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Conflict of interest?

Baralis1

So I viewed a house. The estate agent that they are also the owner. They are not a regular property sales auctioneer but have a licence. I bid and they asked for proof of funds from me. Is there a conflict of interest here with regards negotiation etc?

Also, a similar house in the same estate went up for sale at a much higher price.

I thought this house was reaching closure but bids started to come in fast after the second house went up and I was outbid after a few bids but the highest bid has yet to be verified. No word in almost a week now. Am I entitled to ask for proof of bidding? I am essentially walking away from this but am suspicious! What do you think?

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C14N

https://www.boards.ie/discussion/comment/117993774#Comment_117993774

But if you are giving a redacted mortgage approval letter, they wouldn't know the split. I agree it's normal to request some kind of proof of funds, just that asking for actual bank statements is further than normal.

[Deleted User]

https://www.boards.ie/discussion/comment/117993458#Comment_117993458

Op has stated the seller only wanted statements to show POF if bidding ABOVE the amount for which he/she was mortgage approved.

C14N

https://www.boards.ie/discussion/comment/117993252#Comment_117993252

I have bid on many houses this year (roughly 15) and none asked for bank statements or anything like that. All asked for some proof of funds, but a redacted mortgage approval in principle sufficed in all cases. Only reason I could see for requesting statements would be if you were buying in cash.

BnB

https://www.boards.ie/discussion/comment/117992265#Comment_117992265

Well both your broker and solicitor are talking balls. I have bid on 5 houses this year with 4 different estate agents and in every case, I was was asked for proof of funds before the bid was fully accepted. So, wheather we like it or not, it has become normal for EA's to ask for it.

I can completely see why they do it as they want to cut out time wasters and dreamers. On the other hand though, I can see how it can be misused by the EA.

If possible, you want to just give them proof of what you are bidding and not tell them the total amount you have access to.

[Deleted User]

https://www.boards.ie/discussion/comment/117992249#Comment_117992249

As a seller, why would you accept a bid from someone who told the EA to piss off when asked for proof that they have funds to support their bid?

Personally, I think the EA would not be doing their job if they weren’t checking that the bids were genuine and the bidder had the funds for whatever amount they were bidding.

Kurooi

https://www.boards.ie/discussion/comment/117986860#Comment_117986860

Exactly that, both broker and solicitor told me any bank statements or letters of POF are just prying and it's NOT normal for EA to get these.

Kurooi

https://www.boards.ie/discussion/comment/117991339#Comment_117991339

All I'm saying is you can stand up to the estate agent if they're being unreasonable and asking for your accounts is just that, it might mean they will reject your bid but it doesn't have to. You don't have to be out of the bidding in fact make it clear that your bid is still on offer and if they throw 'conditions' reiterate it still - it is a bid, forward it to your client and let them decide. And make sure to email your bid to the general inbox of the estate agent so their colleagues have it too. The EA has to let the seller know of any bids and it will make them look extremelly bad to say 'there is a bid 5k higher, but I elected to say no to that and cost you that money because I didn't get documents off the bidder'.

Idk, if I was the seller I'd consider that EA incompetent, were their soft skills lacking or are they not bothered to push the bidder? Surely they do this because it's my money and not his being tossed. EAs know this and they know how easy it is for the client to just go next door and find someone that can close the sale.

JimmyVik

https://www.boards.ie/discussion/comment/117991339#Comment_117991339

Actually at the moment they will take the bid and tell the next bidder your bid, even if you dont have proof of funds. Just using your bid to push up the price even though the EA dont consider it a bid because you havent given proof of funds for.

[Deleted User]

https://www.boards.ie/discussion/comment/117989688#Comment_117989688

If it is a condition of the bid, and the sellers has other bidders, failure to provide POF’s just means you are out of the bidding. I think consideration of all bids should be contingent on the bidder being able to show they actually have the funds to support it. This also prevents other bidders having to pay more as a result of time wasters pushing the price up by bidding more than they can pay.

Kurooi

If you have a mortgage approval for the sum or close to value of the house, you shouldn't require proof of funds.

Clearly you have the funds. The bank checked that. EA will always be asking for too much documentation and you can (rather than walk away) just say you're not providing that. I had the exact same issue and said no, they still went ahead with my bid. If you're asked late enough in the process that you already have your solicitor on the case, they can help you out too in easing the pressure a little.

javaboy

https://www.boards.ie/discussion/comment/117986895#Comment_117986895

Ha yes 😕

stopthevoting

https://www.boards.ie/discussion/comment/117982669#Comment_117982669

"The EA is always on the buyer's side." Just to clarify, is this a typo?

Emma2019

https://www.boards.ie/discussion/comment/117983372#Comment_117983372

There have been news articles in the last few months about the fact this goes against GDPR.

Only give redacted AIP or a solicitor/broker letter confirming you have sufficient funds.

javaboy

https://www.boards.ie/discussion/comment/117983372#Comment_117983372

It's up to you how much of this you want to reveal. You're basically giving away your whole negotiating position if they know both your AIP amount and your bank balances. It's a sellers market so they can tell you to get lost if you won't show your funds I guess.

The EA wanted un-redacted AIP from me when buying but I got my solicitor to write a letter saying I had funds & AIP to back up the sale agreed price.

There is absolutely nothing stopping them from trying to squeeze more out of you until contracts are signed and by giving them all that info, they know exactly what your limit is.

ohnonotgmail

as it is their on house they are selling and they have no client do they have the same obligations as an estate agent selling on behalf of a client?

Baralis1

@javaboy the owner/auctioneer specifically wanted proof of funds to show I could back up the bid and would need bank statements etc if I was to bid over my mortgage approval. So I was told but I didn’t go over my mortgage approval amount

mrslancaster

It used to be more common that owners sold their own property without using an EA. Is there an issue that this seller happens to be an auctioneer? Maybe the property services regulator could advise on that.

If he is not acting in a professional capacity with all the regulations that entails then you are giving financial information to a private individual. Could your solicitor send the proof of funds to his solicitor?

javaboy

The estate agent is supposed to act in the best interests of their client so there's no real conflict of interest.

One interesting thing is that as the owner, they will know all the dodgy things about the house, which anecdotally estate agents don't want to hear about so they can claim plausible deniability. They can't reasonably say "not that I know of" if you ask them about issues with the house.

As far as proof of funds, I wouldn't go beyond redacted AIP that doesn't show the full amount or a letter from your solicitor confirming you have funds to back up your latest bid. The EA is always on the buyer's side. In this case there's a stronger reason to get a better sale price since they're on a 100% commission. There's more incentive for shill bidding I guess but the market is genuinely hot so there might be no reason for them to engage in those tactics.