Bovis homes part exchange tactics

Swizz

In January this year we agreed to part exchange a rental property we owned.Survey was done, offer made and accepted.solicitors instructed, contracts drawn up. We were purchasing a new Bovis home, we didn't need a mortgage.

Four days before completion, even though they had done a survey 2 months previously, we had a Sunday afternoon phone call from the site sales manager saying they had sent a building firm around, and had now decided the house needed £20k work doing to it before they could sell it, but that they would pay half and we only needed to drop by £10k. Feeling pressured and worried that they must have found something bad, we felt we had to agree, and four days later it completed, now with us having to pay £10k more.

Within three days of the house going on the market, they had had an offer for the property, they hadn't done any work on it, and sold for the original offer price. The new purchaser had a survey, and we assume found nothing to stop the sale, as it all completed.

We are furious that they made us pay more by falsely saying the needed to do work on the house. Basically they lied.

Can we do anything about this?

tim123456789

Swizz wrote: »

In January this year we agreed to part exchange a rental property we owned.Survey was done, offer made and accepted.solicitors instructed, contracts drawn up. We were purchasing a new Bovis home, we didn't need a mortgage.

Four days before completion, even though they had done a survey 2 months previously, we had a Sunday afternoon phone call from the site sales manager saying they had sent a building firm around, and had now decided the house needed £20k work doing to it before they could sell it, but that they would pay half and we only needed to drop by £10k. Feeling pressured and worried that they must have found something bad, we felt we had to agree, and four days later it completed, now with us having to pay £10k more.

Within three days of the house going on the market, they had had an offer for the property, they hadn't done any work on it, and sold for the original offer price. The new purchaser had a survey, and we assume found nothing to stop the sale, as it all completed.

We are furious that they made us pay more by falsely saying the needed to do work on the house. Basically they lied.

Can we do anything about this?

This seems to me to be an offence under "The Consumer Protection from Unfair Trading Regulations 2008"

If you have actual real evidence of what was said then take a visit to you local trading standard dept. You will probably need to push them very hard as this is new legislation that doesn't have much case law (if any) and you don't fit into any of the example cases,

tim

Swizz

We have written to Bovis complaining about their tactics with our part exchange. They produced a time line of their surveys on our p/ex house..and by their own admission, took two weeks to inform us of their perceived problems with our house, waiting until 4 days before completion to negotiate the price down. In our opinion this was manipulating the time frame to gain unjust enrichment. By leaving it so late, we had psychologically committed to the transaction completing. In the event, they sold the house for the amount originally agreed, so they have gained £10k. They also did no work on it. We feel they have misrepresented the situation in order to massage the sale through. We do not disagree with the surveys or the premise that they were able to negotiate the price down if they felt it warranted. Our objection is that they left it deliberately to the eleventh hour.
We would like to take this further, but we're not sure of the legal voracity of our contention . We feel they have used unfair trading methods, but can we take them to the small claims court?
Any help would be gratefully received.

gazter

Swizz wrote: »

We have written to Bovis complaining about their tactics with our part exchange. They produced a time line of their surveys on our p/ex house..and by their own admission, took two weeks to inform us of their perceived problems with our house, waiting until 4 days before completion to negotiate the price down. In our opinion this was manipulating the time frame to gain unjust enrichment. By leaving it so late, we had psychologically committed to the transaction completing. In the event, they sold the house for the amount originally agreed, so they have gained £10k. They also did no work on it. We feel they have misrepresented the situation in order to massage the sale through. We do not disagree with the surveys or the premise that they were able to negotiate the price down if they felt it warranted. Our objection is that they left it deliberately to the eleventh hour.
We would like to take this further, but we're not sure of the legal voracity of our contention . We feel they have used unfair trading methods, but can we take them to the small claims court?
Any help would be gratefully received.

It is most certainly shoddy practice (assuming the work didnt need doing). Businesses like theirs rely on a lot of good faith from people. They tend to by hyper sensitive about bad publicity. I would be speaking to a journalist at a local newspaper. This is a juicy story.

BargainMad_3

I presume you have double checked the exact price paid by the new owners of your old home on a website like Zoopla.

This has the advantage of showing the completion date as well.

The kind of tactics you describe are very common with quick purchase companies who do indeed wait until the 11th hour to drop a previous offer. They do this because they know the sellers are already desperate to sell and can ratchet up the pressure. Complaints are rife about companies like this, particularly as there is no formal regulation over any of these tactics!

However your case is entirely different and falls within the Part Exchange plans offered by all the big builders like Bovis. The purchase of your existing house is part and parcel of a delicate negotiation to purchase a new (more expensive) property from them.

Generally speaking the builder will obtain 2 valuations but will eventually offer what they think the property will actually SELL for and not what they believe they can ASK for it. Therefore these valuations are guides and not exacts. And remember they are looking to sell as quickly as possible, impacting the sales price. The sellers of the existing property are usually swayed by the fact that there are no estate agent fees (several thousand pounds) and there are usually additional sweeteners with solicitors fees etc. And above all none of the hassle of selling a property.

Now Bovis might have thought the actual sales price was going to be 10k less than the advertised price. If they got the asking price then that is a massive bonus for them, at your expense, and you are right to feel aggrieved. You can of course check this with Zoopla.

But it might also be that Bovis were prepared to accept an offer of 10k - 20k less than the asking price, and anticipated this within their final offer to you.

