BUYER REQUIREMENTS

So, you have had an offer accepted on a property. That's great news!

Before your offer can be formally accepted and progressed, we will now need to establish some more detail about you and your intended purchase. This includes details on your Financial Arrangements. This may seem intrusive but it is now a legal requirement for us to obtain all of this information as part of our buyer qualification and risk assessment process - without exception.

It is understandable that once you have had an offer accepted you will want the property to be advertised as SSTC or Under Offer. This will only take place once all of the following checks are completed and approved by one of the Agreed team, so being prepared will ensure this happens without delay. 

The seller will never see your documents. They will only be informed when you have submitted documents and whether they have been approved or not.

FINANCIAL ARRANGEMENTS (PROOF OF FUNDS)

We are required to identify the full details about how you intend to fund the purchase. It may be that you are using proceeds from a sale, raising a mortgage or using cash. In any event, we are required to obtain 'proof of funds' and in many cases, information on the 'source of funds'.

Acceptable funding evidence includes one (or a mix) of:

  • Bank statement. A recent statement (dated within 30 days) showing the purchase price or deposit amount.
  • Mortgage AIP. A valid Agreement in Principal from a lender or Financial Advisor.
  • Letter from bank manager. A letter or email from your bank manager vouching for funds available for the purchase price or deposit amount (dated within 30 days).
  • Letter from financial advisor. A letter or email from your financial advisor / wealth manager to confirm approval of your funding method (within 30 days).
  • Memorandum of Sale. If your purchase is dependant on a sale of another property, we will need to see a letter or Memorandum of Sale from your sales agent showing details of the sale.
  • Mortgage statement. If you are purchasing from the proceeds of a sale, we are required to verify the balance of any outstanding finance on the property being sold (within 30 days)

Source of funds may also be required. This may include:

  • · Savings. If you have saved the money yourself, you will need to provide bank statements going back over a period of time showing how you gradually built up the money.
  • · Gift. A letter from the person gifting you the money plus evidence of how it came into their possession.
  • Inheritance. Evidence from the executors of the estate.
  • Sale of a property. A copy of the completion statement from your solicitor. Alternatively, a copy of a statement showing the money being received from a solicitor.
  • Pension. A copy of your pension statement and a copy of your bank statement showing the money coming in from a pension firm.
  • Gambling winnings. Won the lottery? Lucky you! If you plan to buy a house, you'll need to show a receipt proving your winnings. 
  • Compensation. A copy of the letter you received from a solicitor or court confirming your compensation settlement. 

AML & ID CHECKS

We are required under Money Laundering Regulation 2007 to obtain a valid ID and proof of address for each purchaser. We will require one document, dated within the last three months, from each of the following sections for each buyer:

Photo ID

  • Driving License
  • Passport


Proof of Address

  • Utility Bill (not mobile phone bill)
  • UK Driving License (if not used for photo ID as well)
  • Mortgage Statement
  • Bank / building society statement
  • State pension benefits book
  • Home or motor insurance certificate
  • Current local authority tax bill / tenancy agreement


As part of our AML requirement we are also required to complete a PEP (Politically Exposed Person) check for each buyer.

SOLICITORS

You will need to appoint a solicitor to handle the transaction for you. You can use one of our recommended solicitors or you are free to choose your own. It is advisory that you appoint a solicitor within two working days of having your offer accepted. 

WHY WE NEED SO MUCH INFORMATION

It is now a legal requirement for all estate agency companies to undertake several checks once an offer is agreed with a prospective buyer. These checks include satisfying rules set out by The Property Ombudsman, Anti Money Laundering regulations set out by HMRC and (as of January 2020) the EU Fifth Money Laundering Directive. 

In some cases, agents are also required to complete a Risk Assessment for each buyer where unwillingness to provide information on funding (including its source), automatically triggers the buyer to be a 'high risk'.

More information can be found at the following websites:

https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/do-estate-agents-need-proof-of-funds/

https://www.propertymark.co.uk/advice-and-guides/buying-a-home/estate-agent-checks.aspx