The Estate Agent has asked me for proof of funds. Why? And do I have to provide them?

Landscape view of an English countryside home

What are the reasons that the estate agent asked you for proof of funds?

The reason that your estate agent has asked you for proof of funds is two-fold:

  1. Estate Agents act for the seller and not the buyer. It is their job to market the property that they are selling, to achieve the best price and the best buyer for the property. This is the first reason that you may be asked for proof of funds, to show that you can actually afford the property. Often a simple bank statement or, when funds are held in investments such as ISA’s, bonds, or shares, a statement to show their value will suffice to satisfy the agent of this first criteria. If you cannot show that you can afford the property it makes you a less attractive option for a seller and the agent may advise their client to look for an alternative. Remember it’s not a matter of the agent looking to be nosey, they are simply doing their job.
  2. The second reason is a regulatory one. Since 10th January 2020 when the EU’s Fifth Money Laundering Directive became active, Estate Agents (and in certain circumstances Letting Agents) are required to obtain proof of funds from you when you submit an offer to buy a property. If the estate agent asks for proof of funds after you put an offer in, then they are not only checking that you have the money to actually pay for the property, but also that you haven’t acquired the money through criminal means. You must provide proof of funds if asked for it at this stage.

How to show proof of funds to the estate agent?

Proof of funds can be shown with:

  • An agreement in principle/mortgage in principle
  • Bank statements of your deposit amount (for mortgage buyers)
  • Bank statements of your cash amount (for cash buyers)
  • Evidence of you selling a property (if using the funds to buy the new property)
  • Evidence if the money has been gifted

The estate agent can ask you to provide more details of where your money has come from. This is normal practice as all estate agents must conform to the Money Laundering Regulations, and doing thorough checks is standard practice.

In certain circumstances, the Estate Agent may ask for further proof. This will depend on where you got the money for your deposit or the property’s price (if you are a cash buyer), the agent may ask for further proof to show that the money has come from where you have claimed.

What is further proof that the agent may ask for?

  • A letter from whoever gifted your money (for example your parents have given money towards your deposit, won the lottery, left money in a will)
  • Further bank statements from the past months/years (to show how your money has built up over time)
  • Evidence or receipts for gambling winnings, sale of shares, or other large amounts of money in your bank account

Best practice is to keep evidence of where all the funds going towards your property purchase have come from; that way you can be prepared if your estate agent asks for it.

When you are buying a property this is not the only time that you will be asked to provide proof of funds. Your lender (via your broker or direct if you are not using a broker), as well as your lawyer, will all require the same or similar information. It is best to be prepared in advance and not to get frustrated by their requests – remember they are only doing their job!


So, you are considering buying a property. Have you yet got solicitors in place? Alexander JLO Solicitors are one of the country’s leading law firms when it comes to conveyancing and buying a property in England and Wales. Our competitive fees coupled with decades of experience mean that we are best placed to assist you through the legal process of buying a property. Why not contact us on 020 753 7000 or email quote@london-law.co.uk for a free, no obligation quotation and see what we can do for you.
 
This blog was prepared by Matt Johnson, Partner with Alexander JLO. Matt has many years of experience dealing with leasehold, freehold and shared ownership properties for first time buyers, investors and seasoned property owners. His profile on Review Solicitors can be found here https://www.reviewsolicitors.co.uk/25952432/matthew-henry-johnson

8 thoughts on “The Estate Agent has asked me for proof of funds. Why? And do I have to provide them?

  1. Estelle Coole says:

    An estate agent has asked for proof of funds to ‘view’ the property and apparently they won’t make a viewing appointment without it. I feel very uncomfortable sharing this information without actually seeing the property and putting an offer forward. Is the way things are?

    • Matt Johnson says:

      Thank you for your interest in our blog, Estelle.

      The answer to your question depends on the agent’s policy and their instructions from their client, the seller.

      That being said, in my opinion it is unusual for an agent to ask for proof of funds before a viewing.

      Matt Johnson
      Property Partner

  2. Marina says:

    Hello, can I obtain proof of the date of an offer placed on a property from an Estate Agent if:
    I am not the seller
    I am not the buyer
    I am not the owner
    I need it for evidence in a court case regarding non disclosure

    Thank you

    • Peter Johnson says:

      Dear Marina.

      Thank you for your interest in our blog.

      You should make a request for voluntary disclosure to the Estate Agent if you have not already done so
       
      If they refuse you will have to make an application for specific disclosure before the court.

      Peter Johnson. Senior Partner.

  3. Steve Evans says:

    We gifted some money to one of our sons towards his potential new home
    The property lawyers involved are requesting that we as parents who gifted provide the following evidence , but feel the request is unreasonable and as it standing breaches our privacy and GDPR especially to point 5

    1. Confirmation of the relationship between you and the third party.
    2. Certified copies of their ID – see attached information sheet.
    3. Evidence of how the third party obtained the funds – please provide the third party with my contact details to discuss what is required from them.
    4. Confirmation in writing from the third party of the basis on which the funds are being provided to you. This must be in writing and signed by the third party and must confirm the amount they are providing, clarifying whether the funds are repayable or not, and whether they will be obtaining an interest in the property.
    5. Bank Statements of the third party showing the funds being transferred out of their account and your corresponding statement showing the amount being received.

    • Peter Johnson says:

      Thank you for your interest in our blog.

      Whilst I cannot comment on your individual case as I am not a party to it, I will point out that the Law Society has very stringent guidelines for solicitors to avoid money laundering both in terms of clients and any donors.

      These guidelines include establishing the relationship between client and donor, ID and proof of address of the client and donor along with evidence of a build up of funds or alternatively the source of the funds which are being provided, usually evidenced by the provision of bank statements.

      As to point four, solicitors, if acting for a mortgage lender, are also required to ascertain that any monies gifted are indeed that, a gift as opposed to a loan (which could prejudice the lender’s position).

      I trust that this assists.

      Peter Johnson.
      Senior Parter and Money Laundering Responsible Officer.

  4. Sarah Coxon says:

    I have sent the estate agent the draft consent order to show where the funds are coming from as this is now with the court. Unfortunately, it isn’t signed as I don’t have that paperwork. Nor it would seem does my solicitor – only my ex husband’s solicitor has it. She is unwilling to help at all, is the draft consent order enough to show proof of funds?

    • Matt Johnson says:

      Thank you for your interest in our blog.

      At the end of the day, it is up to the estate agent acting on instructions from their client (the seller) to determine their requirements.

      If you do not have the signed consent order (the lack of which may which may mean it is not sufficient for the agent’s AML purposes) can I suggest a letter from your solicitor confirming the position and indicating (as I presume it will) that the funds would emanate from their account. That should be sufficient to satisfy their money laundering requirements.

      Matt Johnson
      Property Partner.

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