Lost £6500 buying with "Modern Auction Method"

Richiegolding

Hi

This is my first post, so hopefully in the correct section.

Just looking for some advice please.

I purchased a house through the new modern auction method. I understand it is totally set up not in the buyers favour, however we had the funds and were ready to complete within 12 days of exchanging, well in timescale to the 28 day contract.

Now more then 2 months since the completion deadline, i am still no further forward as the house is in no position to be sold as the sellers have negative equity therefore can't pay there mortgage off at the price they agreed to sell for.

Now the problem is that the auction department are claiming that i won't receive my £6500 back even though i have stuck to my side of the contract and even though the house i want to buy can't be sold to me.

My question is, surely they can't legally keep my money as that house should not of been advertised for sale to start with????

Any help will be appreciated i am very anxious and worried over this, especially with 3 kids and xmas round the corner.

Thanks Richie

Thrugelmir

I'd take legal advice. The failure of the vendor to complete on the sale should result in a refund of the fee. Be an unfair condition if this was the case.

kingstreet

I'd post this in HBR&S as it's non-mortgage related and there are people who might know more about this over there.

stator

You need a solicitor I'm afraid.
I wouldn't believe any advice you receive on the internet. Lots of people who think they know the law but have no qualifications.

antrobus

Richiegolding wrote: »

...Now the problem is that the auction department are claiming that i won't receive my £6500 back even though i have stuck to my side of the contract and even though the house i want to buy can't be sold to me....

As I understand it, under the modern method auction, what you have likely paid is a reservation fee for an option to buy the property. Some auctioneers state that this is non-refundable, others state that it is refundable if the sale falls through due to a breach of the terms and conditions by the seller.

I don't think you have any option other than to take a copy of the terms and conditions from your auctioneers to a solicitor and get them to read it.

cooltt

antrobus wrote: »

As I understand it, under the modern method auction, what you have likely paid is a reservation fee for an option to buy the property. Some auctioneers state that this is non-refundable, others state that it is refundable if the sale falls through due to a breach of the terms and conditions by the seller.

I don't think you have any option other than to take a copy of the terms and conditions from your auctioneers to a solicitor and get them to read it.

^^^^^^This.
If the auction T&C's says this fee / deposit / bond whatever, is non refundable then they are not in breach of contract. It is the vendor who is at fault on the face of it by not being in a position to sell the property in the first place.

The vendor reserve price should have been enough to cover the outstanding mortgage. You're fight is with them not the auction house.

Richey_

May be worth discussing with your solicitor whether you can sue the vendor for your loss

adindas

Richey_ wrote: »

May be worth discussing with your solicitor whether you can sue the vendor for your loss

This is the most common sense advise in this thread.
In house purchasing Vast Majority of people must have solicitor. Why hire a solicitor you do not use their advice. What is the money for ?

AnotherJoe

Richey_ wrote: »

May be worth discussing with your solicitor whether you can sue the vendor for your loss

That will be the vendor who is in negative equity ? A phrase involving blood and a stone springs to mind, but maybe they have other assets. .

davidmcn

adindas wrote: »

This is the most common sense advise in this thread.
In house purchasing Vast Majority of people must have solicitor. Why hire a solicitor you do not use their advice. What is the money for ?

Or better still, ask the solicitor for advice before handing over the £6500.

chaotic_j

Hi Richiegolding,

Just wondering if you got your £6,500 back? Seen a property we are interested in being sold using the same method, the online auctioneer said that if the sale doesn't proceed due to the fault of the vendor, they give the fee back?

Also the basic information form for the property states that the sale price is enough to pay off any remaining mortgage... what did your basic property information form say?

Regards,
chaotic_j