Estate agent just revealed that vendor only bought house the day before it was relisted.

passthepigs

We had an offer accepted and mortgage approved. Just about to have our survey done for the lender. And wham! The estate agent reveals that the vender only completed the purchase in January and then listed it immediately. Invalidating our mortgage (sub 6 month sale), our IFA has suspects money laundering and is fuming that they haven't mentioned it before now.

He's also said he's never ever seen this happen in his entire career.

Estate Agents said words to the effect of "He knows this vendor and he's done it a bunch of times so what's the problem?". Prior to this his more senior colleague told me vendor is a landlord with a bunch of properties in the area and wants to diversify. At no point is the elephant in the room mentioned.

My question: what possible reason could this vendor have to try and flip the property that quickly that isn't money laundering? Because I'm struggling to see anything approaching legitimate.

theartfullodger

To make a quick buck: Buy at, say, £250k, sell at £350k day after: What's not to like? It's known as "flipping".


Buying and selling property (as the business..) is an entirely legal business. Prudhon might question the morality, albeit he'd also question that of any property owner.
https://en.wikipedia.org/wiki/Property_is_theft!

Thrugelmir

passthepigs wrote: »

My question: what possible reason could this vendor have to try and flip the property that quickly that isn't money laundering? Because I'm struggling to see anything approaching legitimate.

I wouldn't worry about it. You'll never know the truth of the matter. Time might be better spent moving on and finding something else. If obtaining a mortgage on the property isn't feasible.

davidmcn

passthepigs wrote: »

what possible reason could this vendor have to try and flip the property that quickly that isn't money laundering? .

How much did they buy for? How much have you offered?

Mutton_Geoff

I know in the States people have bunches of everything but in the UK I thought only bananas came in bunches?

Mr.Generous

theartfullodger wrote: »

To make a quick buck: Buy at, say, £250k, sell at £350k day after: What's not to like? It's known as "flipping".


Buying and selling property (as the business..) is an entirely legal business. Prudhon might question the morality, albeit he'd also question that of any property owner.
https://en.wikipedia.org/wiki/Property_is_theft!

I don't see why anyone would sell a house for £250k if its worth £350, I know you can get a bit off for fast completion, cash buyer etc but it wouldn't be enough to cover the legal costs buying and selling, EA fees and any other costs.

Flipping a house is buying it, doing it up quickly and selling it.

You make the money by improving the property and adding value, new kitchen and bathroom, sort out electrics and plumbing and full redecoration are usually required.

If you could make money by just owning them for a day everyone would be doing it. There could be another reason they are selling.

passthepigs

How much did they buy for? How much have you offered?

We don't know yet - it's so quick the land registry hasn't been updated yet! Agents also tried to press us for a very quick completion... This might be the reason.

davidmcn

passthepigs wrote: »

We don't know yet - it's so quick the land registry hasn't been updated yet!

The free price data lags behind, but if you pay for their title (which you'd be doing anyway, if you go ahead) you'll get the details. Unless they haven't registered their purchase yet, which seems unlikely.

Doozergirl

Mr.Generous wrote: »

I don't see why anyone would sell a house for £250k if its worth £350, I know you can get a bit off for fast completion, cash buyer etc but it wouldn't be enough to cover the legal costs buying and selling, EA fees and any other costs.

Flipping a house is buying it, doing it up quickly and selling it.

You make the money by improving the property and adding value, new kitchen and bathroom, sort out electrics and plumbing and full redecoration are usually required.

If you could make money by just owning them for a day everyone would be doing it. There could be another reason they are selling.

Death, debt and divorce are reasons that people might let a house go below value. People do strange things when they are desperate.

A lack of decent kitchen, bathroom and plumbing devalues a house. Doing it doesn't add value, it restores value. Most of the time houses aren't even priced correctly to do the work. You end up paying more once finished.

Flipping is anything you want it to be, but it's always buying at below value, even when work is required. Being able to sell on, having done nothing could be viewed as the perfect flip. If you didn't care about people .

Not the best way to launder money quickly give that there's quite a few obstacles, as the OP discovered.

D_M_E

Try putting the property postcode in https://www.rightmove.co.uk/house-prices.html

then look down the list and see if that particular property has a picture to the right of it's entry.

If it has, click on the picture and its previous listing should come up - will not show what it sold for but should show what it was on sale for.

Mr.Generous

Doozergirl wrote: »

Death, debt and divorce are reasons that people might let a house go below value. People do strange things when they are desperate.

A lack of decent kitchen, bathroom and plumbing devalues a house. Doing it doesn't add value, it restores value. Most of the time houses aren't even priced correctly to do the work. You end up paying more once finished.

Flipping is anything you want it to be, but it's always buying at below value, even when work is required. Being able to sell on, having done nothing could be viewed as the perfect flip. If you didn't care about people .

Not the best way to launder money quickly give that there's quite a few obstacles, as the OP discovered.

I agree with you to an extent, I renovate property for a living, perhaps its just my bad luck to never see or be able to negotiate / buy a property so far below market value that any profit whatsoever would be made selling it a day later.

The recent killer is the stamp duty, the buyer pays it, and in this case a 3% surcharge as an owner of multiple properties. They pay a solicitor or conveyancer, they then manage to avoid any utility costs, council tax or repair bills presumably and re sell only paying EA fees and legal costs.


So all these costs and fees are somehow less than the overnight markup after a days ownership?

Somehow now a buyer who wasn't interested before comes along and offers substantially more? Presumably in a day little or nothing has been done. Day 1 of a renovation we change locks, fit an alarm and poke about a bit. Maybe clear some rubbish.


We've bought repo's that have come from bereavement, divorce and debt. None were that far below market value, £5k probably average saving verses a house in similar condition otherwise for sale.

I'm not sure about your restores value comment, when we sell we tend to aim for top £ for the street / area. The property has never been sold for as much before. It could be a reflection on the property we buy I suppose, ex council houses sub 100k in poor condition ideal purchase for us. Finished to a high standard they raise the previous value cap. That's not restoring value its increasing it.