Purchase about to fall through due to misrepresentation

BarelySentientAI

ThisIsWeird said:

AJM1984 said:

ThisIsWeird said:

AJM1984 said:

ThisIsWeird said:

Hi AJM.

"It's a loft conversion. Every house for sale recently on the same road has one but is marketed as 2 bedroom by other EA. Around the valuation mark we have received from our lender."

Can you confirm - are you saying that the other houses in this street, those with similar (non-conforming) loft conversions, are correctly being marketed as '2-bed', but still have listing values of around £135-140k? Or, are these 'correctly-labelled' houses significantly lower in value?

There have been 4 other houses on the road, within the last month or so, each one with the same building specifications; maybe slightly different garden size or parking. Listed as 2 bed with an attic room. The pictures show beds in the attic rooms but they are still deducted from the count. All of them are currently STC but I can see that all of them were listed as "Guide price 120,000 to 130,000!" except one which was listed at 130,000 and "Offers over!"

Ok, so your seller and EA have been quite naughty.
They have seemingly added a premium by calling it a third bedroom, when they shouldn't have.
You could land them in it, and would do if you pulled out; the EA would have to - legally - relist it correctly as a 2-bed as they cannot now claim they don't know. It would be easy to report them if they tried otherwise.
The seller would then almost certainly have to knock a good £10k from their asking, so that scuppers the dream of their next house. So, the seller owes you the full £5k.
But, you'd also both lose out if it falls through.
It would be a considerate move by you to agree to a 50:50 split, and they'd better be bludy grateful if you do this!

This is exactly what my MA is saying. The EA was originally telling us we were wrong, the surveyor was wrong, the lender was wrong. However, our MA told us to get the EA to ring him and she quickly changed her tune. He said "The penny has now dropped with the EA and she's treading dangerous ground." 
We will, absolutely, pursue this if we lose out now. Our MA has already offered support. I've downloaded PDF copies of the EA brochure and adverts, taken screenshots, saved emails etc. It's listed as 3 bedroom everywhere. Our MA says we shouldn't have to take on extra costs here. We even suggested that the EA might want to waive her fees applied to the vendor to help our vendor lower her costs and pass the savings onto us. We are trying to think outside the box. We're prepared to meet somewhere in the middle if we can.

I'm not sure the EA has done anything wrong yet. 
It's not for them to check building control records, and determine whether every room or extension 'conforms'. They go by what they saw and were told. 
But, now they know the situation, they cannot continue listing it incorrectly. 
Is my understanding.
So I suspect you might not have a claim against them.

The guidance sort of disagrees with you - it says that if the vendor can't demonstrate it to the EA's satisfaction then the EA should either contact building control themselves to clarify or list it as "building regulations status unknown", "boarded loft space" etc.

Don't know if that's ever been tested though, and I'm not aware of any EA ever contacting building control or the planning department.

smipsy

Honestly, having read the whole thread, I agree with your MA, I think you hold all the cards here. You can always find another house, whilst the seller might struggle to find another buyer offering anywhere near your valuation as they will have to remarket as a two bedroom.

If it were me, I'd stick offering your valuation only, don't meet the seller in the middle. It sounds a lot like both of them have tried to pull a fast one on you, why would you then do them a favour?!

AJM1984

sheramber said:

AJM1984 said:

Albermarle said:

AJM1984 said:

ThisIsWeird said:

Hi AJM.

"It's a loft conversion. Every house for sale recently on the same road has one but is marketed as 2 bedroom by other EA. Around the valuation mark we have received from our lender."

Can you confirm - are you saying that the other houses in this street, those with similar (non-conforming) loft conversions, are correctly being marketed as '2-bed', but still have listing values of around £135-140k? Or, are these 'correctly-labelled' houses significantly lower in value?

There have been 4 other houses on the road, within the last month or so, each one with the same building specifications; maybe slightly different garden size or parking. Listed as 2 bed with an attic room. The pictures show beds in the attic rooms but they are still deducted from the count. All of them are currently STC but I can see that all of them were listed as "Guide price 120,000 to 130,000!" except one which was listed at 130,000 and "Offers over!"

