Making an offer…You’ve found your ideal home, but what now? Well, you’ll need to make an offer through the Estate Agent to be passed on to the owner of the property…Sounds pretty straightforward, but there are certain pieces of paperwork and documents that you will have to provide before your offer can be processed and it really is best to have these in order before you even get to the offer stage.
With a sellers’ market such as the one we find ourselves in now, competition for prime properties is high and you don’t want to do anything that might delay your offer being accepted, or that might put you at a disadvantage compared to other interested parties, so knowing what you’ll need to provide is a must. It might seem frustrating that your Estate Agent is asking for what can seem like a lot of information before they can move your offer forward, but rest assured it isn’t just the agent or property owner nit picking, Anti Money Laundering regulations mean agents HAVE to be in possession of the right documentation, or they risk large fines and even prison sentences!
You can find out more about Anti Money Laundering Regulations here, and how they affect Estate Agents here.
In this short blog, we are going to focus on the paper work side of making an offer, there is of course a whole host of things to consider leading up to this point and you can get more advice in another of our helpful blog posts here.
So, when making an offer, what will you be asked to provide? Well, the first place to start is proof of how you intend to finance a purchase and, importantly, where those funds are going to come from.
Proof Of Funds
If you are raising a mortgage for your purchase, you will be asked to provide an agreement in principle from your lender (NOT from your Mortgage Broker) An agreement in principle is essentially a certificate or statement from a lender to say that they will ‘in principle’ lend you an amount of money. (find out more about AIPs here)
Whilst an AIP is required by the agent to show that they have taken steps under Anti Money Laundering Regulations to prove where your funds are coming from, it also puts you in good stead with the property owner as it demonstrates that you already know that you can, in theory, afford the property and that you have already taken steps to secure funding.
You will also be asked to provide evidence of any deposit funds that you will be using, where the money is and where it has come from. This is referred to as ‘source of funds’
You will need to provide sight of original bank/savings account statements (not just screen shots or banking app displays) and evidence of where those funds came from, whether that be evidence of having saved the money, inherited it, or if it came from a pension fund, dividends, sale of shares, gambling wins or was gifted to you.
If any part of the funds you plan to use to purchase are gifted to you, whether from a family member or anyone else, you will be asked to provide identification for the person/people giving you the gift and the agent will need to see original, full, bank statements to prove where the funds are and where they have come from.
It may sound like the Estate Agent is asking for a lot of information from you at the offer stage, but it is a legal requirement, and the Agent must be able to provide evidence to the authorities, if it should be asked for.
The same goes for proof of cash funds if you are not purchasing with a mortgage, again, original bank statements/savings accounts and proof of where the funds have come from will be required.
Proof Of Identity
You will need to provide proof of identification and current addresses for all purchasers, meaning if you are purchasing with a partner, spouse, family member or friend, you will all need to provide proof of identification.
Types of identification that are acceptable are quite limited, so it’s worth making sure you have updated any passport, driving licences or utility bills if you have had a change of name or address.
Standard ID types are:
- Current full signed passport.
- Current photo card driving licence (UK or EEA / Full or Provisional)
- Full old style driving license.
- EEA member state identity card / resident permit.
- Armed Forces ID card.
- State pension or benefits book / recent notification letter.
- Firearms or shotgun certificate.
- National Identity Card bearing a photograph of the applicant.
- Residence Permit issued by the Home Office to EEA National on sight of own Country Passport.
The following documents may be used as evidence of address:
- Current UK driving license (but only if not used for the name evidence)
- The most recent utility bill / statement (must be issued within the last 3 months) or a certificate from a utility supplier confirming a pre-payment arrangement for service. Mobile phone bills are not acceptable.
- Current local authority council tax bill (no more than 1 year old)
- Most recent original bank, building society or credit union statement (must be issued within the last 3 months), or passbook containing current address (must have been updated within the last 3 months).
- Local council or housing association rent card or tenancy.
- Most recent original mortgage statement from a recognised lender
- HMRC issued document concerning tax matters such as – Tax demand, Self-Assessment, PAYE Coding, Tax Credit. (A P60 or P45 is not acceptable as this is produced by the employer).
- State Pension or Benefits Book / recent notification letter (this is not acceptable for both personal and address ID).
- Land Registry confirmation of address.
Along with providing these documents, you may also be asked to fill in a ‘Declaration of Offer’ form which will outline the information above, provide the agent with the correct personal details including correspondence address’s, inclusion of any fixtures and fittings information, source of funds information, details of chosen solicitors to handle the transaction and any other information that may be of assistance in managing the transaction. The more accurate these details are and the quicker they are provided, the quicker the moving process can begin! If you haven’t already got a solicitor lined up, your agent can most likely recommend one for you. In fact, with the Hannells Complete Moving Experience, we can cover pretty much everything!
Making sure you have the correct documentation in place and can provide it to the agent as quickly as possible can help to make sure you’re at the head of the line when you find that dream property. If you take too long to get the paperwork together, someone else might just get in before you!
A few minutes checking and preparing the right documents, can make all the difference!
If you need any advice at all about the buying, selling or renting process, don’t hesitate to get in touch with your local Hannells team! You can find your nearest branch here.
