Hi all,

I first posted on here a few months back now with a dilema about accepting a low offer on a property. Since then I've had something of a roller coaster experience so I thought I'd share it.

Started trying to sell a house for £240k in April last year. 2000 built 4 bed house in the East Midlands. That price was perhaps 2 to 5k above what others were asking for similar properties in the same area, but I was prepared to lower it if need be and my house had a nice aspect and was clean and tidy, with a few extras like a conservatory. Over the summer I had very little interest so I started to do three things. 1) Lower the price, by 5k at a time, until viewers and then offers arrived. 2) Sanatised the house, decorated (in magnolia), removed old furniture, put up neutral curtains, etc etc. It was show house central by the time I sold it, having spent about 2k and many many hours of my time. 3) I got a second agent on board. By the autumn I was asking for £200k and had one offer of £190k (the dilema offer). I accepted that, but then the buyer (BTL!) pulled out. Around then the media was starting to report the Northern Rock trouble so I was more desperate to sell than ever. By the end of Nov I'd had two offers - 195k from someone with an incomplete chain (and they still have the same incomplete chain right now) and another at 197k, a complete chain, but a FTB not wanting to actually complete until early Feb. Options weren't looking good.

I then contacted several "we buy your house right now" companies. (you know the ones!). Most offered me prices in the 170's, but one offered 185k. Add to that free legal fees and no agent fees and it pretty much matched the earlier accepted offer, so I grabbed it. Only later did I discover I was actually selling it for £240k with a 55k "discount". The RICS approved valuer arrived and confirmed that 240k was realistic and compared well with other prices in the area, and that was that - property sold at the end of Nov.

The current state is that the house is back on the market again, at £235k, with "no chain" written all over the adverts (but I never had a chain in the first place!). It's now empty, musty, and has weeds in the garden. The other properties I was comparing to have taken between 5k and 10k from their prices but are all still there - they weren't (aren't) as desperate to sell as I was.

But the thing I still haven't grasped is this. Why did the RICS valuer support the £240 valuation when I'd been trying to sell it at £200k up until the week before and hadn't sold it? And how does the company that bought it hope to make anything on it? And what price will be recorded at the land registry for the sale? I don't think I'v been duped (have I?) but I can see that the so called property stats on which everyone relies so much are a complete fabrication in my case. To value a property you have to look at sold prices or asking prices. My sold price isn't what it actually sold for, and asking prices are a long long way away from selling prices.

Comments invited!

I'm confused.

You sold the house for how much exactly? What was the "discount" figure?

Was the RICS guy appointed by the company buying by any chance ?

You're solicitor is duty bound to report the selling price as £185K, if not, report them to the fraud office immediately.

I sold it for £185k - that was the price paid. The paperwork says I sold it at £240k but with a £55k "discount". The paperwork was drawn up by the company's legal dept and the advice I received from my solicitor was that it matters none to me how they want to dress it up. But that's key to their buying strategy. They borrowed funds against a £240k house, and I guess they borrowed a high percentage of that figure, but they only actually paid £185k to me.

Isn't this exactly the same as the well reported BTL apartment buyers who get discounts on what they actually borrow against?

Appointed by the buyer's mortgage company I guess.



Their solicitor, not mine - I think. I queried the lagalities of it all many times with my solicitor and was assured it was up to the buyer and there's no come-back on me.

interesting tale.says it all,there's still some bulls left.which bit of the east mids?Most of it is tanking.To be fair,I wouldn't have rushed to sell in summer 2007 but I would haev done come the NR debacle.
I wouldn't worry it's their loss,not yoursThey probably fancied an esay 20k profit.oh dear........owsabout a 20k loss?

What town was this?

This is quite blatantly fraud. Report them to the police and trading standards. They are trying to have the land registry figure at 240K so some poor sod pays fool price.

If you dont want to report them then put the companies name on this website and someone will !!!!!

