Why Use a NAPSA Sourcing Agent to Build Your Property Portfolio
What makes NAPSA sourcing agents different from any other in the market? It all comes down to compliance and credibility...which we check for.
General
Investors
Vs risking losing your hard-earned cash to a non-compliant and unprofessional agent.
We are often asked by property investors what makes a NAPSA Sourcing Agent different to any others that they speak to.
The difference can be quite shocking to investors when we tell them exactly what compliance and business checks we make on all of our sourcing agents, before they become ‘approved’ and searchable on our platform.
Nowhere else in the sourcing sector carries out the level of checks we do on sourcing agents, and we do this with the goal of improving the credibility of our sector and providing investors with a safe space to search and communicate with professional and compliance sourcers.
Tina Walsh – CEO of NAPSA
NAPSA’s core mission is to educate the sourcing sector for the better, build credibility and trust from investors who have either heard bad things about sourcing agents or been burned themselves. We are growing a safe space for investors to search and communicate with approved and credible sourcing agents.
Every single NAPSA sourcing agent who wishes to become ‘approved’ and searchable on our platform, must upload all of their compliance information and documents for our team to review.
These include 25 compliance checks across the below key areas:
Government Approved Property Redress Registrations (either TPO or PRS)
ICO Registration
HMRC Registration
Policies
Contracts (including fees and terms – are these clear)
Legally Required Documents
Data Protection Training
Anti-Money Laundering (AML) Training
We interrogate all documents and registration certificates to make sure they are accurate, meet the national minimum compliance standards and are fit for purpose.
During the registration process, we provide recommendations and guidance for our sourcing agents to make sure they are operating effectively and clearly.
Not only this, we also monitor each of our agents over the year to make sure they stay up to date on their registrations and insurance. If they don’t stay up to date, we stop the sourcing agent from being searchable on our platform.
Only fully compliant and credible sourcing agents are searchable on our platform.
NAPSA Sourcing Agents vs Other Sourcers
For NAPSA agents, their primary goal is to build professional and long-lasting relationships with serious investors. It’s beneficial to both the sourcing agent and investor to connect and work together longer-term, rather than going through the initial process numerous times – a bit like dating!
NAPSA Sourcers want to get to know their investor and their specific investment requirements, so they don’t waste time and make sure to only source deals that are only relevant to that investor.
Professional Sourcers Find An Investor, Then Source Deals
NAPSA sourcing agents find an investor first, build the relationship, and source deals directly for that investor – meeting their pre-discussed requirements.
Unfortunately often through bad training or not understanding how to operate correctly, Non-compliant sourcing agents will find deals first and then send out “great ROI’ advertisements on social media, via email or on a website to attract any investor that’s interested.
This not only breaks FCA rules, it also potentially breaches money laundering regulations.
Investors are much more at risk of working with a sourcing agent who operates in this way, as they do not understand the law, compliance or how to operate a professional and compliant business.
The Compliance Breakdown
It’s important investors carry out their own due diligence on sourcing agents before working with them, at the end of the day it’s your cash that it as risk.
We’ve provided this quick breakdown of the sorts of categories and red flags you should be aware of.
NAPSA Sourcers
Other Sourcers
Full Compliance
✔ Compliant: Meet National Minimum Standards
✘ Compliance unclear. May have property redress, ICO and HMRC registration
Terms of Business Contract
✔ Fit for purpose, including clear guidance on fee structure
✘ One-pager ‘NDA’ agreement with no guidance on fee structure
Money Laundering
✔ Understand AML Responsibilities: Are training and clear on questions to ask an investor for proof and source of funds
✘ Haven’t carried out adequate training and put cash at risk of illegal trading
Companies House
✔ Registered business with SIC code 68310
✘ Registered but often not with the right SIC code (must be 68310)
Insurance
✔ Knows that their insurance policy must cover property sourcing, minimum £100k cover and details and specific work they carry out such as project management
✘ Have insurance but often for ‘estate agency’ and not ‘property sourcing’. This will not protect an investor
ICO Registration
✔ Registered after carrying out Data Protection training
✔ Registered after carrying out Data Protection training
Property Redress Scheme
✔ Registered with one of the two government approved redress schemes (TPO or PRS)
✔ Registered with one of the two government approved redress schemes (TPO or PRS)
HMRC Registration
✔ Registered with HMRC for AML Supervision after carrying out adequate training and completed all compliance criteria
✔ Registered with HMRC for AML Supervision
Local Knowledge
✔ Good local knowledge of sales values, current rentals achievable
✘ Cover all of the UK or have limited knowledge in the area they source
Strategies
✔ Usually focus on up to 5 strategies and understand the legal requirements of each
✘ Say they cover every strategy and show no clear understanding of legal requirements
Resources for Property Investors
We can of course carry out checks and monitor our agents, however it is up to each investor to carry out their own due diligence before handing over any cash to a sourcing agent.
Questions You Should Be Asking Sourcing Agents
We are working on a longer guide for investors to follow, however as a quick list you can use the table above and our top line questions here:
Do they have proof of compliance?
How well do they know your location?
Do they understand your strategies?
Do they seem professional (i.e. not pushy on deals, making sales etc.)
Are their fees and terms clear?
We’ve also provided a couple of guides to help you carry out your own checks before developing a business relationship:
You can find new sourcing agents on our platform, or use the tool to check any agents you are already working with to check they are NAPSA ‘approved’ and operating compliantly.
