homes under the hammer??

Premier_2

There was one about a week ago where they showed the property and some guy bought it at auction.

When they came to refilm it a couple of months later, it transpired he had lost the property since he couldn't complete within the 28 days (mortgage problems) and they weren't given permission to go back inside the property to film it. Obviously he lost a lot of money (not least the 10% deposit paid on the auction day)

But in the meantime, the guy had bought a completely different property so they filmed that instead, but of course they hadn't any film of what it looked like before he bought it. A bit of a waste of time really, other than it showed that if you are investing, don't expect every transaction to be a winner.

That's also the message that is being put out on the Million Dollar Traders programme on Mondays, BBC2 (nothing to do with property, it involves trading shares)

besonders1

I saw that one as well, the second property he bought was given a low valuation by one of the estate agents and he was annoyed as he lost quite a large sum of money from the first non-completion. I also am amazed at how these people would want to be shown on TV and it also makes the shows look bad but then again, those which have lost out would probably need the extra cash to pay off their negative profit.

poppysarah

I saw that one too - is it a great way to lose a deposit or what? Is it a great tax scam? Does the seller keep the deposit and have to declare it as income?

Premier_2

poppysarah wrote: »

I saw that one too - is it a great way to lose a deposit or what? Is it a great tax scam? Does the seller keep the deposit and have to declare it as income?

No tax due on a persons primary residential property. If not a primary residence it's not income, it's capital gains. Not sure if or how that applies in the case of not having disposed of the property. Anyway theres a £9k+ annual exemption

If I remember correctly, the seller just decided to keep the deposit as per the contract (the buyer said they had the money available on day 29, but was too late) and kept the property too - decided not to sell at all.

poppysarah

Premier wrote: »

No tax due on a persons primary residential property. If not a primary residence it's not income, it's capital gains. Not sure if or how that applies in the case of not having disposed of the property. Anyway theres a £9k+ annual exemption

If I remember correctly, the seller just decided to keep the deposit as per the contract (the buyer said they had the money available on day 29, but was too late) and kept the property too - decided not to sell at all.

And then it's an expense if it was from a business ... but sort of withdrawing money from a business and giving it to someone without incurring person tax...

Premier_2

poppysarah wrote: »

And then it's an expense if it was from a business ... but sort of withdrawing money from a business and giving it to someone without incurring person tax...

I don't know what you mean

There was no suggestion that this was any kind of business. Sounds like it would be a doomed one if the seller refuse to sell their stock.

I think it was simply someone wishing to sell their property ... and latern changing their mind. The buyer fell foul of the purchase contract he signed and paid the consequences.

spuds_2

I have noticed more recently that the May/June 08 programmes have quite often had projects that when revalued after refurbishment have only broken even or made a small profit. The profit on houses is made when you buy, not when you sell - I suspect that many small developers buying last summer will now have houses worth less than they paid.

This is a bit similar to what you get on Property Ladder where Beeney ends up saying, "If you hadn't done anything to it, the house would still have gone up 15%". Well not anymore...

Premier_2

spuds wrote: »

... I suspect that many small developers buying last summer will now have houses worth less than they paid....

They may have if they've not actually done any property development and just rode the market.

As you say Ms Beeney has been ranting on about this for ages.

If you don't add value, then you are at the mercy of the market. Too many so called property developers didn't add value but were convinced that as they made a profit they must be a good property developer, perhaps because they spent 6 months doing something to the property, but not actually adding value. Wrong, they just got lucky on an investment transaction.

Unfortunately the value of an investment can go down as well as up ... and at present everyone knows its going down.

However a good property developer adds value, and that is the real profit. As long as the value added exceeds the drop in value due to market conditions (probably about 7-8% based on annual loss of 15%), then they should still turn a profit. If added value is not 7-8%, then they shouldn't have bothered in the first place (again as Ms Beeney would tell anyone)

TTMCMschine

hethmar wrote: »

Id have thought most people who made a c*ck up would refuse to allow themselves to be shown on the box. You get a contract to sign at the end of filming to allow it and if it were me Id not sign.

I thought they signed at the beginning (always the way i've seen it). For the very reason you have mentioned. It takes extra days filming on the days after, if you can easily turn round and waste their time by changing your mind then that's not very clever of them. Believe me - it works in their favour, not yours. Remember most of these things filmed have been during a property boom so you'd be bound to see money making stories., now it's all going pear shaped.

poppysarah

Premier wrote: »

I don't know what you mean

There was no suggestion that this was any kind of business. Sounds like it would be a doomed one if the seller refuse to sell their stock..

It was just a strange idea I had that it'd be a good scam to set up if you were clever. My DH also thinks I'm mad for thinking it's a scheming scam.