Will I lose £6k?

davidmcn

mikeopvc wrote: »

I won't part with any cash unless I know for sure that I won't get ripped off

The fact that the agents are getting 8% commission makes it a rip-off as far as I can see.

franklee

I don't understand this modern auction method.

From this thread it seems the OP loses 6K if he can't buy in time. That's a huge amount given the property is only "worth" 80K.

But what a brilliant scam. If the EA has a mate with a dodgy property. He lists it cheap to pull in the mugs. Mortgage valuation turns up a problem, mortgage falls through, EA pockets 6K. Repeat. Do that ten times and the EA and his mate practically have a free property.

mikeopvc

eddddy wrote: »

So it sounds like you're happy to pay £87k for the property.

Before paying the £6k to the Auction co, the very least you should do is pass the legal pack over to your solicitor and ask him/her to tell you if there is anything which is likely to be an issue for the mortgage lender, or anything that you should be concerned about.

Is your solicitor happy with the searches, or will they want to do them again?

I assume the legal pack contains a completed 'Sellers Property Information Form, 'Fixtures and Fittings Form' etc - are you happy with those?

There is no guarantee that the seller will reply to any pre-contract enquiries, so do you know everything you need to know about the property?

e.g. extensions without planning consent, alterations without building regs, plans to build sewage farm next door, neighbours from hell, progressive subsidence, ...etc

I suspect that if you back out for any of the above reasons, you lose your £6k.

Similarly, if you get a survey and it's bad so you decide to back out, I suspect you lose the £6k.



Does the Reservation Agreement mention any conditions under which the deposit is refundable?

It won't be £87k it will be £81k as I told them the £6k needed to be included.

I spoke to the solicitor and he said the legals are not a problem within the timescale.

The legal pack does include Fixtures and Fittings Form etc and states clearly what will be left by the vendor.
Also extensions without planning consent, alterations without building regs, plans to build sewage farm next door, neighbours from hell, progressive subsidence, ...etc are all there as filled out by the vendor.

I spoke to the guy at the auction house and said I need something in writing to say the timescale is flexible or I won't be paying anything.

Iv'e been going into the estate agents 2-3 times a week for ages now with my wife and we speak to the agents all the time, I even know where one of them lives and know a couple of their friends so it would make life extremely difficult for them if they scammed me:D

marksoton

mikeopvc wrote: »

Iv'e been going into the estate agents 2-3 times a week for ages now with my wife and we speak to the agents all the time, I even know where one of them lives and know a couple of their friends so it would make life extremely difficult for them if they scammed me:D

Well someones getting scammed. No way should an agent be getting 6K on a 80K property.

MobileSaver

mikeopvc wrote: »

Reservation Fee is in addition to the final negotiated selling price.

mikeopvc wrote: »

I told them I was paying no more than £81k so it had to include the £6K, my winning bid is £75k

If you are 100% sure that your offer for the property is only £75k and you are sure that is a good price for that property then in this particular case the only one getting scammed is the seller; original guide price of £90k and they've now accepted £75k, I wonder if the seller has been told the offer is £81k without realising that includes £6k auction/EA fee?

If you sign a contract stating you have to complete within 8 weeks and you don't then you can't then complain you've been scammed if you lose your £6k! Look at it this way, what is in it for the EA/Auction House to be flexible if they can keep your £6k for breach of contract and then re-market the property? Tread very carefully.

eddddy

mikeopvc wrote: »

It won't be £87k it will be £81k as I told them the £6k needed to be included.

Your post isn't completely clear - are you paying £6k of the £81k up front as a deposit?


If you are paying £6k up front, you may have misunderstood my post. What you seem to be saying here:

mikeopvc wrote: »

I spoke to the solicitor and he said the legals are not a problem within the timescale.

... seems to be very different from what I'm saying here:

eddddy wrote: »

Before paying the £6k to the Auction co, the very least you should do is pass the legal pack over to your solicitor and ask him/her to tell you if there is anything which is likely to be an issue for the mortgage lender, or anything that you should be concerned about.

You seem to be saying that your solicitor can do the legal stuff within 28 days.

I'm saying that you should get advice from your solicitor before paying £6k (i.e. before the 28 day clock starts) - in case there is something about the property that makes it unmortgageable.

But if you're not paying £6k up front, that's less important.

mikeopvc

Ok sorry if I wasn't clear, I will need to pay £6k reservation fee to the auction co to secure the transaction and take the property off the market. I'll then owe £75k

They will then grant 28 days to achieve exchange of contracts from the date the buyer’s solicitor is in receipt of the draft contracts and a further 28 days thereafter to complete.

I will do as you suggest and ask the solicitor if he will take a look at the documents to see if there is anything untoward.

Thanks

mikeopvc

MobileSaver wrote: »

If you are 100% sure that your offer for the property is only £75k and you are sure that is a good price for that property then in this particular case the only one getting scammed is the seller; original guide price of £90k and they've now accepted £75k, I wonder if the seller has been told the offer is £81k without realising that includes £6k auction/EA fee?

If you sign a contract stating you have to complete within 8 weeks and you don't then you can't then complain you've been scammed if you lose your £6k! Look at it this way, what is in it for the EA/Auction House to be flexible if they can keep your £6k for breach of contract and then re-market the property? Tread very carefully.

Exactly as I was thinking, at the end of the day if I only pay what I've offered £81k and the seller has to accept £6k less then that's up to them.

I won't sign any contract stating I HAVE to complete in 8 weeks because nothing is guaranteed so I'm told.

mikeopvc

stator wrote: »

RUN AWAY.

This type of deal is NOT in your interests.

FIND ANOTHER HOUSE without this scam.

The MORTGAGE ADVISOR who works for the ESTATE AGENT is NOT looking out for your interests. He is part of the SCAM.

RUN AWAY

STOP TALKING TO THEM

Estate Agents are EXPERTS are LYING to YOU and trying to convince you to do things that are NOT in your interests.

RUN AWAY

Anything they say to you (especially anything said over the phone or in person) is NOT WORTH THE PAPER IT'S NOT WRITTEN ON.

RUN AWAY

If the mortgage adviser is in on the scam then I can easily eliminate him from the equation and use another one, I'm meeting one on Friday who was recommended to me by a friend who has just completed his second BTL project using him as the broker and the same solicitor I spoke to today.
So if I have a broker I can trust and a solicitor I can trust then surely it's out of the estate agents control, I'll just be relying on the lender (BM Solutions) and I'm fairly certain they won't be in on the scam!
Or am I missing something?

stator

mikeopvc wrote: »

Iv'e been going into the estate agents 2-3 times a week for ages now with my wife and we speak to the agents all the time, I even know where one of them lives and know a couple of their friends so it would make life extremely difficult for them if they scammed me:D

Sounds like your scamming yourself now