Buying House from "We Buy Any House" Type Company - Ownership less than 6 months

teneighty

Quick question for all you mortgage experts.

Looking at a house to buy and it turns out it is being sold by one of these "we buy any house" type cash buyer companies who have not yet actually completed on the purchase. It seems they try to time the sale with their completion on their purchase.

Spoke to the mortgage broker and he said it would fall foul of the "not owned for more than 6 months" rule and he did not have any other lenders due to some other issues that had already eliminated most of the main stream lenders.

Anyone else been involved in a purchase from one of these companies and how they dealt with this 6 month rule?

Any help/advice gratefully received.

Before anyone chips in, the asking price is OK and the location is excellent so on the whole it is a good buy. It seems the company make their money by buying below market value and quickly selling on at market value. I've looked at comparables and the price they are asking is actually pretty good, only £5k more than a neighbour's house sold just over a year ago with a smaller garden and slightly worse outlook. Over the last year prices in the area have gone up by about 10% whilst this is just under 3% increase.

Thanks

stator

Personally I wouldn't buy from them, they are scum. They are ripping off the person who is really selling the house and I wouldn't want to help them make a profit.

I don't think there are any lenders who will lend in this situation, legally it could be a nightmare.
Your only option in this situation is to use cash to buy the house with no mortgage.

davidmcn

You either borrow from one of the few lenders which is willing to accept such schemes, or you buy with cash. There isn't a third way.

ACG

There are lenders who will do it, but not many. High street rates should be achievable.

Find a new broker.

teneighty

Thanks for the replys so far. Totally agree, I'm not at all happy with the way this is playing out and wish the agent had been more honest from the outset.

To be fair the broker has been pretty good. It is unfortunate that due to other circumstances we had a very limited lender pool whose criteria we met so do not have the luxury of accessing the the wider market. I even had a quick chat with another broker who I dealt with a few months ago and he said exactly the same thing.

Looks like it might be time to walk away. Shame as it really was a great property.

ACG

What are the other issues reducing your options?

teneighty

ACG wrote: »

What are the other issues reducing your options?

Its complicated and I cant really go into too much detail but it was basically a joint venture I was fronting for a friend.

csgohan4

teneighty wrote: »

Its complicated and I cant really go into too much detail but it was basically a joint venture I was fronting for a friend. We were scuppered by a large gifted deposit from a non-blood relative and low declared income for last couple of years. It was perfectly legal and above board I would hasten to add, just a way of helping a friend get on the housing ladder and save on the extortionate rent they were paying.

Do you not see issues with what your doing, if your relationship goes sour it will be expensive for both of you.


Plus if you ever want a family home, extra SDLT for you.


Money and friends/family do not mix.


Also no guarantees that the scammers won't try and get more money out of you at the last minute before exchange. They should know they do it to the desperate vendors they buy off

teneighty

Been doing a bit a research which I thought I would share.

It seems the correct term for this is a "back to back" transaction or "flipping" although I thought flipping was more of a quick re-sale rather than an immediate re-sale. Apparently it was popular mid 2000's but turned out to be quite popular with fraudsters so the lenders and law society have cracked down on it now.

The Law Society have a practice note which makes interesting reading http://www.lawsociety.org.uk/support-services/advice/practice-notes/mortgage-fraud/
No wonder my solicitor said it was very complicated unless I was a cash buyer.

Does seem a shame that legitimate buyers and sellers get caught in the net. With the usual identity checks and a robust mortgage valuation you would have thought the lenders could weed out the fraudsters quite easily. I don't really understand the unregistered mortgage point, surely that is just an unsecured loan if there is no charge on the property so the only person at risk is the lender.

I'm pulling out anyway but it has been a learning experience, next time I'll make sure to check the vendor actually owns the property and has done so for at least 6 months rather than rely on what the estate agent tells me.

ACG

As I mentioned, It can be done and at normal rates. Obviously if there are other things to contend with on top then it makes it more difficult/impossible but back to back transactions in itself is not a deal breaker.