Proof of funds- estate agents

A vendor should be entitled to apply whatever criteria he or she chooses.

I am aware of some properties where the vendor has ruled-out anyone with a mortgage for example. i.e. cash buyers only.

PolkaDot said:

Are you saying that people who want to trade-up should be expected to have sold their property before they even start bidding on another property?

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On a number of occasions estate agents have refused to accept a bid from me as I was also going to sell the current property. They are perfectly entitled to do so due to the number of sales that fall through in such scenarios. Their clients, the vendors, almost always want the sale to proceed quickly and don't want to take on the risk of market moves while waiting a month or more for a purchaser to wrap up the sale of their property.

Proof of funds in busy markets have been around a lot longer than Covid. I was once at a Sherry Fitz viewing in South Dublin for a property that was back on the market for the third time in months. The agent had a good rant about getting solicitors letters from bidders confirming funds were available only for it to transpire they were unable to secure the necessary finding to close the sale.

It depends on the vendor and the property. Someone selling a wreck in the middle of nowhere can't be choosy. An executor might be happy to wait around and take a higher offer from someone reliant on own sale.

AFAIK Irish banks don't do bridging finance which is a big pity.

DeeKie said:

This new rule introduces a barrier to operating in a market and so should be justified with hard facts to be introduced.

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This isn't a "new" rule. I had to show proof of funds when bidding on a house in Dublin 14 back in 2011. It's pretty common in busy areas.

People frequently bid without having funds in place. Or bid more than they can afford. Or lie about having to sell their own house. Even with these checks in place, it's not foolproof.
This is one of those topics where your view will completely change when you're selling.

Steven Barrett said:

No I am not. But a vendor shouldn't have to wait on a buyer selling their own property before the sale of their own home goes through. It is a very difficult thing for people to time. Where are they going to live if the sale of their own home goes through first? There's not that many short term rentals available.

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So where does the buyer live in between selling their house and buying the other one? It's a vicious circle.

Gordon Gekko said:

A vendor should be entitled to apply whatever criteria he or she chooses.

I am aware of some properties where the vendor has ruled-out anyone with a mortgage for example. i.e. cash buyers only.

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That's fine, IMHO. It just needs to be clearly publicised, from Day 1.

Maybe specificity completion within "X" days, or a penalty of "Y" applies etc.

(I've edited my post to remove mention of Onate, as they only provide bridging for corporates, apparently).

PolkaDot said:

So where does the buyer live in between selling their house and buying the other one? It's a vicious circle.

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If they're buying in a quiet area where the vendor is happy there's any offer to buy and are willing to wait, both parties work via their solicitors to close both sales in quick succession. Some aim to close both transactions on the same day, few make that work.

In busy areas most vendors don't want to wait around what might be months for a few extra k. An approach I and many others have taken is to go back to the lenders to alter the proposal to including retaining and letting the current property. Some banks will allow a percentage of the projected rent as income. Once you buy the new house, you can then sell the old one, the bank will not care that you don't follow through and let it. You can then take the proceeds of that sale to pay down some of the new mortgage (bear in mind if fixing)). Of course this only works if you have the full deposit in savings and you're not close to the loan to income lending limits.

If you are looking to borrow close to the limits or don't have significant savings, the alternative in these areas is to sell the current house, stay with family/ friends or rent while you close on the next home. Of course there are risks to that approach too in that what you plan to be a few weeks turns into a few months or more if supply is low, and if the market is rising at any significant rate, you don't want to cash-out too long before you buy back in.

PolkaDot said:

So where does the buyer live in between selling their house and buying the other one? It's a vicious circle.

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It is. But they are not entitled to hold up the sale of another property until they sell theirs. As I said in my first post on this, it will clog up the whole system.

Say the buyers of the house they want to sell also has to sell their house. Now the seller of house #1 has to wait for 2 other properties before they can move themselves. It can't work like that.

Steven Barrett said:

Say the buyers of the house they want to sell also has to sell their house. Now the seller of house #1 has to wait for 2 other properties before they can move themselves. It can't work like that.

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And if one of those goes like my first house purchase they'll be waiting 9 months

Steven Barrett said:

Say the buyers of the house they want to sell also has to sell their house. Now the seller of house #1 has to wait for 2 other properties before they can move themselves. It can't work like that.

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It has 'worked' like that for years though, hence the proverbial 'property chain'.

However there appears to be a move away from that nowadays with chain free purchasers being favoured for obvious good reason.

I can’t fathom the idea of committing to selling my house and then being in limbo for an unknown period of time, hoping to find the right house that I’d like to buy. Yet that seems to be what’s expected these days.

I don’t want to sell my house until I find something that I feel is worth moving for. Looks like I won’t be moving!

While people are giving out about estate agents, why isn't anyone questioning the length of time conveyancy takes? This is what causes the massive delays. Is the system really that slow? Has it not gone online yet?

I’m giving out about process, it’s irrelevant to be if it is sellers or EAs driving it. I will start giving out about conveyancing when I get to that stage.

DeeKie said:

I’m giving out about process, it’s irrelevant to be if it is sellers or EAs driving it. I will start giving out about conveyancing when I get to that stage.

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And will you make a complaint to the Law Society at that stage? Consideing your opening post was about going to to the CPCC.

Steven Barrett said:

While people are giving out about estate agents, why isn't anyone questioning the length of time conveyancy takes? This is what causes the massive delays. Is the system really that slow? Has it not gone online yet?

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As someone going through a house move at the minute, agree 100%. We were sale agreed within a few days of putting the house on the market, but the conveyancing is still dragging on and on 14 weeks later for no good reason really, there have been no issues just the multiple solicitors involved in the chain taking an age at the various steps.

In my experience conveyancy is usually held up by either the buyer or the seller rather than the legal work. Solicitors will insist on getting documents but they are usually held up by particpants unwilling to push it along.

elcato said:

In my experience conveyancy is usually held up by either the buyer or the seller rather than the legal work. Solicitors will insist on getting documents but they are usually held up by particpants unwilling to push it along.

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Yeah to be fair I can't lay all the delays at the fault of the solicitors, the purchaser's of our house don't seem to be the most organised themselves, though there's stuff like sitting on a survey report for a month before deciding to send queries on it, along with taking weeks to send out contracts (when they have the deeds) etc that took unnecessarily long.

I don't know how the conveyancing process works in other countries but there has to be a better way than what we have.

I thought I had managed to add a smiley to that post. If I wanted to complain about conveyancing it would not be to the Law Society. Legal reform is required. Solicitors play the cards dealt them.

Offr.io is a good step forward, tbf.

OP, to answer your original question, I was able to have my mortgage manager issue several versions of the AIP letter to me, each with a different amount.

I was approved for €600k mortgage (so had a budget of €750k allowing for 20% deposit) but the house I wanted to bid on was €550k and the bank were happy to give me an AIP letter indicating that I was in a position to purchase at that price.