This should be a main forum thread in my opinion. I will ask Mods to move it there.

We could probably find the place with the information at hand;

4 bed house in the East Midlands
Sold Nov. 2007 for £240k
On sale now £235k, probably listed on Rightmove with "no chain"

Ok, HPC sleuths the race is on!

Its obvious why the higer price with discount was quoted and Ill eat my hat if that isnt the price that hits the LR. So what will happen now is somebody will check previous price paid see £240k put in £220k offer accepted buyer duped.

I would wait until the price appears on the land registry. If it appears at 240k then report it. if it appears at £185k then there should not be much of a problem - buyer should check the LR?

If I were a betting man....

Anyone found it yet?

The November figures are on the Land Registry now and helpfully Rightmove can sort by price......

It seems to me that there's a good likelihood that they're not all that interested in selling the house, having pocketed the difference between the £185k they paid you and the £200k+ they managed to borrow on the back of the surveyor's £240k valuation? They're probably planning on doing a runner, if they haven't already.

I think the Land Registry is a bit of a red herring here. If there are other comparable properties which are cheaper and better presented than it's difficult to see how an inflated land registry figure will convince someone to pay over the odds for it. More likely that the purchaser is bumping up the value for mortgage purposes, either to avoid having to put down a deposit or because they're going to do a midnight flit with the difference.

To the person who sold the house ...

Do a search at the Land Registry and find out if the buyer obtained a mortgage on the property to buy it from you. If they did and the mortgage is for more than they paid you, contact the lender and ask them if they knew they had given a more than 100% mortgage on the property.

If the buyer's solicitor reported to the lender that the buyer was paying 240k for the property knowing they were actually paying 185k, thereby duping the lender, the buyer and buyer's solicitor (in particular) are in deep shite. The buyer's solicitor would be reported to the Law Society and he would be booted out and lose his livelihood.

Otherwise it's a good scam. Give you 185k and tell the Land Registry they paid 240k. When they sell it to some mug for 210k they'll have made 25k of easy (very easy) money and the mug who buys it will think he has a bargain. Smart barstewards but what they are doing is fraud and it is rigging the housing market. REPORT them, they have mugged you over nicely.

Nah, the terms of the BTL loan they bought it under will state that the max LTV will be 85 ish percent. Which typically means the 'investor' should pay a 15% deposit. However, if the surveyor 'values' is 240, and they borrow 185, they are only borrowing 77%. The bank assuemes that they have put in 15%, but the reality is that the house has been bought with the 'investor' putting no money down.

No subprime in the UK and all that.........

In reply to several of the above posts ...

It's not on the land regsitry yet - I guess the solicitors didn't send it all through until Christmas or possibly even this year. I will keep checking for it.

I don't think I can get details of what the mortgage percentage is, can I? Nor can I identify the mortgage company.

It's now up for sale at about the same as other houses which are similar. It's hard to call as no two houses are identical. Variation would be 5 to 10k either way I reckon, and that's the difference here (240k last April to 235k now) and on the ones I'm comparing it to (about 235k then, and about 230k now)

And sorry guys, but I'm not identifying the property - just in case there's some come back . If you find it then that's your guess, but please do me a favour and don't identify it on here. I wanted to post the story as I think it says a lot about what's happening out there, but please don't land me in the crap.

Three unanswered questions -

1) What was the valuer doing approving the 240k? Are they negligant?
2) The company knew I'd been trying to sell it at 200k without success. They've either pocketed the difference and legged it (limited company, so who carries the can?), or they're denying the crash and hoping to turn it this spring. What's their business plan?
3) Isn't this exactly what BTL'ers have been doing with new build aflats all over the land?

How will you land in the crap?

What a cop out. At one point there were over 80 people reading this thread, all hoping to see some justice done on the fraudsters who've wrecked the economy. You could do something about this, but instead you're colluding with them.

Stop wasting our time.

