Whether renting or buying, you’ll most likely need a real estate agent when getting a house. They generally help you do all the legwork necessary to get to the place of your dreams. Due to their duties, they might ask you for certain information. So, can a realtor ask for bank statements?
A realtor can ask your bank statement to see your seriousness or verify your income. But you don’t have to provide it’s not really within the scope of their duties. It’s better to present another document that’ll provide the same information. If you’re giving out your bank statements, redact them.
It’s important to know the duties of your realtors so you can understand the scope of what they can ask you. Here, we discuss whether your realtor can ask for your bank statements and what to do if they should.
Who is a Realtor?
A realtor or real estate agent represents the buyer or seller of a property. Realtors usually have a license to operate and work under a real estate broker. The sole function is to help their client close the deal. In that capacity, the realtor doesn’t need to know your credit score, salary, or bank statements.
But should they ask for it because they want to confirm certain information, you’re within your rights to provide it or decline. The realtor isn’t in the position to ask for documents that prove whether you can afford a property or not.
Duties of the Realtor
Knowing the duties of a realtor can help you determine the kind of information they need to do their job. A realtor or real estate agent is responsible for helping clients buy or sell properties. The duties of the realtor include:
1. Finding Property That Meets the Customer’s Criteria
The realtor’s major role is to use their expertise and market knowledge to help their clients find the right property. Thus, they’ll need to know the kind of property you’re looking for, the price range, the location, and other necessary details which will assist them in recommending suitable properties to you.
2. Scheduling Inspection Times
The realtor is also responsible for taking you to inspect the property. Unless it’s an open house, it’s highly unlikely that any homeowner will allow strangers into their homes even if they’re planning to sell. That’s why the realtor exists to liaise between the buyer and the seller.
Realtors will generally identify properties that meet your requirements and then take you to inspect all these properties to decide which one is right for you.
3. Overseeing Negotiations
The realtor can also be in charge of negotiating between the buyer and the seller. Since both the seller and the buyer may not know each other beforehand, the realtor will connect them and help them negotiate. They can also provide advice to their clients during negotiations to ensure that they make the best decisions.
4. Help Clients Explore Financial Options
Your realtor could also give you financial advice and recommendations on the kind of mortgage, lenders, and other relevant information. In this position, the realtor is only giving advice, and you’re not bound to follow this advice.
Reasons for Asking for Bank Statements
While the realtor shouldn’t be asking you for your bank statements, a few reasons could lead them to ask. These include:
1. To Show Seriousness and Proof of Funds
Some realtors sometimes ask for your financial information to confirm whether you have enough cash to go through with the deal. They could also be asking on behalf of the seller who wants to see a proof of funds letter.
This document proves to the seller that the buyer has enough liquid cash to buy the house. Sellers usually want to see this before deciding to take the property off-market. The bank statement can provide sufficient evidence when a buyer doesn’t have a proof of funds letter.
Even if you’re getting a mortgage, the bank statement could still prove to the seller that you have sufficient down payment, and you’ll qualify for the mortgage to get the property. Of course, it’s not compulsory to show the realtor or seller your bank statement. You can use other documents to prove you can afford the property if you want it. A pre-approval or pre-qualification letter fulfills the same purpose.
2. Verification of Income
If the realtor is the one helping you to process the mortgage, they could also ask you for your bank statements to pass them over to the lender. This doesn’t mean that the lender needs to see your bank statement, as the focus is mostly on your credit score and proof of monthly income.
It’s unlikely that the lender will need a bank statement to verify your income since all they need for this are your pay stubs for the past few months. But if you don’t have pay stubs, your bank statement could serve as your proof of income, and in that case, the realtor may ask for it to pass it to the right person. The right person, in this case, would be the landlord if you’re trying to rent an apartment, or it could be the lender if you’re trying to get a mortgage.
What To Do When Giving Your Bank Statement to The Realtor
When giving out statements to your realtor or anyone, it’s important to filter the kind of information you provide. While the privacy laws generally protect how they use your information, it might be hard to determine whether they comply with the law.
Normally, the realtor should destroy the statement as soon as it has served the sole purpose of verifying income or funds. But you won’t even know if they destroy it. Thus, the best thing is for you to provide only the necessary information that they need to know and redact everything else.
Since deposits are all they need, make sure that’s the only information you provide in any bank statement you’re giving the realtor or anyone.
This prevents your sensitive financial information from getting into the hands of any malicious person who might use that information. In addition, you can easily black out sensitive parts of transactions such as the purpose or party in the transaction and leave out only the date and amount.
Before giving out your bank statement, ask what they need it for and see if you can provide another document that sufficiently offers that information. You need to tell the realtor that you have a confidential and personal transaction that you would prefer not to share.
The realtor shouldn’t be asking for your bank statements. But if they should, you can refuse to provide it if their reason isn’t satisfactory. Even if you choose to, make sure you redact all sensitive information.