Sourced Deals Pre-Approved for Finance
You may or may not be aware that for some years the finance sector has had a very dim view of the property sourcing sector. Those deals sourced by sourcing agents have not been trusted and when a property for purchase is submitted for review and assessment for finance by a broker, one of the questions asked on the application form is, where or how was the property found? Response options include: ‘estate agent’ or ‘sourcing agent’, if sourcing agent was chosen then finance would often be refused without the deal even being assessed, purely due to the fact that it had been found by a sourcing agent.
Now, you may say, “well I’ve never had any problems getting finance for my sourced deals”, or “my investors have never had any problem getting finance for a deal I’ve sent them”.
But, in either case do you know what was declared on the application form? The probability is that they were declared as coming through an estate agent and so those red flags weren’t raised. Finance-related challenges, such as declined mortgage applications, are a leading cause of property deal collapse, resulting in wasted time and unnecessary stress for investors and sourcing agents alike, but also the problem for the investor or buyer in those cases is that, if you’re caught lying on the application form, it would be considered to be mortgage fraud!
Furthermore, even if you are successful in obtaining a mortgage offer for your client, you then have to contend with the many checks which the conveyancer will be carrying out. And this is not well known, the conveyancer acts on behalf of the client as well as the lender. The conveyancer may ask the question how was the property sourced. If no agent details can be supplied, the transaction is considered off market! Even worse, lenders share information with one another. This is all due to anti-money laundering rules which you may know are very strict in the UK. We feel it’s best to protect your clients from being flagged as fraudulent applicants. This can have a devastating impact for future applications. The worst part, lenders reserve the right to not disclose why an application has been declined!
The National Association of Professional Sourcing Agents (NAPSA) has been well aware of this issue for some years and has spent a lot of time and effort in trying to find solutions to the problem. We feel that most deals sourced, if those agents operate professional and legally of course, pose no more of a threat than any found through an estate agent.
So, after a long and often painful search, with a lot of negativity thrown our way to boot, finally NAPSA has found a mortgage company that were not only keen to sit down and chat about the issues but do a lot of leg work, liaise with all of their finance providers, explain what the plan was and pull together an plan of action to solve the problem!
NAPSA and SPV Mortgages Partnership
In May this year, NAPSA & SPV Mortgages announced their partnership. The start of a strategic partnership and 12-month pilot scheme, aimed at tackling one of the biggest, hidden hurdles in the property sourcing sector. This collaboration is set to revolutionise the property sourcing sector by providing sourcing agents and deal packagers with a reliable way to assess the finance-ability of deals before presenting them to investors.
With this partnership, NAPSA and SPV Mortgages will run a one-year pilot scheme to identify key factors in successful financing and help create a smoother process for property professionals.
How Does It Work?
This initiative introduces a simple, streamlined process for pre-assessing the financing potential of property deals:
Submit Your Deal Information: NAPSA-approved agents complete a pre-designed form with all relevant deal details.
Viability Analysis: SPV Mortgages reviews the deal with their panel of financial partners.
Confirmation: SPV Mortgages provides feedback on the potential mortgage options, equipping sourcing agents with crucial insights to include in the deal presentation to investors confidently.
Data Tracking: SPV Mortgages and NAPSA collect data from the pilot scheme to identify trends, challenges, and solutions in property deal financing.
This service is provided at no additional cost to NAPSA members, further empowering sourcing agents to deliver high-quality, viable deals to their clients.
This partnership aligns with NAPSA's mission to provide credibility, professionalism, and compliance within the property sourcing sector. By focusing on improving standards and supporting approved members, this collaboration empowers sourcing agents to excel in their business whilst strengthening the market's confidence in deals sourced or packaged by an agent.
Jonathan Veers, Founder of SPV Mortgages believes that Off-market property deals can present unique financing challenges for investors and sourcers to overcome. Lenders frequently look upon private property deals with suspicion and misunderstand the value of today’s sourcing agents in delivering professional results to investors. The partnership with NAPSA, has enabled us to open doors which have previously remained closed to property sourcing agents and deal packagers.
How does the Pilot Scheme work?
The pilot scheme is exclusive to NAPSA-approved members, ensuring that only credible agents meeting national compliance standards can participate. This select approach not only enhances data reliability but also reinforces NAPSA's commitment to maintaining industry standards for the safety of both agents and investors.
The pilot scheme will give sourcing agents, access to approximately 40% of lenders at this time, those who are willing to work with the sector for 12-months and then assess the outcomes. More lenders are keen to take a look again, when the data gathered by NAPSA and SPV Mortgages has been shared; with the goal at the end of the pilot scheme to have 90% of all lenders willing to work in this way.
What investment strategies can be covered in this pilot scheme?Buy to Let – 15 Lenders confirmed
HMO – 13 Lenders confirmedMUFB – Multi-Unit Freehold Block (Flats) - 13 Lenders confirmedServiced Accommodation – 5 Lenders confirmed
Supported Housing – To lease to a supported housing provider – 3 Lenders confirmedSocial Housing - To lease to a social housing provider – 3 Lenders confirmedCommercial – Hotels, B& B;s, Farms – 3 Lenders confirmedBRRR – Buy, Renovate, Refinance, Rent - 20 Tier One Lenders confirmedFlip – Buy, Renovate, Sell - 20 Tier One Lenders confirmedCommercial Conversion - 20 Tier One Lenders confirmedLand/Development – Commercial & residential – 5 Tier One Lenders confirmedTitle Split - 20 Tier One Lenders confirmedAssisted Sale – Agree purchase price with seller – 1 Lender confirmedDeferred Cash Payment - 1 Lender confirmedPortfolio Purchase - 2 Lenders confirmed
Finding affordable financing for agent-sourced and off-market property deals can bring significant challenges for sourcing agents and deal packagers; with the majority of lenders, when they are aware, rejecting applications immediately without a second glance.
This pilot scheme offers sourcing agents, deal packagers and their clients an honest and smoother process to gaining finance and expanding their portfolios.
If you would like more information
To find out more about the pilot scheme and how you can get involved, visit
Or get in touch with the NAPSA Team:Telephone: 01200 411 570
Email:
Tina Walsh
CEO NAPSA
