Aghhhh....Estate Agents and Stamp Duty

phoebe1989seb

I just don't get these greedy vendors BD When we last sold, even though we'd spent a fortune on restoring the house we knew that as a result of foolishly paying over the odds (didn't research the area thoroughly beforehand), we had absolutely no chance of clawing the money back due to a combination of falling prices and the proximity of the SDLT threshold. So we sensibly, rather than attempting to be greedy, priced realistically and accepted our fate.......but we were fortunate in not having a mortgage to repay

Do hope things improve for you.......

Better_Days

Thanks hazyjo and phoebe1989seb for your support. phoebe1989seb, I know you lost out substantially, but at least you recognised what had happened and that recognition permitted you to move on.

There seems to be a lack of realism amongst some vendors atm (although some EA do raise expectations unrealistically as well). What helps is if you can have a sensible conversation with the EA. The one I spoke to this morning about the offer was snitty with me saying 'well it is on at OIEO'. But how many buyers will offer £15k over an OIEO price and over the SDLT threshold to boot?

Yet at the weekend we viewed another property up for £265k. A similar property sold a couple of years ago for £227k and there is a property just down the road (which admittedly needs some work and isn't in such a nice spot) on the market for £199k. I said to the EA that I thought it was over priced. The EA agreed saying that the value is more in the region of £240k. Apparently the vendors sold quickly earlier in the year for £250k, the sale fell through, and they felt they sold at undervalue! They were incredibly lucky to get £250k and yet now they are holding out for near to £265k which beggers belief.

jacobtheamish

I would re offer the 250k putting it in writing, explain that although you feel the house may be worth more than 250k the SDLT makes it impossible for you to offer more. Pop it through the door, also noting that you have informed the agent.

Good luck

hazyjo

Better_Days wrote: »

Apparently the vendors sold quickly earlier in the year for £250k, the sale fell through, and they felt they sold at undervalue! They were incredibly lucky to get £250k and yet now they are holding out for near to £265k which beggers belief.

And I had the house I mentioned on at £265k to start with - then dropped to £250k. Had an offer at £247k which fell through. Absolutely pointless me banging on about that to anyone else who offers as they'll be bidding against Mr Nobody. I had to accept I was lucky that time, but the second time I got an offer was significantly lower (I had also dropped the price to around £244k I seem to remember).

Tell them old offers are irrelevant and you won't be bidding against nobody!

Jx

Yorkie1

Lenders have stopped lending on 'vendor gifted deposits' except for new builds / developer as seller.

The buyer won't get a mortgage but this doesn't stop EAs offering the inducement or buyers thinking it will work out.

£15K F&F is definitely not going to get through HMRC - you're right on that point!

Better_Days

Yorkie1 wrote: »

£15K F&F is definitely not going to get through HMRC - you're right on that point!

EA clearly had a well rehearsed spiel on this, makes me wonder how many buyers have been suckered into his version of reality. He said that he has recently had a deal go through with £8k of F&F (or chattels as I understand the correct term is). It is worth remembering though that HMRC have at least 9 months to review the transaction - and almost certainly will on transactions of this amount for chattels on or very near the SDLT threshold.

Given that there should be there should be a reasonable and sensible appraisal of the second hand value reflecting age and quality of carpets, curtains, blinds, lampshades, plants in pots, free-standing kitchen white goods etc included as chattels, it is difficult to see how the value (on ebay for example) for many properties (and certainly the one I am considering) could achieve £2k let alone £8k.

There does seem to be a bit of a grey area as to what is and what isn't a chattel and I couldn't find a definitive list. There are a couple of factors to consider:
1) How permanently the item is fixed to the property and the extent of likely damage caused if it was removed
2) Whether the item was intended to enhance the property or to be enjoyed in its own right.

For anyone who is interested there was a court case last year - Orsman v HMRC which HMRC won. Orsman paid £250k for a property and £8k for chattels. The chattels included £800 for built in fitted units and worktop in the garage. These were determined to be fixtures rather than chattels by the court.

The court ruled that the units were not chattels as although they were not fixed to the wall they were attached to a worktop which was. Also the units and worktops enhanced the garage as a useful storage and workplace.

The consideration for the property was therefore £250,800 and a further £5,024 SDLT due. Where the purchase price for the property is on the threshold HMRC need only to prove that £1 is not chattels and the consideration for the property tips into the next SDLT band. And of course, HMRC can also charge interest and penalties on top of the unpaid SDLT.

This is potentially very lucrative for HMRC - and reading solicitors websites on the issue there is definitely a theme of 'erring on the side of caution'.

phoebe1989seb

Better_Days wrote: »

Thanks hazyjo and phoebe1989seb for your support. phoebe1989seb, I know you lost out substantially, but at least you recognised what had happened and that recognition permitted you to move on.

.

That's true BD - we never bought intending to sell & make a profit (thinking we'd stay long-term having previously downsized from our family home of ten years) but when we realised the mistake we'd made in moving there, we were sanguine about our situation and felt it better to take the hit (which we were very lucky to be able to afford to do) and get on with our lives.

That area (NE Essex) has still not seen a real upturn in the market and houses that were priced unrealistically then are still languishing on the market two years later (with many vendors being unprepared/unable to accept less), so we know however hard it was we did the right thing......

Edited to add - Regarding the value of chattels, when we sold our family home on the South Coast in 2007, our buyers knew we were downsizing and offered to purchase anything we wanting to be rid of. We sold them several antique light fittings, half a dozen large pieces of furniture, a heavily carved mirror, around a hundred cased taxidermy butterflies plus a few odd pictures etc. They paid us just under £6k - and she was a former London antiques dealer so wouldn't have paid over the odds for such things - so I do think that it would take an awful lot of chattels to reach £8k, let alone £15k!

Oh, and before anyone asks - the house was sold for just under £600k, so not just over a SDLT threshold and despite being a former antiques dealer, she didn't want them to sell on, but kept them in the house :@)

DRP

We just made an offer just over the 250k sd threshold.

Refreshingly, after receiving our offer, the ea took great pains to confirm that the offer included us paying the entire sd amount. Good on him.