Also did you receive any other incentives from Bovis at the new property e.g. a discount on that price or new appliances or enhancements to fixtures and fittings. If you did it will also be difficult to disaggregate these from the "whole package" negotiation of your part exchange property.

But either way this might be worth running past a free advice session with a solicitor to gain their opinion.

noh

Four days before completion?
Or 4 days before exchange of contracts?

Swizz

This was four days before completion..exchange and completion on same day. I know exactly how much they got for our property, 169,950. They agreed initially to give us £170k, only reducing it after all the conveyancing had been done etc, as we were about to complete.ie 4 days before. They had been getting quotes for the work they said would need to be done, but at no time gave us any indication there could be a problem. At the time of the original homebuyers survey, the site saleswoman told us the survey wasn't brilliant, but that not to worry, they were going with it. Six weeks later they sent in a building firm, but sat on the results until two weeks after that, on the aforementioned Sunday before completion, when the saleswoman rang us , clearly indicating that they needed to get this work done.this was the main reason we felt we had to go along with it.
They received an offer of 179,950, which was negotiated down when the buyer had her own survey done, to the 169,950. We are angry because they got the original price we agreed, they did no work on it after intimating they needed to, and most of all, because they waited until the last minute to negotiate the price down , when they had not given any indication that there was a problem.
Surely this is sharp practice? I've written twice, it's gone to board level, but they won't change their stance...and I need to look at taking them to court perhaps? But I'm worried about costs if we don't have a case..
Grateful for any help

BargainMad_3

I can understand why you feel aggrieved. But if this went to law any impartial legal advisor would outline what Bovis might say in defence of its £160,000 offer, which would probably go along these lines:

To begin with, Bovis will probably contend that a realistic selling price WAS in fact £160,000. They were just fortunate to find a buyer at £169,950.

Bovis could also argue another scenario - that it might also have been left with something they couldn't shift at all. Something which needed £20,000 spending on it (no doubt they can produce the paperwork) as well as the time and effort selling it on. By selling it to them for £160,000 the onus for all of this was shifted FROM you TO them and they took on all subsequent risk but also any potential reward. Selling it to them also released you from any potential chain which usually exists when buying and selling a property - something which could be considered "of value" per se.

They will also contend that the difference between the £160,000 that they bought your property for and the £169,950 they sold it for isn't a profit of £9,950 either. If they involved an estate agent they, like you, would have had to pay the estate agent's commission (e.g. £3,500 at 1.75% plus VAT). Naturally this would have reduced the net amount, as would any seller side legal costs. Whatever net amount they did make is subject to Taxes as all their transactions are accommodated within their annual accounts. So that excess of £9,950 is nowhere near a net profit of £9,950.

(Indeed Bovis could argue that the net amount you would have derived if you had sold yourself via an estate agent/own solicitor would, by definiton, be lower than the £170,000 you are seeking.)


So overall Bovis will simply contend that they have been fortunate in gaining an asking price at a small premium to what they paid (and in the context of things that £9,950k would be considered a small premium). And they could emphasise that things might have been the other way round. Indeed Bovis will have cases on their books where they have done a quick sale for less than they paid for a property. What if that sale for £169,950 had fallen through? It happens all the time. So Bovis could maintain that the £160,000 that they paid you was a fair and realistic price in the grand scheme of things as they took on all of the subsequent risk but also the small reward they eventually obtained.

I'm not saying that the above is the definitive answer to how they might proceed but forewarned is forearmed! They might also bring the buying side into proceedings i.e. any discount/enhancements/incentives they gave on the property you bought from them as part of the whole deal.

I do sympathise with your case, particularly the timescales involved in alerting you to the final purchase price. As this has gone to board level, what has been the actual response from the directors?

Swizz

They are telling me to get lost. Our main gripe is that they in effect deceived us and manipulated the situation by telling us on the Sunday afternoon they needed to do £20k worth of work. We believed them,as they had sent a firm of property maintenance in so we assumed they actually intended to spend money, hence we agreed to the 10k reduction. Remember nothing had been mentioned in the whole six weeks since they did the survey. We maintain they deceived us as they did not do the work.
The merits of the relative risks on both sides of achieving a certain price etc aren't really relevant. It was the fact that we felt pressured into agreeing the reduction on that afternoon .
We are still keen on taking them to the small claims court..

Swizz

Thankyou bargainmad for your reply and trouble.of course, Bovis would have calculated the risk, and, we bought their house at full asking price, whereas we would have been able to negotiate if no part ex. They were very very keen to get the sale, and maybe our house wasn't their normal risk profile..BUT, none of this explains why they basically embellished the truth regarding the necessity of work needing to be done , and their intention to do the work before selling. If things were as bad as they maintained, we might well have pulled out to reconsider the situation.after all, we weren't living in it.
I know Bovis are probably reading this, they certainly know I have been posting online. Well, don't think I'm going away!

BargainMad_3

Well at least they won't be able to say they gave a discount at the other end if you paid the full asking price.

One thing I did leave out in the calculations of how much they made from selling your old house was Stamp Duty as to be honest I don't know how or if it applies to a part exchange agreement.

Do Bovis actually do a full "purchase" of your home for £160,000? One where they would have had to pay stamp duty of 1% (£1,600) making the actual purchase price to them £161,600. Or are they exempt from this for part exchanges?