Proof of finance?

padyjoe

I have started to bid on a house, did it before as well on different ones (it wasn't that serious) and never asked for a proof of finance.

With this bid I was but what I think it's against the game: if I let them know how much I have in reserve, the EA will have the advantage of squeezing me bone dry while I won't know anything about the other bidders. How to reveal that you are capable of buying and keeping the cards close to the chest?
My scenario is approx 50%:50% of mortgage:cash but thinking about stretching a bit more on the bank's side, apply for increase the mortgage.

Thank you!

L1011

It is always to an EAs advantage to know how much they can squeeze. Letters from the bank stating you've enough for that bid rather than providing full details are the way to go.

hhmmm?

I very much doubt you will be getting a 100% mortgage so show the ea your approval letter for the amount you are borrowing and just tell them the balance is in savings. They are really just trying to make sure you're a genuine bidder.

johnnyskeleton

I would be suspicious of estate agents who ask this. In the past ive walked away when they do so or challenged them on it till they give up.

In reality if you are looking to bid several times on several different properties, youd be going into and out of your bank every other day.

Hombre Lobo

If you have Approval in Principle with a loan provider just show them a copy of that with the amount redacted.
If they push it further, walk away. The EA has no right to know how much you are approved for and what's in your bank.
At the same time they are doing it to weed out time wasters or people putting in bids with funds they don't have or at least in principle.

bleary

It works both ways, the EA knows you are serious but you also don't have other bidders raising the price without the funds to back it up. Just remove the actual amount you are approved for from the docs.
I did it and hopefully it has worked for me

Askthe EA

I wouldnt take a bid without proof of funding. Yes, it does show me how much you are able to go to but I would never release that to my client. It does however allow them to make a more informed decision on who to agree to sell their house to. It allows them a measure of certainty as to the likelihood of successful sale completion.

It also swings in the purchasers favour however.

Lets say that you are bidding on a property. If I have seen proof of funding in support of that bid I know it is a valid bid. Anybody else who wishes to bid must provide the same as it stops them increasing the bid artificially (even unintentionally). You might have to bid more than you should have.

While we certainly have a bad rep in these here parts, there are a number of things people forget. Most agents make a percentage of a percentage of the sale price (The office takes most of the commission). After tax, any jump in sales price has to be fairly significant to be of much financial benefit, certainly for them to risk their license and livelihood with underhanded actions.

Time is money. Most agents would prefer a smooth transaction as opposed to a rocky but higher value one as it allows them time to move on to the next instruction.

I think proof of funding is becoming more and more prevalent and shouldnt be looked at as a negative.