭✭unattendedbag


    johnnyskeleton wrote: »
    Some ask some don't. You can get a letter from your bank simply stating that they are aware of the property and confirm that you can bid on it without specifying your max amount.

    I usually don't bother with those estate agents though. It just strikes me as really dodgy and a stupid thing to disclose.


    Not always possible to avoid the estate agent if you have your heart settled on a particular house and he's the only one acting on behalf of the seller. Looks like you have to play ball with them. Once you have the mortgage approval letter then go straight in with it. Hopefully nobody will have outbid you by then.


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    #10
    random10
    Registered Users Posts: 276 ✭✭random10


    unattendedbag wrote: »
    Not always possible to avoid the estate agent if you have your heart settled on a particular house and he's the only one acting on behalf of the seller. Looks like you have to play ball with them. Once you have the mortgage approval letter then go straight in with it. Hopefully nobody will have outbid you by then.

    Hopefully not


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    #11
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,505 Mod ✭✭✭✭johnnyskeleton


    unattendedbag wrote: »
    Not always possible to avoid the estate agent if you have your heart settled on a particular house and he's the only one acting on behalf of the seller. Looks like you have to play ball with them. Once you have the mortgage approval letter then go straight in with it. Hopefully nobody will have outbid you by then.

    I despair for my fellow property obsessed countrymen when they will do anything to secure the unique dream home!


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    #12
    Marchbride
    Registered Users Posts: 188 ✭✭Marchbride


    I think it's a good thing as it cuts out 'messers'.. You showing your approval just puts you in a better position to the EA. Just ensure your figure isn't showing on the letter. Good luck


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    #13
    Balmed Out
    Registered Users Posts: 4,716 ✭✭✭Balmed Out


    handlemaster wrote: »
    Yes. What's the issue!

    They would then know you're likely top bid.

    OP after getting approval ask the bank for a letter stating you're approval for the amount of you're bid.


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    #14
    Dortilolma
    Registered Users Posts: 255 ✭✭Dortilolma


    The EA asked us for this when we bought our house - we told him to call our mortgage provider (branch and contact) to get the confirmation that we were mortgage approved. That seemed to be sufficient.


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    #15
    moxin
    Registered Users Posts: 1,203 ✭✭✭moxin


    Balmed Out wrote: »
    They would then know you're likely top bid.

    OP after getting approval ask the bank for a letter stating you're approval for the amount of you're bid.

    As said by Marchbride, simply rub out the actual mortgage amount on the letter. Simple as that. It helps genuine buyers by excluding messers who bid on properties who don't actually have the finance in place hence preventing a false bidding war.
    For the cash element, don't show your entire savings, just move the required amount into a separate account and show that amount, thats all you need to show your proof. No intrusion of privacy.


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    #16
    Mr.McLovin
    Registered Users Posts: 470 ✭✭Mr.McLovin


    Estate agent won't accept offer until proof of finance

    wish they would all do this, the amount of time it would save, I've seen people get bid up on houses in the past by people who don't even have mortgage approval.

    some people check on online mortgage calculators and think that's what a bank will actually give them now-a-days only to find out they'll only get half that which frustrates sellers and mortgage approved buyers!


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    #17
    BeatNikDub
    Closed Accounts Posts: 603 ✭✭✭BeatNikDub


    Balmed Out wrote: »
    They would then know you're likely top bid.

    OP after getting approval ask the bank for a letter stating you're approval for the amount of you're bid.

    They are not and should not be asking for the amount, it is proof of funds which is a letter from bank or solicitor, the amount never and should never be disclosed.
    It would be bad practice for an EA to go sale agreed on a property with someone they have no idea can pay for it or not!


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    #18
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,505 Mod ✭✭✭✭johnnyskeleton


    moxin wrote: »
    As said by Marchbride, simply rub out the actual mortgage amount on the letter. Simple as that. It helps genuine buyers by excluding messers who bid on properties who don't actually have the finance in place hence preventing a false bidding war.
    For the cash element, don't show your entire savings, just move the required amount into a separate account and show that amount, thats all you need to show your proof. No intrusion of privacy.

    What good is a generic mortgage approval? I.e. if I'm approved for a one bed apartment in Ongar that is irrelevant to a 4 bed mega pile in Ballsbridge. If I have to get mortgage approval on every property I bid on, if I'm bidding on twenty different properties in a year that's a lot of calls to the bank.

