One of the things we know frustrates our clients during the house buying process is having to repeatedly produce all sorts of different forms of ID in order to verify their identities and prove they have the required funds at every stage.
While there is of course a reason all of this information is needed – not least for protection against potential fraud and/or money laundering – we thought it may be useful to very briefly go through what is needed and why.
ID Checks
Whether it’s us as your solicitors, your bank or your estate agent, we need to know you are who you say you are.
We know it’s irritating (we get told often enough!) but please remember this is probably the first time we’ve met so we have to be absolutely sure, especially as we’re under very strict professional obligations to carry out these checks so your identify is beyond any legal doubt.
Money Checks
It’s really just the next stage of the same story when we ask you to prove you have the necessary finances to complete the sale and provide proof of their source. We just need to know that source is legitimate.
Repetition
We also know that we’re all pretty much asking for the same information and that it would be easier if we could all just confirm we have the details to each other. The only problem is lawyers, banks and agents are all regulated in a slightly different way and if something was to go wrong, we have to answer in a different way to a different body so we do (unfortunately) need to verify your details independently.
The need to maintain this model as only been brought into sharper focus with the increases in personal data protection regulations and, in particular, the launch of GDPR in 2018.
Fraud prevention
Given the large amounts involved, property has always been one of the main ways criminals have ‘wash’ their illegal income. This is one of the key reasons why we need to prove who we are and where the money behind the transaction’s come from.
This is relatively straightforward if you are borrowing the money from a bank as you’ll have your official mortgage offer. But, if you are using savings, the proceeds from another sale, inheritance or even a gift from mum and dad, you will need to be able to prove exactly how much you received and from where.
To try and make the process at least a little easier for you here’s a very quick checklist you can print off and tick off if you are about to go through the process of buying a house:
However, if you are planning to use an inheritance, you will need to bring signed evidence of the amount from the executors of the estate. Or, if you are planning to use money you’ve been given, the person who’s given you the money will need to provide you with a letter confirming the gift, the amount and the fact they will not have any legal rights to the property.
If you’re in the process of finding or buying a new home and have any questions, please email me at Jeremy.Tulloch@collinshoy.com or call me on 0208 515 6600.