Dodgy estate agent asking deal under the table

lauranash

Hi,

I made an offer on a property in an area that is booming. There were many offers, and they are now well over asking price.

The agent is worried that the bank will not follow and value the property well below the achieved price, so their solution is to sell the house at asking price "officially" and then transfer the rest "privately" after the sale.

This way sdlt is only calculated on the official price and the rest is under the table.

I spoke with my bank to check what would happen if their value doesn't match my purchase price. They told me that I can increase the LTV as I was only borrowing 60%.

But the agent wants a deal at asking price and the rest to be paid later (they have another potential buyer who accepted this).

I am baffled and wonder what action to take. Any advice welcome.
Thank you.

PS: The house is a deal to fight for. Even at a higher price. But not one to get a criminal record for!

gazter

lauranash wrote: »

Hi,

I made an offer on a property in an area that is booming. There were many offers, and they are now well over asking price.

The agent is worried that the bank will not follow and value the property well below the achieved price, so their solution is to sell the house at asking price "officially" and then transfer the rest "privately" after the sale.

This way sdlt is only calculated on the official price and the rest is under the table.

I spoke with my bank to check what would happen if their value doesn't match my purchase price. They told me that I can increase the LTV as I was only borrowing 60%.

But the agent wants a deal at asking price and the rest to be paid later (they have another potential buyer who accepted this).

I am baffled and wonder what action to take. Any advice welcome.
Thank you.

PS: The house is a deal to fight for. Even at a higher price. But not one to get a criminal record for!

your solicitor would have serious concerns over this and would have to inform lender...

There are other issues as well, is the Agent taking the money all for themselves, is the asset owned by more than one person, or to be divided as proceeds of a will, or a family break down division of property?

I would go along with what they want, until they are further down the line and then pull the offer of the extra money, claiming your lender threatened to pull their offer.

anselld

gazter wrote: »

your solicitor would have serious concerns over this and would have to inform lender...

It would be more than "serious concerns"! They wouldnt need to inform the lender because they wouldnt touch it with a barge pole. Completely illegal.

davidmcn

Apart from whatever you'd save by committing tax fraud, I'm not sure what the advantage is. If the valuation is less than the price, that's not a problem as long as you don't reach the maximum LTV you're allowed.

And I'm not sure how they propose to enforce the "paying later" bit of this wheeze.

lauranash

We agreed that this is totally illegal. In their views, neither the solicitors nor the bank would be made aware of the actual offer.

I don't want to let them get away with this. The question is where to report them to..?

nidO

lauranash wrote: »

We agreed that this is totally illegal. In their views, neither the solicitors nor the bank would be made aware of the actual offer.

If they arent even planning to tell their or your solicitors about the under-the-table extra payment beyond the asking price you could always go along with their wheeze, then when the sale is completed and they come asking for the remainder of their cash, "what remainder? I paid you what I offered and have the completion statement from the vendor's solicitor to prove it, look".
They'd then be in a position of having to admit to their own fraud to try to enforce whatever garbage private contract they get you to sign for the extra payment.

Obviously, i'm not seriously advocating this, but it could be a giggle.

rosie383

It does sound very tempting!
The whole thing sounds so dodgy it's crazy!

Let us know if you find out who to report them to. And I hope that you get the house if it is the right one for you, without having to play their stupid games.

There is The Property Ombudsman Service, but you need to complain to the EA first and give them eight weeks to respond and resolve the problem.
I would be inclined to put it in writing to the EA head office (facts only, NOT what you assume). Keep copies of any communication.

Annie1960

Do you have any evidence that the EA has asked you this (e.g. I bet they didn't put it in writing). Did you record the phone call? If not, then in your position my first step would be to download an app to record the call, ring the EA back and ask them to go over it again with you so you're sure you understand what they are asking.

Then if they are a large organisation, report it to their Head Office (who may not really care, especially if they are one of the large national chains).

You could also try Trading Standards. I would also bring this to the attention of HMRC (but you must have evidence), who will investigate whether this particular EA uses this ploy regularly.

You can't do anything until you have objective evidence, such as something in writing or a recording.

jjlandlord

Hypothetical scenario: You agree, the sale completes, then you suddenly cannot recall any such agreement and never pay up. Then what?

Will they be sending Big Mike and his bro to straighten you up?

Then, what with not telling the true price to the bank? What difference does it make?
One way or another the buyer still has to find the money that he cannot borrow.

Even from the agent/seller's point of view this is dodgy...

lauranash

Exactly. It is dodgy for everyone as there is not guarantee for them that I (or the other potential buyer who accepted the deal) will pay on completion.

I don't have any evidence so I am doomed.

Annie1960

lauranash wrote: »

I don't have any evidence so I am doomed.

So get some evidence!

It's easy!

Download an app to your mobile that will record your calls. Make another call to the EA. Make sure you call them by their name. Say you are a bit confused and want them to go over their proposal again. You will then have a recording to use as evidence.