    In relation to the cash element, supposing I want to bid 200k on a property with a 10% deposit and show them just €20k in the bank. If I am outbid to 220k, then I have to go back, get another 2k into my savings account, order a new statement, wait 4-5 working days for it and then send it to the auctioneer. By which time the bid has gone up to 240k and I need to do it again.

    Basically, either the proof of mortgage approval is just a meaningless letter, but one which can be a trap for the unwary, or else it is a lot of effort.

    As regards the suggestion that it cuts out time wasters, well look at it like this - if I want to pay no more than X on a property, I shouldn't offer any more than X on it. If I offer X - 20%, even if there are no other bidders, what's to stop an estate agent saying someone else has offered X - 10%. That's the way it works in this country. I can either go up to X or, if I think he's bluffing, stick with X - 20%. Then, if he was bluffing he can always ring me up saying that the sale has fallen through and does my offer still stand?

    I am highly skeptical of the suggestion that properties are being bidded up beyond what someone can realistically afford and then the sales falling through. Where is the evidence of it? The fact that properties are in fact selling, very often at what I would consider higher prices than they are worth, suggests at least to me that the people bidding are actually ready, willing and able to follow through.

    So I stick to my position that any estate agent who wants mortgage approval to be shown to them is simply trying to bump up the price, and I've no real interest in dealing with them.


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    #19
    BookBook
    Registered Users Posts: 99 ✭✭BookBook


    What happens if you are lucky enough to be a cash buyer and do not to need a mortgage what do estate agents ask for then?


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    #20
    MouseTail
    Registered Users Posts: 1,663 ✭✭✭MouseTail


    BookBook wrote: »
    What happens if you are lucky enough to be a cash buyer and do not to need a mortgage what do estate agents ask for then?

    proof of funds, letter from bank or a bank statement.


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    #21
    caew
    Closed Accounts Posts: 71 ✭✭caew


    johnnyskeleton wrote: »
    What good is a generic mortgage approval? I.e. if I'm approved for a one bed apartment in Ongar that is irrelevant to a 4 bed mega pile in Ballsbridge. If I have to get mortgage approval on every property I bid on, if I'm bidding on twenty different properties in a year that's a lot of calls to the bank.

    In relation to the cash element, supposing I want to bid 200k on a property with a 10% deposit and show them just €20k in the bank. If I am outbid to 220k, then I have to go back, get another 2k into my savings account, order a new statement, wait 4-5 working days for it and then send it to the auctioneer. By which time the bid has gone up to 240k and I need to do it again.

    Basically, either the proof of mortgage approval is just a meaningless letter, but one which can be a trap for the unwary, or else it is a lot of effort.

    As regards the suggestion that it cuts out time wasters, well look at it like this - if I want to pay no more than X on a property, I shouldn't offer any more than X on it. If I offer X - 20%, even if there are no other bidders, what's to stop an estate agent saying someone else has offered X - 10%. That's the way it works in this country. I can either go up to X or, if I think he's bluffing, stick with X - 20%. Then, if he was bluffing he can always ring me up saying that the sale has fallen through and does my offer still stand?

    I am highly skeptical of the suggestion that properties are being bidded up beyond what someone can realistically afford and then the sales falling through. Where is the evidence of it? The fact that properties are in fact selling, very often at what I would consider higher prices than they are worth, suggests at least to me that the people bidding are actually ready, willing and able to follow through.

    So I stick to my position that any estate agent who wants mortgage approval to be shown to them is simply trying to bump up the price, and I've no real interest in dealing with them.

    How does asking for mortgage approval bump up the price? We went and looked at a house, the agent asked if we were mortgage approved,we said yes. we put in a bid, the seller accepted the estate agent asked of proof of mortgage approval. We rang the bank, told them the amount we bid, they wrote a letter to estate agent confirming we are approved for that amount. Where is the bumping up of price?


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    #22
    jmayo
    Registered Users Posts: 13,186 ✭✭✭✭jmayo


    Duckjob wrote: »
    When we were bidding I gave the EA a photocopy of our mortgage approval with the financial details covered/blacked over.

    I think it's good to show them you have approval to demonstrate your intent to buy, but it's really none of their business how much you are able to bid.

