buyer's name sent to conveyancer is different than memorandum of sale

[Deleted User]

I am selling my property to an investor/ property developer who is paying via a bridge loan. The memorandum of sale has been sent to conveyancers. The buyer's conveyancer requested a draft contract from my conveyancer, which my conveyancer sent. However my conveyancer also told me the buyer's name had changed. I looked up the buyer on companies House and they are also a property developer.

Is this common? Did one investor pass the sale on to another. Did the estate agent know and not tell me? And why did my conveyancer send a draft contract even though the buyer had suddenly changed? My conveyancer told me they sent the draft contract because it was being chased by the estate agent and buyer's conveyancer.

I've emailed the estate agent, but my contacts there are on holiday until next week.

eddddy

It's very possible that the two companies are connected. Do the two companies have the same directors?

It's not really possible to guess the reason why this has happened - there are too many possibilities. Maybe ask the EA to call the buyer and see if they can get any more info.

It's intriguing, but without knowing why it's happened, it's impossible to say whether it's a good thing or a bad thing.

[Deleted User]

I've had a click through companies House looking at directors, companies, charges etc and they certainly operate in the and region. So that is likely.

My conveyancer is also saying they haven't received formal confirmation from the buyer's solicitor that they are instructed despite asking. The EA also mentioned a couple of times that the buyer's conveyancer works very quickly without searches etc and always wants to complete fast.

london21

It could be a flip.

It could be the first buyer is a finder and they get a commission for finding it.

The legal due diligence will be done, as far as you get the agreed price don't think anything to worry about. 

[Deleted User]

london21 said:

It could be a flip.

It could be the first buyer is a finder and they get a commission for finding it.

The legal due diligence will be done, as far as you get the agreed price don't think anything to worry about. 

Considering the request for draft contract came from the original buyer's conveyancer is reassuring at least. Originally I thought someone was trying to steal the sale which my conveyancer should prevent.

eddddy

[Deleted User] said:

 Originally I thought someone was trying to steal the sale which my conveyancer should prevent.

I doubt it's anything like that.

It's much more likely to be something like...

• An arrangement between associates/friends
• A property finding agent (as suggested above)
• A change of mind - the buyer was buying it using company A, but they've decided to buy it through company B (e.g. for tax reasons)

As I mentioned above, you can ask the EA.

I guess the slight worry might be that the EA should have done a 'financial evaluation' of the buyer (i.e. checked their source of funds etc). If the buyer has changed, perhaps that should be re-evaluated.

[Deleted User]

Thanks @eddddy. As long as there is no chicanery involved and the sale progresses I'll be happy.

user1977

eddddy said:

[Deleted User] said:

 Originally I thought someone was trying to steal the sale which my conveyancer should prevent.

I guess the slight worry might be that the EA should have done a 'financial evaluation' of the buyer (i.e. checked their source of funds etc). If the buyer has changed, perhaps that should be re-evaluated.

Though as I presume the expectation is a swift, chain-free sale, it's not as if you'd be hanging around long to find out it isn't.

[Deleted User]

user1977 said:

eddddy said:

[Deleted User] said:

 Originally I thought someone was trying to steal the sale which my conveyancer should prevent.

I guess the slight worry might be that the EA should have done a 'financial evaluation' of the buyer (i.e. checked their source of funds etc). If the buyer has changed, perhaps that should be re-evaluated.

Though as I presume the expectation is a swift, chain-free sale, it's not as if you'd be hanging around long to find out it isn't.

I'm not sure who would do the financial evaluation if the EA haven't been informed of the buyer switch. I don't know if either conveyancers to this.

eddddy

... but if you like conspiracy theories, I guess it could be an indication of a cartel of investors who are cheating you.

An example cartel might work like this...

• 5 investors are interested in offering on your property.

• If they all made offers, they would be bidding against each other, which would push the price up.

• So they agree that just one of them will make an offer, of say £200k.

• Then they hold a private auction between themselves to decide who gets the property.

• Let's say, the winning bid is £250k. The winner still only pays you £200k - and they split the remaining £50k between themselves

So the buyer has to change from whoever made the initial offer, to whoever won the private auction (like has happened to you).


But TBH, I think it's unlikely - and it would probably be illegal.

[Deleted User]

eddddy said:

... but if you like conspiracy theories, I guess it could be an indication of a cartel of investors who are cheating you.

An example cartel might work like this...

• 5 investors are interested in offering on your property.

• If they all made offers, they would be bidding against each other, which would push the price up.

• So they agree that just one of them will make an offer, of say £200k.

• Then they hold a private auction between themselves to decide who gets the property.

• Let's say, the winning bid is £250k. The winner still only pays you £200k - and they split the remaining £50k between themselves

So the buyer has to change from whoever made the initial offer, to whoever won the private auction (like has happened to you).


But TBH, I think it's unlikely - and it would probably be illegal.

So the auction winner essentially pays 10k to each investor to ensure they get the property?