Foul Play/case for legal action

badaz52

I'm wondering if someone might be able to provide me with some advise on whether we would have a case to take legal action against TW Homes. We have now moved into our new home and took advantage of their PX scheme but it was a very messy affair at times and a number of interesting facts have come to light since we moved.

Our old house was on the market at £165,000 with a local EA. TW offered us £150,000 in a PX on one site that we later changed our mind on and then on the second site we opted for a slightly cheaper house so they dropped their offer to £140,000. After some thought we decided to accept this offer.

Now here is the interesting part, it has come to light that the occupant of our old home is one of the original viewers of the property when it was marketed at £165,000. She viewed it twice and was extremely keen. At this point we were going through the PX process but nothing had been decided just yet.

My understanding of a PX deal is you agree to "sell" the key word here being "sell" on completion of your new home, your old one to the developer for the agreed price. In the PX documentation we were told they would market our old property at £140,000 which we assumed would be after we moved. It turns out they dropped the house price to £140,000 while we were still in it and sold it to one of the buyers who already had a lodged interest with the EA for that price.

After the lady had viewed our house for £165,000 the second time there was a long period of no contact, the next thing we know the house has been dropped in value without informing us. The PX price is usually lower as you are selling it to the developer and they have to get rid of it. What they actually did is not give us a PX at all but instead sold our house for a cut price to a buyer that was already lined up without informing us that this was their intention.

Surely up until completion it was our house and they had no right to contact the EA and lower the asking price? I thought a PX was an "if all else fails deal"? until completion which was the 30/08/11 we owned the house, yet no effort was made to achieve a higher price? and we were not given a choice? it is clear the prospective buyer was contacted either by the developer or the EA informing them if they waited they could get the house for less even though we did not agree to these terms. We agreed only to accept £140,000 as a PX to sell the house to the developer on completion not lower the advertised price months before hand.

To me this smacks of foul play, based on 3 valuations from local EA's and TW's own surveyors who said the projected selling price is £150,000-£155,000. A difference of 10 to 15,000 more than what they offered us.

Something definately stinks but I'm unsure whether this is a legal issue to be taken up with TW or the EA?

What do you think?

WestonDave

There is absolutely nothing preventing me picking any house on sale in an estate agents, and putting it on sale elsewhere on the understanding that it is only actually available if I manage to buy it first! That is all they have done. You got a deal you were happy with at the time. Selling things before you buy them is fairly common practice in all sorts of sphere's where some form of broker is involved. If they've given you £140k for it, and sold it on for £140k they haven't gained from it - merely guaranteed themselves a quick sale.

I realise it is frustrating but I'm not convinced they've done anything wrong.

silvercar

I think you have misunderstood what part exchange means.

Once you exchange contracts, that means that you agree that (on completion day) you buy the new house and TW own your old house. You agreed this when you signed the contract and contracts were exchanged.

Standard practice for builders to sell your house on for cheaper than they agree with you, in order to shift it quickly. Into the price they have agreed for the new and for the old they will factor in their costs and how quickly they can sell on and for what price. This is really of no concern to you, you should just make sure you are happy with the deal you are getting.

I'm surprised you are complaining that TW sold it too cheap. The complaint would be if you sold it to TW for 140k and they sold it for 160k, thereby pocketing 20k + the money they made on the new build. Also, the lady that viewed at 165k but didn't offer may have thought it overpriced and only became interested again when the price was reduced.
You could have reduced to 140k, sold quickly and then been in a good negotiating position with TW, but you decided to do the part-ex, because it was a deal that suited you.

dotchas

Quote "It turns out they dropped the house price to £140,000 while we were still in it and sold it to one of the buyers who already had a lodged interest with the EA for that price."

How do you know this?
You accepted their PX offer of £140K , you could have opted to keep marketing the property and reduce the price.
PX is not always (very rarely) the best way to go but it makes a less risky/stressful experience with no chain involved. I guess it comes down to what value for peace of mind.

badaz52

We agreed to a PX of £140,000 yes but what gives them the power while you still own it and live in it to market it for that price? it could be months before your new house is completed and you still own the old house yet they are just selling it cheap and not giving you a chance to see if it sells in the meantime at the original price.

They also used our EA too so we had no choice on whether we wanted to wait for a better offer or else accept their PX.

I know it was marketed for £140,000 while we were still in it because I came across an old ad for it on right move.

Like I said up until completion we owned the house and agreed to sell it to TW for £140,000 we did not agree for them to market it at a reduced price while we were still in it.

The only thing is I don't know how much they did actually sell it on for, how can I find out? sold house prices usually appear on right move but only after a while.

WestonDave

You can't find out until they are at the Land Registry which will take at least a month after completion - I think Rightmove updates their system once a month so probably after a couple of months it will be on there. If you want to sue you have 6 years from the point at which you discover a potential reason to claim so there is no rush, but you'd need to show you lost out in someway. If it sold for £140k (which if it was being marketed for that is the likely maximum) you will find it virtually impossible that you suffered financial loss so you'll need to forget about it. Far better to do that now and enjoy your house than keep eating yourself up over a whatif that you'd not have been bothered about but for some strange timings.

CapJ

I am not up to speed on this area but wouldn't this have been a conflict of interest on the part of the EA? Especially if any information was passed to builder about buyers, or prospective buyer was told about 2nd option for the house? Also where did the builder get the photos to market the house? From EA? Smells funny to me, but I can't see the builder has done anything wrong!

badaz52

I appreciate your help, thanks. I agree with what your saying it's just TW were very pushy at times and gave us no incentives to move. We thought they would pay our legal fees as part of the PX but they only paid the EA fees so like I said it was a messy PX and it has left us a little frustrated.

Would I be right then in saying the house would have been sold twice when the information is updated? we sold to TW, so they were the buyer and then they sold it to a private buyer, although this happened within a day, we completed on the 30/08, the lady completed on the 31/08.

badaz52

CapJ wrote: »

I am not up to speed on this area but wouldn't this have been a conflict of interest on the part of the EA? Especially if any information was passed to builder about buyers, or prospective buyer was told about 2nd option for the house? Also where did the builder get the photos to market the house? From EA? Smells funny to me, but I can't see the builder has done anything wrong!

I would have thought so yes, the EA did not keep us informed of anything once TW came into the equation but they were still marketing OUR HOUSE! which seesms crazy. Like you say maybe the builder has done nothing wrong but on the surface it seems like the EA has done us out of a better deal possibly by passing information on before anything was completely agreed.

It's strange that we get the same lady viewing twice then we contact the EA and he says he hasn't heard anything and she hasn't made an offer next thing we know she has bought the house after all but at £25k less.

Fact is the builder has used a buyer that was introduced to the property by our EA to sell it for a cut price knowing full well that they could have got more for it and that really doesn't sit well with me. Whether anything can be done about it is another matter lol.

In terms of legalities, did the EA do wrong if they passed information on about prospective buyers in the pipeline to the builder.

wastedtalent

Sounds like if anyone's done anything wrong its the EA, have you spoken to the lady?

DannyboyMidlands

Let it go. You handed the control of the sale to TW who sold it for a price that you agreed. I don't see the problem. So what if somebody bought it who had previously viewed at £165k? It was overpriced at that level anyway or you would have presumably sold it rather than px.

If you wanted to retain control or sell it for more than £140k then you should have done so.