5 Red Flags When Choosing a Property Sourcing Agent

Five red flags every property investor should watch for

Are you about to hand over thousands of pounds to a property sourcer or deal packager — sometimes before you've even seen the full details of the deal? If that's you, this one's worth ten minutes of your time.

Sourcing and deal packaging are often sold as a low-barrier way into property: no cash, no experience, no problem. But there's a good deal of regulation and required standards around it that isn't widely taught. So agents range from dangerous to genuinely professional, with every level in between - and the due diligence is on you. Get it wrong, and it's you who loses out, often heavily.

Spot even a couple of these red flags and I'd strongly suggest you keep your wallet shut and your cash where it is. Every one of them you can check yourself, free, in about fifteen minutes, and I'll show you how.

1. They're not registered with HMRC for anti-money laundering supervision

Every sourcing agent and deal packager has to register with HMRC for anti-money laundering (AML) supervision, and when they do they're given an AML registration number. A legitimate agent will give you that number without hesitation, you'll often find it in the footer of their website or business documents.

HMRC's estate agency AML guidance now specifically covers property sourcing and deal packaging. So even if an agent tells you they're "only an intermediary," they still have to be registered and meet the standards.

Check it yourself: HMRC Supervised Business Register. It's a little clunky - you download the register and search it in a spreadsheet - but the business should appear, and a good agent will simply hand you their number.

2. They're not registered with a redress scheme

By law they should belong to one of two government-approved redress schemes: The Property Ombudsman or Property Redress (formerly the Property Redress Scheme). To operate outside a scheme is to operate outside the law.

Why it matters to you: these schemes can make awards of up to £25,000 against an agent, and can expel an agent who fails to pay. Without that, your only route if something goes wrong is the small claims court.

Check it yourself: The Property Ombudsman · Property Redress agent finder

3. They're not registered with the ICO

Your agent will handle a lot of your personal and financial data — copies of your passport, driving licence, bank statements. They must be registered with the Information Commissioner's Office (ICO) for data protection.

Put yourself in the picture for a moment: if their systems were hacked and your data taken, wouldn't you want to know they had a clue how it was being stored and kept secure?

Check it yourself: ICO register

4. Big upfront fees before you've seen the deal

Be very wary of pressure to pay large sums before you've seen the full details of a property. This often happens when an agent hasn't actually secured the seller - if they had, they wouldn't be chasing their fee upfront.

Normal sourcing fees are usually due on exchange or completion. A small, documented reservation or registration fee can be perfectly reasonable - but you should know exactly what it is, when it's charged, where it's held, and whether it's refundable. And don't take "it's refundable" at face value: ask under what circumstances, and get it in writing.

5. There are no written terms of business

If the only thing you're asked to sign is an NDA, that's a problem. Proper written terms of business are what keep you safe, they set out how the agent works, what's expected of you, what fees apply and when, where your money is held, and whether it's refundable.

If there are terms, read them, and ask questions about anything you don't understand. It's their contract; they should be able to explain it.

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How to check an agent yourself - free, in about 15 minutes

Every one of these registers is public and free to search. Give yourself fifteen minutes and work through them:

• HMRC AML Supervised Business Register: confirm they're registered for money laundering supervision

• The Property Ombudsman or Property Redress: confirm they belong to a redress scheme

• ICO register: confirm they're registered for data protection

• Companies House: check the company itself

• Social media: search for feedback (including Reddit, Trustpilot, Facebook Groups). Plenty of people tell us afterwards, "I wish I'd checked social media."

Do the due diligence even if someone you trust has recommended them. A reference is not a substitute for checking.

The shortcut - check NAPSA's Agent Directory

If you'd rather not spend the time wondering whether you've checked everything correctly, you can work with a NAPSA-accredited member. Before an agent becomes accredited, we run these five checks - and around fifteen others - on your behalf. You can search our accredited members completely free of charge here: https://napsa.org.uk/sourcers

A credible sourcing agent or deal packager can evidence fit-for-purpose insurance, all of these registrations and a clear fee structure and won't dodge basic questions. If they can't, please walk away. I don't want you to be the next investor who comes to us saying, "Please, can you help, I'm losing tens of thousands of pounds."

Don't trust us. Trust the law — and go and check.

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FAQ

How do I check if a sourcing agent is registered with HMRC? Search the HMRC Supervised Business Register. You'll need to download the register and search it in a spreadsheet. A legitimate agent will also give you their AML registration number if you ask.

What redress scheme should a property sourcer belong to? One of two government-approved schemes: The Property Ombudsman or Property Redress (formerly the Property Redress Scheme). Operating without redress scheme membership is operating outside the law.

Is it normal to pay a sourcing fee upfront? Normal sourcing fees are usually due on exchange or completion - check out our Guide to Sourcing Fees here. A small, documented reservation fee can be reasonable — but large upfront sums before you've seen the full deal are a red flag.

How long does it take to check an agent myself? About fifteen minutes across the public registers (HMRC, redress scheme, ICO), plus a quick look at Companies House and social media.