Estate Agent failed to carry out due diligence

[pilotoscot]

I wonder what the view is here as I’m not sure where to go on this. House up for sale with very reputable London agent. Within a week we have a cash offer at more or less asking price. Advised to accept and take house off market.

Eight weeks later it’s clear that the offer wasn’t cash and agent had failed to seek proof of funds. Buyers are genuine and situation outwith their control but I’ve tried to find out and cannot definitely. What is the current requirement for estate agents to ensure proof of funds?

I’m seriously out of pocket and although I like the agents I don’t know how to approach this.

[paddy1970]

Change agent. Don't stay with them...they are muppets!

[normalbloke]

I’m afraid zero. This ‘cash’ buyer scenario, suddenly needing a mortgage or similar, is probably THE most common trick used to secure the sale of your property to themselves.

[pilotoscot]

Thanks. To be clear. The offer was accepted and went through conveyance for 8 weeks. The buyers were serious and still want to purchase. The buyer’s solicitor called a halt when there were doubts over proof of funds. My solicitor came back and said it never should have got this far and what checks did the agents do. Very little apparently. I thought there were all kind of checks required nowadays? Maybe naive?

[reggie82]

I bought a house recently and pretty much the first thing I had to do was show the estate agent proof of funds. I understood they had to do this for money laundering regs but may be wrong. It didn’t commit me to funding that way though (as far as I’m aware).

[Zarco]

We got caught out like this last year. It's a crap situation but is it really the estate agents fault? I didn't think they are obliged to do any checks.

I put all the blame on our 'buyer' who turned out to be a shyster.

[pilotoscot]

The buyers are anything but shysters in all fairness. They were the ones who said to me that they want to buy but in all sincerity they can no longer give a time frame. I’ve no problem with honesty but i’m certain they were honest with the agent and the agent dropped the ball.

[BertBert]

pilotoscot said:

The buyers are anything but shysters in all fairness. They were the ones who said to me that they want to buy but in all sincerity they can no longer give a time frame. I’ve no problem with honesty but i’m certain they were honest with the agent and the agent dropped the ball.

So why is it the fault of the agent, not the fault of the buyer who can't do what they said they could?

[meatballs]

I had to go through a telephone interview and send over my agreement in principle for mortgage etc to the vendors agent before they would accept the offer.

[pilotoscot]

BertBert said:

So why is it the fault of the agent, not the fault of the buyer who can't do what they said they could?

Because the agent didn’t ensure they had the funds in cash, as they had told me in writing. I thought initially they may have been misled by the buyers but apparently not. It seems they just didn’t follow up.

I’m sure they’ve cocked this up. I’m only really asking is it a requirement for agents when forwarding a cash offer to ensure proof of funds.

[Grrbang]

pilotoscot said:

Because the agent didn’t ensure they had the funds in cash, as they had told me in writing.

In terms of claiming against them - perhaps misrepresentation or negligence. In any case, you'd need proper legal advice, so the damage you suffered would need to be enough to justify the escalation.

[Zarco]

pilotoscot said:

BertBert said:

So why is it the fault of the agent, not the fault of the buyer who can't do what they said they could?

Because the agent didn’t ensure they had the funds in cash, as they had told me in writing. I thought initially they may have been misled by the buyers but apparently not. It seems they just didn’t follow up.

I’m sure they’ve cocked this up. I’m only really asking is it a requirement for agents when forwarding a cash offer to ensure proof of funds.

Eh? So the buyers didn't tell the agent they were cash buyers?

That is a weird one.

[Durzel]

pilotoscot said:

BertBert said:

So why is it the fault of the agent, not the fault of the buyer who can't do what they said they could?

Because the agent didn’t ensure they had the funds in cash, as they had told me in writing. I thought initially they may have been misled by the buyers but apparently not. It seems they just didn’t follow up.

I’m sure they’ve cocked this up. I’m only really asking is it a requirement for agents when forwarding a cash offer to ensure proof of funds.

