bank withdrew on the day! we were in the van..

davidmcn

Pixie5740 wrote: »

Missives? Are you in Scotland?

Reference to a home report in the OP is a clue...

Not really any peculiarly Scottish element to the situation though. I doubt there is much you can do if a lender takes its time to make a decision about a complication which wasn't explained to them in the original application.

eddddy

So this sounds like the seller may have used a "quick sale" company. Many quick sale companies try to hide what they are doing from buyer and seller.

For example, they may have wanted the seller to perceive the transaction as a sale for, say, £88k - but the buyer to perceive the transaction as a purchase for £100k. With the "quick sale" company getting the £12k difference.

They would have presented the deal to the seller as "We'll sell your house for £88k, and you won't have any fees to pay". (And then typically persuaded the seller to sign a binding 'option agreement' at £88k)

So I suspect they use some 'creative' contracts to achieve this.

And when the lender found out about the 'creative' contract, they didn't like it.

stungbank

eddddy wrote: »

So this sounds like the seller may have used a "quick sale" company. Many quick sale companies try to hide what they are doing from buyer and seller.

For example, they may have wanted the seller to perceive the transaction as a sale for, say, £88k - but the buyer to perceive the transaction as a purchase for £100k. With the "quick sale" company getting the £12k difference.

They would have presented the deal to the seller as "We'll sell your house for £88k, and you won't have any fees to pay". (And then typically persuaded the seller to sign a binding 'option agreement' at £88k)

So I suspect they use some 'creative' contracts to achieve this.

And when the lender found out about the 'creative' contract, they didn't like it.

Hi eddddy i believe this is exactly what happened, on the property websites every 3rd "estate agent" is quick sale, this needs to be regulated or something as it would seem had we not received the letter about how monies are split no one would have been aware and I would currently be planning my new home!
my husband and I struggled with the moral issue of the sellers situation, when we found out, rationalizing that if they were in financial difficulty (which you tend to assume) then at least they were selling it a few months after it going on the market rather than waiting for the next seller ALSO the home report had miraculously dropped the value by £35k meaning it would be difficult to even achieve what we had paid!
For those in England the home report process itself is terrible, if your home doesn't sell in 4 months a further report is required when an offer is made and the price always drops close to the offer price. Reason given: if that is the price offered and accepted then the original valuation was too high.!?

davidmcn

stungbank wrote: »

if your home doesn't sell in 4 months a further report is required when an offer is made and the price always drops close to the offer price. Reason given: if that is the price offered and accepted then the original valuation was too high.!?

That doesn't seem an unreasonable conclusion for a surveyor to make, if it can't be sold at the original value?

maninthestreet

Surely the sequence of money transfers should have been:

Lender --- £100K ---> Buyer's Solicitor --- £100K ---> Seller's Solicitor

Then from seller's solicitor, £88K to the vendor, £12K to the 'quick sale' company ???

Marktheshark

The lender does not trust the arrangement, they are the one buying house.

stator

I suppose there is a risk that the seller will claim they were conned and start demanding compensation from everyone.

franklee

Don't know about Scotland but in England if the sale is done below market value and the vendor goes bankrupt then the sale can be overturned. Therefore I'm not surprised the lender doesn't want to touch this quick sale company with a bargepole. It is after all the lender's money at risk, especially given people in such financial difficulties to use a quick sale company may end up going bankrupt in the near future anyway.

I don't see the OP's solicitor at fault here. He has done his due diligence before the OP was committed to buy the house and the OP is still not committed so can walk away if necessary. That the OP has sold before tying up the purchase is the OP's risk to take and pay for temporary accommodation if needed. The OP knew it was a quick sale company so there was a risk to that.

eddddy

maninthestreet wrote: »

Surely the sequence of money transfers should have been:

Lender --- £100K ---> Buyer's Solicitor --- £100K ---> Seller's Solicitor

Then from seller's solicitor, £88K to the vendor, £12K to the 'quick sale' company ???

That's what one would hope.

But the seller would see that they are signing a contract for £100k.

The quck sale co don't say "We'll sell your house for £100k and charge you £12k in fees" (Because nobody would agree to a £12k EA fee!)

Instead they say "We'll buy/sell your house for £88k and charge you absolutely no fees." (So it sounds like a good deal.)

In trying to hide the facts from the buyer and seller, I guess the quick sale co have done something dodgy.

kingstreet

Here's Halifax criteria entry for sub-sales/back-to-backs under such a heading this transaction seems to fall;-

Sub-sales and back-to-back transactions are not acceptable.

A sub-sale occurs when a property is bought and then sold on within six months, i.e. the borrower is buying the property from someone who has themselves bought the property less than six months before. The date of registration at the Land Registry is how we determine the length of ownership.

This means that the current vendor must have owned the property for at least six months before we can accept an application to purchase that property, unless the property has been inherited.

A back-to-back transaction is a type of sub-sale where the intervening seller buys from the original seller and sells on to the borrower on the same day or within a few days. We also regard as sub-sales, cases where the seller acquires the freehold (or superior leasehold) title to the property, which they then immediately sell on to the borrower by the grant to them of a lease (or sub-lease).

The following cases are exceptions where it is acceptable for the property to be sold on within six months of acquisition by the seller.

Where sales are by:

A personal representative of the registered proprietor; or
An institutional mortgagee exercising its power of sale; or
A receiver, trustee-in-bankruptcy or liquidator; or
A developer or builder selling a property acquired under a part-exchange scheme.
We will also accept Inherited properties where the applicant is a beneficiary but has not owned the property for 6 months. The conveyancer will be responsible for ensuring the application meets the acceptable criteria.

Applications which involve assignable contracts or irrevocable powers of attorney in favour of intervening sellers are not acceptable. Any other structure to the transaction which has a similar effect should be reported to us.