Question from buyer's solicitor

septictank

I've received a question from the buyer's solicitor asking why the price I'm selling is substantially more than what I bought it for. Is this usual?

davidmcn

Yes, if there appears to be an increase in value which isn't obviously explainable. More likely to be a concern by their lender that there isn't something fishy going on.

fozziebeartoo

septictank wrote: »

I've received a question from the buyer's solicitor asking why the price I'm selling is substantially more than what I bought it for. Is this usual?

It is if it's a quick turnaround.........I think.

Our solicitor has asked our prospective seller why the property we want has gone from £220,000 to £28o,000 is a few months but also added "I assume it is due to the extensive renovation".

I assumed it is another money laundering safeguard.

ashe

Is it explainable? E.g really good area where value has risen, youve extended, original purchase a long time ago?

hazyjo

Never been asked that - and have some price increase whoppers! Sounds normal though from the replies above.

AdrianC

septictank wrote: »

I've received a question from the buyer's solicitor asking why the price I'm selling is substantially more than what I bought it for. Is this usual?

"Your client thought the price he offered was perfectly appropriate for the property in its current condition, in the current market. The conditions surrounding any previous pricing are not relevant to this transaction."

septictank

Thanks everyone.I appreciate your replies. It was indeed due to extensive renovations on a derelict property I bought. I've no problem answering it, just thought it unusual which clearly it isn't, it's becoming more normal.

davidmcn

AdrianC wrote: »

"Your client thought the price he offered was perfectly appropriate for the property in its current condition, in the current market. The conditions surrounding any previous pricing are not relevant to this transaction."

That doesn't really answer the lender's concerns though - obviously they already know what the purchaser and the valuer think, they're looking at other factors which may indicate that the purchaser and valuer are wrong.

AdrianC

davidmcn wrote: »

That doesn't really answer the lender's concerns though - obviously they already know what the purchaser and the valuer think, they're looking at other factors which may indicate that the purchaser and valuer are wrong.

This hasn't come from the lender. It's come from the buyer's solicitor, which means it's come from the buyer, who's probably looked on RM or Zoopla and seen the LR's previous recorded price, and so is now panicking. The solicitor's probably already told them "It's irrelevant", but they've almost certainly said "I don't care. I think it is, so ask. <flap, flap>"

The lender only care what it's worth now, which their valuer tells them.

G_M

AdrianC wrote: »

This hasn't come from the lender. It's come from the buyer's solicitor, which means it's come from the buyer, ........
The lender only care what it's worth now, which their valuer tells them.

The buyer's solicitor is almost certainly also acting for the lender - in only about 5% of cases do buyers and lenders use different solicitors.

Thrugelmir

AdrianC wrote: »

The lender only care what it's worth now, which their valuer tells them.

They'll have a keen interest in the previous price if the property is being flipped. Likewise if there's been a major refurbishment they may reconsider their lending terms.