Q A London estate agent is requiring that I undertake “financial verification” with their nominated broker before I can view a flat with them.
They say their broker is independent of them, and won’t pass my data back to them. However I feel uncomfortable that I would have to give any financial data to a third party at their request, and before I even have any intention of entering into a transaction. I explained this to them but they maintain I have no choice if I want a viewing.
I’m not trying to buy a multimillion-pound mansion, just a small ex-local-authority one-bed flat. Can they ask me to do this?
A They can and they must once you put an offer on a property in. Under anti-money-laundering legislation, estate agents are required to check that the money of anyone buying a property is coming from a legitimate source and is not the proceeds of criminal activity. If they don’t do these checks, they can be fined or imprisoned. They are also legally required to obtain proof of your identity and your current address.
There is no legal requirement for estate agents to demand “proof of funds” before you put an offer in. At this stage, asking for financial information is just a way of finding out whether you are a serious buyer and have a genuine interest in a property and you don’t have to comply with the request. It does seem odd to ask for proof of funds before even arranging a viewing but it’s not uncommon so if that’s how your estate agent chooses to do business, so be it. What is not acceptable is an estate agent insisting that you use its in-house mortgage broker (for which the agent gets a referral fee) before you’re allowed to view somewhere.