Im with the OP, he obviously is worried about any comeback. i would be too. Personally, id wait 6 months, move and then land them in it. Then there'd be no comeback. What they are doing is illegal and the OP should never have agreed to it but that's life. Im surprised they think they can sell it at a profit when you had such a problem finding a buyer so im guessing it's dodgy somehow...and dodgy people dont like being f**ked over...keep your knee caps mate and shop them later in the day when they wont know who did it. But do us all a favour and DO shop them.

Ditto, spent half an hour searching rightmove before realising it was pointless. This could have been a clasic.

Damo

I'm starting to think it was a wind up.

Did you have your own solicitor involved in the selling process?
If so, then this would be the fault of your solicitor for not highlighting this issue and therefore seems highly unlikely you will get any come back.
The truth will always come out, and you should do the right thing instead of waiting to see if it will come back to bite you in the ****.
If ever there was an investigation into the said company which with the way things are going seems highly likely, then you need to make sure that you can prove that you at least complained to the company or had the matter investigated.
Otherwise they may suspect you of being in with the scam due to you being a desperate seller and would of done anything to get rid of the property.


Plan for the worst hope for the best i say, protect yourself as cgano says!!

Loz

In any event it is simple to find the mortgagee. A £3 office copy of the register [available online] will show the mortgagee in the charges register. It is very unlikely that the sale would not yet be registered as i would imagine the mortgagees would be chasing for confirmation of the registration of the charge.

i may have to get my troll rifle out of the cupboard.

Which part of "It's not on the land registry yet, I've checked" don't you understand? I will keep checking the Land registry, and if 240k is reported when it is listed then I'll contact them and point out the error. Until it is reported then there's no fraud or illegalities to it - it's just anecdotal and speculation. But please be assured, last summer was extremely stressful for me going through all this, and I certainly am not winding you up!

Nobody has answered the BTL inflated prices on flats comparison. Isn't this exactly what loads of house builders and investment buyers have been doing for years? As recently reported in the media? The "sold price" at the LR and the price which the mortgage company lend against doesn't equate to the actual amount of money which changes hands, and the difference is referred to as a "discount".

I don't quite see what's in it for the purchaser - they need the market to start rising again, or they'l default on the mortgage and walk away with the difference. But the parts of the process where this all goes horribly wrong are 1) The valuer didn't do any homework - they were asked to value a house and surprise surprise they said it's worth exactly what they were told it was being sold for. What kind of valuation is that? It's a nonsense. The valuation is supposed to protect the mortgage company but the valuers aren't doing that. 2) the LR recorded price, when it is recorded, should be the actual price paid - but that isn't the case in the BTL flats which have hit the headlines. So my point is that the whole process of valuing a house is flawed and therefore this crash is going to be a big one. In my case it was 23% but I was helped by other sellers refusing to lower their prices along with me. Once everyone starts lowering prices it only gets worse.

Chill out TTS,dont stress about it.What you did was sell your house.I presume your solicitor wouldn't have allowed you to do anything illegal so you'll be fine.Most people in your positin would have doen the same.

You are right,these activities have been carried out on a grand scale by developers.If they don't get prosecuted then...well............no point getting worked up about it.

In what sense? OP was delighted to shift his house in a falling market.



What did OP do wrong? All he did was to sell his house at a price he thought was fair. He had no contract with the surveyor. He didn't even have any entitlement to see the surveyor's report.



I'd say they are in it so deeply that the rest of it is pretty irrelevant.

A good number of properties NEVER actually appear on the land registry.
This could be a likely event if the buyers are dodgy, so it may be a waste of time searching.
For those of you who say that ALL sold properties HAVE to appear, I know of several that I have searched for that simply did not get listed! These include a flat I rented in 2003 that was sold and was never listed, properties in a new development nearby were sold between 2004 and 2005 but never listed and I am sure that if I try I can think of other examples of fruitless searches of the land registry.

