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 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

6 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. Timothy Constable says:

    I am having trouble with money laundering my parents gave me money from there account which I gave 2years statements then they queried it due to parents taken 2 £10.000 and one £5000 pounds out of account my parents had taken money out of account for a family holiday due to my dad been ill to have a last holiday but they deposit it back into account as holiday was cancelled due to my dad seriously ill my solicitor is saying I can’t use holiday for £25.000 for money laundering purposes what can you advise please as I’ve been waiting 13 months to buy premises

    • Peter Johnson says:

      Thank you for your interest in our blog Timothy.

      The regulations may be interpreted subjectively by different law firms in different ways. I don’t think we have enough information nor would we advise through our blogs as to the appropriate response in this situation I’m afraid.

      Peter Johnson
      Senior Partner and Money Laundering Responsible Officer.

  3. james felsing says:

    we are looking to buy a property in scotland. we have exchanged and due to move in two months. Some agents will not let us view unless we have cash in the bank………really?

    • Matt Johnson says:

      Thank you for your interest in our blog James.

      As Scottish law (especiallly when it comes to conveyancing) is completely different to the law of England and Wales, you would need the advice of a lawyer qualified in the Scottish jurisdiction to confirm the position.

      Matt Johnson.
      Property Partner

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.