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Approval in Principle - do EA/banks check?

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  • 09-05-2016 7:40pm
    #1
    jayjay2010
    Registered Users Posts: 505 ✭✭✭


    Hi

    I know some estate agents ask for approval on principle letters to confirm that the funds are there when bidding on a place but do they actually get in touch with the bank in question and confirm this approval?

    My friend recently placed an offer on an apartment (it's a bank sale) and the estate agent asked for approval letter to be scanned over to him. Will they be able to ring the bank with any reference number to check the funds approved?

    My friend doesn't want the estate agent to know his total funds balance as he wants to be able to bid without them knowing how high he could potentially go.......


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    #2
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,712 Mod ✭✭✭✭Henry Ford III


    The estate agent will want to see that your friend is in a position to complete the purchase. That's not unreasonable is it?


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    #3
    jayjay2010
    Registered Users Posts: 505 ✭✭✭jayjay2010


    Henry Ford III wrote: »
    The estate agent will want to see that your friend is in a position to complete the purchase. That's not unreasonable is it?

    All he wanted to know is if the estate agent has the ability to contact the bank and confirm funds? the letter of approval will have the funds figure there but if the estate agent wanted to talk to the bank to confirm this approval would he have access to that kind of information?


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    #4
    sozbox
    Registered Users Posts: 1,399 ✭✭✭sozbox


    I've been asked for it about half the time. I think it should always be required as it weeds out the Walter Mitty 'bidders' who have wasted time.


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    #5
    Gumbo
    Moderators, Society & Culture Moderators Posts: 39,407 Mod ✭✭✭✭Gumbo


    jayjay2010 wrote: »
    All he wanted to know is if the estate agent has the ability to contact the bank and confirm funds? the letter of approval will have the funds figure there but if the estate agent wanted to talk to the bank to confirm this approval would he have access to that kind of information?

    No, the bank will not release that data to a third party.
    It's worth noting that approval in principle means nothing tbh, you need concrete approval. We were AIP with TSB and when we told them that this is the house we are buying, they rejected it for some reason?

    We went straight up to Ulster bank and were approved and bought without any major complications.


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    #6
    whiskeyman
    Registered Users Posts: 12,564 ✭✭✭✭whiskeyman


    Sorry to take it off topic... But how do you know if its a bank sale?

    Is it still done through the EA?
    Were you told from the outset?


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    #7
    yankinlk
    Registered Users Posts: 2,740 ✭✭✭yankinlk


    The AIP is for the seller to judge your bid against any others. Do you know if you are the only bidder for the property? If you are in a bidding fight and decide not to show proof... I know as a seller I would not pick you even if you are the highest bid.

    You of course risk giving info over to the auctioneer that can be used against you... but sure that's the problem with having only auctioneers to represent only the seller side.

    I said it last boom and I say it again this time...bring in buyer representation and make the auctioneers split the commission.


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    #8
    Beanybabog
    Registered Users Posts: 1,455 ✭✭✭Beanybabog


    A lot more seem to be asking in my opinion. I sent a redacted letter - blacked out the approval figures and it was fine


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    #9
    jayjay2010
    Registered Users Posts: 505 ✭✭✭jayjay2010


    whiskeyman wrote: »
    Sorry to take it off topic... But how do you know if its a bank sale?

    Is it still done through the EA?
    Were you told from the outset?

    Thanks for all the replies.

    The estate agent has confirmed that it is a bank sale and that before sending any offers to the bank he needs proof of funds. He knows that my friend is a first time buyer.


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    #10
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    jayjay2010 wrote: »
    Thanks for all the replies.

    The estate agent has confirmed that it is a bank sale and that before sending any offers to the bank he needs proof of funds. He knows that my friend is a first time buyer.

    It would be interesting to find out how the estate agents position fits in with the Code of Practice for Property Service Providers.
    3.3: Duty to Customers

    Property Services Providers should take all reasonable steps to ensure that:

    -- //snip//--

    Offers made by a customer are promptly relayed to the client.


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