Your buyers sound like dreamers to be honest. I’m not sure why you’re giving them so much latitude.

If the agent assumed they were cash buyers and didn’t check to confirm, that’s one thing, but for all you know the buyers strung the agent along as well - telling them they had cash and were ready to move quick, etc - and it turns out they don’t have two pennies to rub together.

I can imagine this can happen with selling houses. One or both of the buyers have their heart set on it, either convince themselves that they can afford it (but can’t) or simply want to live out the fantasy of going through the motions. Don’t assume that this is a fanciful proposition, there’s a lot of challenging people out there.

Let’s be clear here - not only do these buyers not have cash to buy, it sounds like they don’t even qualify for a mortgage on it either. They might be the nicest people in the world to meet, have a drink with, or whatever, but at the end of the day they’re still wasting everyone’s time and money.

[mcdjl]

pilotoscot said:

Thanks. To be clear. The offer was accepted and went through conveyance for 8 weeks. The buyers were serious and still want to purchase. The buyer’s solicitor called a halt when there were doubts over proof of funds. My solicitor came back and said it never should have got this far and what checks did the agents do. Very little apparently. I thought there were all kind of checks required nowadays? Maybe naive?

I'd be interested in what the solicitor found and why it took 8 weeks. Either they have a bank account with the cash in or not. Or they to buy the solicitor doesn't like where it's come from. I seen to remember showing the agents very little proof of funds/outline mortgage, the solicitor got to see much more.

[BertBert]

pilotoscot said:

BertBert said:

So why is it the fault of the agent, not the fault of the buyer who can't do what they said they could?

Because the agent didn’t ensure they had the funds in cash, as they had told me in writing. I thought initially they may have been misled by the buyers but apparently not. It seems they just didn’t follow up.

I’m sure they’ve cocked this up. I’m only really asking is it a requirement for agents when forwarding a cash offer to ensure proof of funds.

So either the estate agent made up the fact that the buyers were cash buyers, or they took it on face value from what the buyers said. Very different circumstances. Which was it?

[clarkey]

I once made an offer as a cash buyer (was going to remortgage existing house and rent out) but changed my mind when I got an offer to buy it for more than I expected. Not everyone is lying when circumstances change! I still bought the new house though.

[dundarach]

Have you actually talked to the agent?

Otherwise, buyer pitches up with suitcase full of cash and shows the agent.

Buyer thinks about spending cash on your house and thinks 'Nah seen a better one.'

Buyer tells you sob story.

Buyer tells agent sob story.

Who's wrong, agent or buyer or no one??

[LaurasOtherHalf]

st happens. I'd probably say "I'll keep you on as agents but I want my a deduction on your fees for the eventual sale to cover my costs, if not you can tear up your contract and I'll be going elsewhere".

Any agent worth his salt doesn't do sweet fk all until the potential buyer has proven their funds and passed a money laundering check. I wouldn't even be marking it as SSTC until that.

[wolf1]

Nothing is concrete in selling a house until the money is in your bank. Just instruct your estate agent that it stays on the market until at the least the buyers mortgage offer has come through after their survey (actual offer not agreement in principle).

Been through it twice in the last year or so and you get no end of dreamers, time wasters and genuine last minute issues causing a fall through. On both of ours we made sure the agent told potential buyers that it was 'first up best dressed' and if they were serious then they had better get to the finish line first as someone else more organised would beat them to it.

Worked out well for us as both our buyers pressed their solicitors and mortgage companies constantly to get a quick result instead of dawdling and slowing the process for everyone else.

[pilotoscot]

Zarco said:

Eh? So the buyers didn't tell the agent they were cash buyers?

That is a weird one.

They said they would be buying in cash once they’d sold a foreign company and the money had gone through anti-money laundering. They hit a snag in the AML. I can’t see them wasting thousands on legal fees if they didn’t at least believe it would go ahead. My issue with the agent is I wouldn’t have taken it off the market had I known the cash wasn’t sitting in an account.