Hi

The easiest way to get them would be to report it to the Inland Revenue. If the Land Registry dont show the drop then it probably wouldnt have been declared on the Stamp Duty Return at the right figure either.

As a wise (but slightly dodgy) friend with her own business once said, lie to the bank, lie to anyone but never, ever diddle the taxman. He will hunt you down.

Not that I diddle anyone anyway, Im the sort of person who feels guilty going through the green channel at customs when I know damn well I have nothing to declare!

For what? For paying stamp on 240k instead of 180k???

HMRC aren't going to send them to jail for paying too much tax. The biggest benefit is to taxpayers if they did overpay sdlt.

Sorry, a bit of a mental moment there, although it is still fraud!

I can confirm this also. My better half sold her place in Worthing and got the highest price on the street by a fair whack (although it was a wonderful place) to private buyers back in 2006 and it's not in any of the "sold prices" websites. Not sure if it's on the actual LR as I haven't bothered to check. Maybe some kind of IT problem?

Not necessarily. Potentially it may be fraud; potentially it may not.

You're boring me now. If I posted a calculator to you to work out how you're going to get out of negative equity would you go away?

Don't read it then...

If I go into negative equity, I shall send you a case of champagne. Bollinger 1985.

In answer to Paddles on another thread. You have no evidence whatsoever that fraud is involved.

We don't know whether OP is telling the truth - it has been suggested that he is on a wind-up mission.

We don't know how OP got hold of the surveyor's report. Very unusual indeed. Try asking a surveyor for a copy of the report next time you sell. You won't get it. And it really doesn't sound like the sort of purchaser who could be asked for a copy, does it?

Assuming the transaction went through at the higher price, we still don't know that fraud was involved. It is not fraud to pay too much SDLT. It is not fraud to have a higher price on the land registry than the property is *worth*. The LR is not a source of VALUATIONS. It is a source of TRANSACTION amounts. The two are completely separate and two persons are at liberty to trade items at whatever value they like.

If the valuation was used to raise a mortgage, without being honest about the 'cashback' then yes, it would indeed be fraud.


On the evidence given we are not in a position to comment on whether or not this is fraud.

I don't know if you have ever seen a Land Transaction Return, but it is very thorough. It asks exactly how much consideration in money or money's worth has changed hands. It lists the various options and you have to declare exactly what the transaction was made up of. Apparently the information goes to many, many different departments at the IR. It may not be wrong to pay too much SDLT but you sign the Land Transaction Return declaring the contents to be true. The IR may not care if they are benefiting, but it is still making a false disclosure on the form.

I have, although you are far more familiar with them than I am. I still contend that it is acceptable for two parties to agree how the transaction is structured - obviously provided the disclosures are correct.

Again, we are not party to the information in the return form.

Tell me, if you conveyance a new-build for a client, and carpets are 'thrown in', do you adjust the consideration on the SDLT form to make up for it?


If I had bought a 'distressed' property and hoped to make a profit on it, I'd be prepared to pay quite a lot for the benefit of the LR showing a higher price. And what has trading standards got to do with this? Nothing. It's not a number that will be disclosed to the eventual buyer - although his own research may well turn it up.

I didn't get the report, and therefore I have no idea what the actual valuation said. Nor do I know how much money was borrowed against the house. However, I do know that the surveyor was fully under the impression that they were being asked to value a house which was being sold at £240k. I showed the surveyor round, made them a welcoming cup of tea, and had a general chat about what they were there for, what they would be looking at, etc etc. We discussed the weather, we discussed their extendable folding ladder, we discussed their shiney mercedes parked outside, and we had a one sided discussion about the house they were valuing. I asked them vague questions like "Does this house compare well with the others which are for sale on this estate?" and "Is the sale price realistic?". The surveyor quoted the £240k purchase price from their paperwork and I didn't correct them. The surveyor had also been told that I was a tennant - I didn't confirm or deny that one either. The surveyor was generally quite lazy, but very chatty - I mean, if I was a tennant showing them around, surely the sale price was confidential? Then again, a half decent surveyor would have known that the same house had been up for sale until about a week earlier with a 200k asking price.

