Buying back the beneficial interest after BR

tom_w

I was discharged last November, and now I would like to buy back whatever equity there is in my house.

I got an estate agent to provide me with a written valuation - the letter says he would put the property on the market in the region of 90-100k. If I wanted to sell within 1-2 months, then market it at 90-95k, but if there is no rush, then market it at 95-100k for the first two months, with a view to lowering it if no interest.

I sent this to the IS who wrote back with a proposed amount for me to pay, using 95k as the valuation (i.e. mid way between 90-100). In my opinion, 95 is over valuing the property (and 92-93 more realistic for actual sale value), and therefore increasing the amount of money I have to pay.

Are there any guidelines as to how the IS values the property? Should I reply and suggest the value of the property is lower, or will they just say if I want to buy it now (i.e. before the 3 years is up) I have to pay their valuation?

In addition, the IS said that because I have requested to buy back the interest, they will not take 3% off the valuation that would be considered normal selling costs.

Thanks for any thoughts / experiences

Mouse1812

See this and then this - I would then Google "Rule 6.237D" which at 10:

Rule 6.237D(10), provides how the value of the relevant interest is to be determined by reference to the property and not (always) to the unsecured liabilities. Legal advice received by the Service has confirmed that, to comply with Rule 6.237D(10), the amount of the bankrupt's interest, that is the 'charged value', should be calculated taking in to account costs and third party interests, as per the order of deduction detailed in the following table:


Value of property (£X)
Minus
Costs of sale (currently estimated at 3% of £X - see paragraph 13
Minus
Loans or other charges secured against the property
Minus
Value of third party interest e.g. spouse
Equals
Value of bankrupt's interest at the date of the charging order

jamesd

The value on the market is normally higher than the final sale price, on average by around 8% (a long term average for the UK). So by providing those prices you've over-valued the property unless the agents also provided estimated selling prices.

tom_w

Thanks... that what I don't agree with.

I think I will ask the IS to show me the guidelines they have used to arrive at the valuation of £95k, and also not to allow the 3% for cost of sale.

tom_w

Mouse.. just reading your post and the links in more detail. The 3% cost of sale allowance is mentioned where there is a 'charging order'. I dont believe a Charging Order is in place over my property, do you know if this always applied irrespective?

Tks

Mouse1812

I don't "know" that's why I said I would Google "Rule 6.237D" to find out.

The OR goes for a charging order (instead of a sale) if the equity is below a certain figure, the value of the charging order is set by those rules, but are those valuation rules only applicable to charging orders? wouldn't that be an inconsistent application of the law?

I wish I had time to go hunting for you (the question is of interest), unfortunately I now have an unexpected problem of my own to deal with which might keep me away from here for some months.