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The private market

Proof of funds and the NDA

The two documents that separate buyers who see houses from buyers who see listings, and how to handle each without giving anything away.

The private market7 min read
Proof of funds and the NDA

Two pieces of paper decide whether a private seller will show you the house. One proves you can pay for it. The other promises you will not talk about it. Buyers who resent them stay on the portals; buyers who understand them are the ones the blind listings are written for.

Evidence of funds

What the seller wants to know is simple: is the money real and is it available. What they do not want, and what a good desk never asks for, is your net worth. Evidence of funds is a statement that the amount required for this purchase exists and can be called on. It is not a balance sheet.

A bank letter
One paragraph on the bank's paper confirming that funds of at least the amount are held and available. The most common form and the one private banks produce within a day.
A statement
A recent statement with the balance visible and the transactions redacted. Acceptable to most agents, less elegant.
A wealth manager's confirmation
For buyers whose money is in securities rather than cash: a letter confirming that liquid assets of the amount are under management and can be realised. Increasingly the norm above ten million.
A mortgage in principle
Where the purchase will be financed: the bank's indication plus evidence of the equity. Weaker than cash, because the seller now depends on a second decision.

Date it within a month. Address it to the desk or the agent, not to the seller. Give the amount as at least the budget, not exactly the budget, so that nothing is revealed about the walk-away number. And produce it within forty-eight hours of being asked, because the speed is part of the evidence.

The non-disclosure agreement

A blind listing is a house whose address, photographs and owner are withheld until the buyer signs a non-disclosure agreement. The agreement is usually short: the buyer will not disclose the property, the price or the seller's identity, will not approach the seller or their staff directly, and will not use the information for any purpose other than the possible purchase. Some add a non-circumvention clause, which stops the buyer from going round the agent, and a term of one or two years.

Sign it. Have your lawyer read it if it runs to more than two pages, but sign it the same day it arrives, because the seller's adviser is timing you. The NDA protects the seller, not the agent, and a buyer who negotiates it is telling the seller that they are not sure they want to be discreet.

Nobody has ever lost a house by signing an NDA too quickly. Several have lost one by reviewing it for a week.

The desk

What not to sign

  • An exclusivity that binds you to one agent for all purchases in a market. Exclusivity for one house, for a period, is normal; exclusivity for a market is not.
  • A fee agreement disguised as an NDA. Read the last paragraph; the fee, if any, belongs in a separate letter.
  • A clause that transfers your evidence of funds to the seller. The seller is entitled to the confirmation, not the document.
  • Anything that names a price you have not agreed to. An NDA is about silence, not about money.

The order of events

1
Mandate registered and the buyer qualified once, with the desk
2
A house fits; the desk describes it without the address
3
NDA signed, same day; evidence of funds shown, within forty-eight hours
4
The address, the plans and the visit, in person, with the desk

It reads as ceremony. It is the opposite: it is the mechanism by which a seller who does not want to be seen selling can sell at all, and buyers who master it see houses that do not otherwise exist.

Run the numbers

Off-Market Readiness

Ten questions that decide whether a private seller will show you the house.

Open the instrument

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