I've bought three houses so far, and in every case the "homebuyers valuation report" has exactly matched the same price as I was buying at. This time I was the seller, but I reckon the same thing happened. It's easy money right? "I'm buying a house for X, can you value it please?" "Yes, certainly. It's worth X. Will you pay me a large fee now please?" "yes, there you go". Isn't that how lazy peope make money and housing booms are created?

Carpet would count as fixtures and fittings and would not be considered part of the consideration. However if I buy a house for say £249,000 with £5,000 for fixtures and fittings I would expect to have to justify to the Inland Revenue exactly how that amount is broken down.

But reducing actual consideration paid in order to evade SDLT is a very different proposition to agreeing a sale price of 240 and some sort of a cashback of 60. (or whatever the figures were).

And anyway, carpets are NOT fixtures and fittings. You are wrong. They are chattels. SDLT is not due on the transfer of tangible moveable property and if you fail to point that out to your clients I am sure they will not be happy! The only reason to have them for 'free' is to be economical with the truth provided to the mortgage company - which I am sure you also point out to your clients.

Depends on how you describe fixtures and fittings I suppose. The Law Society Fixtures and Fittings Questionnaire has them described at such. There is very little difference between chattels and fixtures and fittings, it is just wording.

The carpets probably only cost the developments peanuts, the lender isnt particularly worried about them to be honest. If there is a box asking what "Benefits" are being offered I would list them as well as every other item that is included in the purchase price.

The developers arent doing it to lie to mortgage companies, they are doing it to sweeten up buyers, it is totally different. You cannot compare free carpets and curtains with substantial "allowances" "cashbacks" or what ever wording the developer chooses to use.

Anyway Im not getting into any protracted discussions over this, sorry

I don't need to tell you that the Stamp Office will disagree with that statement. There is a difference between land and tangible moveable property - SDLT is due on the former, but not the latter.

The Law Society list is there to help property buyers ensure what is included in a property; not to interpret the law.

Right, last post on this. In conveyancing practice they are used to mean the same thing. The property is one thing, the fixtures and fittings (otherwise known as chattels) is another. You pay tax on the property not on the chattels (otherwise known as the fixtures and fittings). This may not be 100% right in the true legal meaning of the words but if I exchange Contracts and tell the otherside the price is 250k for the property and 10k for the fixtures and fittings they know exactly what I mean. This is how we refer to it. I have never had a solicitor say to me "actually I think the correct term for the items that are being purchased are chattels". He would be within his rights to, but he would be a k***.

The stamp office wouldnt care because they would ask what the items were, I would list carpets, curtains etc. and they would say they are moveable and so not liable for SDLT.

Just as the tax shouldn't be described at Stamp Duty anymore as it is now Stamp Duty Land Tax, we use different words but know what each other are talking about. I wouldn't dream of correcting another solicitor for saying "Stamp Duty" as I would be a k*** myself. In fact should it even be called the "Stamp Office" anymore when documents are no longer stamped.

Stop being petty.

What about Capital gains Tax

If they bought for 240, sell for 200 thats 18% extra on 40,000

I wonder whether you're right. And as iirc (sorry, cannot be bothered to check) it was bought through a company, that is 20% to 28%.

Sorry, don't quite understand. Surely that is £40,000 loss so no capital gains applies.

That's the point. For tax purposes it is not a profit.

This of course would be utterly deceitful and the perpetrator of this would be likely to end up in jail. But he would have clear evidence of having paid 240k for the property.

So if he sells it for 240k, no tax to pay on the profit.

If he sells it for 200k, then he has a "capital loss" to offset against a gain he has made on a different property.