What is the current practice for bidders to show that they can afford to buy?

Leo said:
Have you read the thread??? That's not proof. Even my last purchase, my solicitor gave me such a letter without ever seeing any evidence.
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I have. It is/was proof in my case..

My solicitor saw the evidence of my max bid so did a letter for me. That your solicitor doesn't abide by the standards expected by the law society, suggests you should get another solicitor.

If you produce a letter from a reputable firm of solicitors, the estate agent will accept this as proof. Having bought and sold several properties over the years, no estate agent has had an issue with this from the large franchises to the small independents.
 
euroDilbert said:
In order to go "sale agreed" a more detailed check of the funds is required - when they will request full verification.
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In my experience agents do not get involved in an actual verification of funds. They cross their fingers and hopes all works out.

AIPs and bank statements are commonly distributed via PDF these days, 5 minutes and anyone competent on a computer can edit them to whatever they want them to say. A bank is never going to confirm the veracity of a statement to a 3rd party.
 
Leo said:
Even my last purchase, my solicitor gave me such a letter without ever seeing any evidence.
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I’m at early stages and my solicitor said he will need to see proof of funds, AIP, house valuation before issuing such a letter.
 
Dazzler123 said:
I have. It is/was proof in my case..
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It's not proof, it's simply the opinion of your solicitor at a point in time.

Even if your solicitor does sit with you and watch as you log in to your bank accounts, they have no way of knowing how much of that money will remain when the time comes to close a sale.

Dazzler123 said:
My solicitor saw the evidence of my max bid so did a letter for me. That your solicitor doesn't abide by the standards expected by the law society, suggests you should get another solicitor.
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That the agent referred to above had so many sales fall through due to insufficient funds after receiving solicitors' letters stating funds were in place suggests it may well be a widespread practice. Then again, as above, purchasers getting cold feet and using the lack of finance get out clause is possibly more likely.
 
Leo said:
It's not proof, it's simply the opinion of your solicitor at a point in time.
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It’s a layer of assurance.

Most people will not attempt to pass off fraudulent documents on their solicitor and most solicitors have rudimentary checks on veracity of documents. In fact, it’s in a solicitors’ interests here as they don’t want to a sale to fall through either.

These factors are multiplicative, not additive.

So I don’t think that fake assurance solicitors are common. Indeed it’s kind of pointless if you can’t eventually afford the house.
 
Dr Strangelove said:
Indeed it’s kind of pointless if you can’t eventually afford the house.
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I have seen people bidding who could not afford the house but just hoped that something would turn up or that they could persuade the bank to give them more because they really wanted the house.

A lot of sales fall through and I imagine some of them must be due to insufficient funds.
 
Leo said:
It's not proof, it's simply the opinion of your solicitor at a point in time.
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That same weakness applies to showing the estate agent your bank accounts. It's nitpickery. I have provided evidence that satisfied the estate agents I dealt with at the time. My experience is all I can speak to.

Leo said:
That the agent referred to above had so many sales fall through due to insufficient funds after receiving solicitors' letters stating funds were in place suggests it may well be a widespread practice. Then again, as above, purchasers getting cold feet and using the lack of finance get out clause is possibly more likely.
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I agree it's more likely cold feet as alot of buyers want a home to tick all of their boxes when in fact it's incredibly rare to find one that does within your budget.
 
Brendan Burgess said:
So what happened if you were outbid?

Did you need to get a new solicitor's letter?
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I have only provided the solicitors letter where the estate agent has not accepted my word and / or mortgage approval letter (with sums redacted). And even then, only when asked and only when we were coming to the end of the bidding war.

It does not happen often enough for it to be a recurring issue.
 
Dazzler123 said:
and only when we were coming to the end of the bidding war.
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But a number of agencies are looking for confirmation before they will let you place a bid. You can't bid via the Sherry Fitz app for instance until they are satisfied with the documents submitted.
 
Leo said:
But a number of agencies are looking for confirmation before they will let you place a bid.
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That has not been my experience.

Leo said:
You can't bid via the Sherry Fitz app for instance until they are satisfied with the documents submitted.
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I haven't used this service or others like it. When pushed towards using it I have politely refused and done things the usual way.

Part of the estate agents job is to know tyre kickers and nosy neighbours at viewings too. They know from how you behave if you are a serious bidder or a time waster. It is always a good thing to speak with the agent at a viewing for this reason.
 
Dazzler123 said:
When pushed towards using it I have politely refused and done things the usual way.
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In other words, you walked away from houses you were interested in and left the field clear for other bidders.

I will say it again... In a competitive market show the estate agent and the seller that you can close without any difficulty.
 
Brendan Burgess said:
In other words, you walked away from houses you were interested in and left the field clear for other bidders.
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Nor at all. In fact, when I was asked to bid over the online portal when purchasing my family home, I did as I set out above and politely declined, making offers in the traditional sense. Far from leaving the field clear for others, I was the successful bidder.
 
I bought my house last year in cash and all i provided was a solicitor's letter confirming I had enough to cover my bid. When bidding increased I provided a 2nd one but after that the estate agent just emailed me advising they don't need further letters and that they will take it on my word. Bidding was on one of online portals call Offerly i think.
 
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