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"Chain break" offer from estate agent
scott28tt
Posts: 7 Forumite
Hi, my ex and I split last November and have had our old place on the market since January. We got a buyer, my ex found somewhere smaller that she wanted to buy (I'm renting for the monent and not sure what to do when the house is sold), then last week our buyer pulled out of the sale due to a legal technicality.
We've now been offered a "chain breaker" deal from a local estate agent - not the one we were selling through or that my ex is buying through - they've offered us 90% of the price we had agreed to sell for. They are one of the biggest agents in the area.
My ex has talked about cascading the 10% loss to us down from the top of the chain, so the top house loses say 8k, the next house 16k, and so on - so the chain would still be intact but everyone from us up the chain would be 8k worse off. Neither of us think that those above us would accept this, but they might in order to get the chain complete and be able to move.
Personally I don't think we should accept the 90% deal we've been offered anyway. My ex would be financially better off staying in the house, and I would lose a good percentage of the cash I'd be getting out the the proceeds.
I also think that this agent would only be doing this if they had potential buyers lined up, I can't imagine for a second that they'd want the house on their books for a moment longer than necessary - they make profits by turning properties over on their books - and it is suspicious that they were not at all involved in our sale or my exes purchase. Maybe they have potential buyers on their books looking for the type of house we're selling?
What do you guys think?
We've now been offered a "chain breaker" deal from a local estate agent - not the one we were selling through or that my ex is buying through - they've offered us 90% of the price we had agreed to sell for. They are one of the biggest agents in the area.
My ex has talked about cascading the 10% loss to us down from the top of the chain, so the top house loses say 8k, the next house 16k, and so on - so the chain would still be intact but everyone from us up the chain would be 8k worse off. Neither of us think that those above us would accept this, but they might in order to get the chain complete and be able to move.
Personally I don't think we should accept the 90% deal we've been offered anyway. My ex would be financially better off staying in the house, and I would lose a good percentage of the cash I'd be getting out the the proceeds.
I also think that this agent would only be doing this if they had potential buyers lined up, I can't imagine for a second that they'd want the house on their books for a moment longer than necessary - they make profits by turning properties over on their books - and it is suspicious that they were not at all involved in our sale or my exes purchase. Maybe they have potential buyers on their books looking for the type of house we're selling?
What do you guys think?
0
Comments
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I have never heard of an agent buying a house themselves. Nevertheless it is up to you to decide if you will take a lower offer, as it would be for the other people in the chain.0
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sounds unethical of the EA. I would run a mile.0
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Never heard of this before.
Do you have the offer in writing?0 -
It's certainly strange that you spend so long on the market, but then an agent wants to buy. I agree that normally they would want to flip it, normally a 'below-market value' (if there is any such thing) offer is worse than 90% of asking though.0
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Whitegloves wrote: »sounds unethical of the EA. I would run a mile.
HMRC has a special exemption of stamp duty tax for such "chain breaking" purchases. See http://www.hmrc.gov.uk/sdlt/calculate/reliefs-exemptions.htm#4
Therefore I don't think there is anything unethical, and while perhaps not common it certainly seems to be an established practice.
In any case it is up to OP to decide whether the agent's offer is worth it.0 -
I just realised I never thanked people for replying to this thread - we kept the house on the market, and the third "sale" (the first two fell through) completes tomorrow!0
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