    I would hope that no one is daft enough to show the EA what actual amounts they have in bank or are ultimately approved for.
    Then again I have heard of people doing some really stupid things when it comes to property.
    The ones bidding against themselves at an auction comes to mind.

    All that should be forthcoming is a letter that they have sufficent funds to meet their bid.

    I am not allowed discuss …



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    #23
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,505 Mod ✭✭✭✭johnnyskeleton


    BookBook wrote: »
    What happens if you are lucky enough to be a cash buyer and do not to need a mortgage what do estate agents ask for then?

    You are very lucky indeed. By a remarkable co-incidence, the purchase price of the property is exactly the amount of money you have in your bank account right now. Well done and thanks for playing!


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    #24
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,505 Mod ✭✭✭✭johnnyskeleton


    caew wrote: »
    How does asking for mortgage approval bump up the price? We went and looked at a house, the agent asked if we were mortgage approved,we said yes. we put in a bid, the seller accepted the estate agent asked of proof of mortgage approval. We rang the bank, told them the amount we bid, they wrote a letter to estate agent confirming we are approved for that amount. Where is the bumping up of price?

    By trying to find out how much you are approved for.


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    #25
    moxin
    Registered Users Posts: 1,203 ✭✭✭moxin


    Johnny, you have taken it up wrong.

    The estate agent just doesn't ask for only 10% proof, the agent will ask for full proof of your finance for your final bid that the seller has accepted. What I have highlighted is to exclude those who have ZERO proof of finance in the bidding wars, that's fair don't you agree?

    Mortgage - a letter is sufficient. Cash buyer, show proof of your funds, its that simple. Your analogy of bidding on a 1bed apt and a 4bed house at the same time is silly, who does that? In both cases, you'll either need proof of mortgage approval from your bank for each type of property and/or the cash to support the transaction. Its fair to everyone.


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    #26
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,505 Mod ✭✭✭✭johnnyskeleton


    jmayo wrote: »
    All that should be forthcoming is a letter that they have sufficent funds to meet their bid.

    And what if there is a bidding war and they need to put in several bids?


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    #27
    jmayo
    Registered Users Posts: 13,186 ✭✭✭✭jmayo


    Multiple letters, each one stating they can match their bid amount.

    Or would you actually think that they should tell EA that they have max 300k available even when you are currently bidding 250k ???

    I am not allowed discuss …



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    #28
    caew
    Closed Accounts Posts: 71 ✭✭caew


    You don't tell the auctioneer how much you are approved for.

    The auctioneer will ask when you start bidding are you mortgage approved, yes or no.

    Start the bidding process.

    When you get to the price you and the seller are agreed on then the auctioneer asks for proof of finance.

    You ring the bank, tell them the agreed amount, they issue a letter with the agreed price only on it.
    Simples.


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    #29
    Darith
    Registered Users Posts: 321 ✭✭Darith


    johnnyskeleton wrote: »
    You are very lucky indeed. By a remarkable co-incidence, the purchase price of the property is exactly the amount of money you have in your bank account right now. Well done and thanks for playing!


    Would you think an EA would infer that as a cash buyer you can therefore bid more if one was to produce a bank statement with just that bid amount? So is a bank or solicitor's letter the safer option? An EA could obviously infer that you have more cash but it is still a guess either way at the end of the day.


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    #30
    the_syco
    Registered Users Posts: 37,301 ✭✭✭✭the_syco


    Darith wrote: »
    Would you think an EA would infer that as a cash buyer you can therefore bid more if one was to produce a bank statement with just that bid amount? So is a bank or solicitor's letter the safer option? An EA could obviously infer that you have more cash but it is still a guess either way at the end of the day.
    No. Your bank puts whatever sum you want to bid on the letter saying you have the cash. But if you bid for €350k, and the letter says €480k, the EA will suddenly have other bids until it reaches your max.


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    #31
    Heart Break Kid
    Registered Users Posts: 834 ✭✭✭Heart Break Kid


    random10 wrote: »
    Is this normal procedure, we have the wheels in motion with bank and should have letter tomorrow or Wednesday but haven't heard of this before?

    People like this drive me insane. Technically you don't have finance to make the bid so you shouldn't bid. Constant properties where people where just driving up the value but in the end couldn't commit because they didn't have approval for finance. Get your approval first then bid.


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