A bit strange that all 4 houses have converted lofts, but without building regs ( as well as the one you are maybe buying) . Maybe the same local builder did them all on the cheap/cash in hand !

It is very odd! The other houses have open plan attic rooms (again, with full double beds in) without doors and that's the key difference. The one we're looking at has sacrificed floor space to put in a full doorway at the top of the fixed staircase. The room is L shaped. Under all the ceiling sloping, where it meets the floor, the wall space is fully fitted cupboards with storage shelves and another door leading to a walk in closet next to the entrance doorway. The finish is superb, which is why we were surprised to find it had no building certificates. It has electrics, heating and two velux windows. One facing the front and one facing the back of the house.
Two houses around the corner, less than .2miles away, are advertised as two bedroom but depict the same loft conversions as the other houses. Again with beds in. They are listed as 110,000 and 120,000 offers over.

two velux windows. One facing the front and one facing the back of the house.

Are these adequate for escaping in case of fire?

Yes. They're chest height and I could squeeze my chubby backside out of them. I didn't try but they are a good width!
Imagine viewing a house and saying "Gimme a second while I just try and climb onto your roof...." 🤣🤣

AJM1984

smipsy said:

Honestly, having read the whole thread, I agree with your MA, I think you hold all the cards here. You can always find another house, whilst the seller might struggle to find another buyer offering anywhere near your valuation as they will have to remarket as a two bedroom.

If it were me, I'd stick offering your valuation only, don't meet the seller in the middle. It sounds a lot like both of them have tried to pull a fast one on you, why would you then do them a favour?!

We've said, so far, that we don't think we can afford to take 5k out of our cashpot. I guess we'll just have to wait and see what happens next week and if anyone is willing to compromise. My bet is on the vendor backing out of the sale, getting the loft converted as cheaply (but as legally) as possible, then putting it back on the market for 140k to 145k and finding a new dream home with an increased budget. 

ThisIsWeird

Smipsy above is right, and you do hold all the cards, except that you've spent money on this purchase already, and you seemingly do like this house?
The seller could back out, as you say, and try and get the place regularised (is that what they call it?), but imagine what that would involve - theoretically taking up the floor to examine and upgrade the joists, either removing or adding extra insulated p'board to all the walls, and stuff like that. Imagine the cost? I doubt they'd make any more on it being a 'proper' 3-bed.
If they are sensible, they'll take the £5k hit - if they can.
You just need to decide what's important to you.
Don't forget to make it clear to the EA what the facts are here, as outlined earlier. They need to know they've been 'rumbled', and so has the vendor; this is not a case of simple negotiation over a sale price, it's a house having been incorrectly described and valued for sale in the first place. Any compromise you make towards it, should be very gratefully welcomed, and not 'expected'.

Thinking about it, on the 'balance of probabilities' the EA would have known - at the very least suspected - that the 3-bed description was dodge, as they should know the market in the area, and how the other similar houses were described. They are the 'experts'.
Ditto the vender - on the BofPs, they will have known how the other similar houses in the 'hood were described, so there's a very good chance that they knew they were pushing it.
But, we don't know!
Still, it's their error, so don't let them treat this as a straight-forward 'negotiation' where both sides are 'expected' to move; this is largely a problem for them to resolve, and for you to possibly be 'generous'
And that comes down to how much you want this house.

GDB2222

AJM1984 said:

smipsy said:

Honestly, having read the whole thread, I agree with your MA, I think you hold all the cards here. You can always find another house, whilst the seller might struggle to find another buyer offering anywhere near your valuation as they will have to remarket as a two bedroom.

If it were me, I'd stick offering your valuation only, don't meet the seller in the middle. It sounds a lot like both of them have tried to pull a fast one on you, why would you then do them a favour?!

We've said, so far, that we don't think we can afford to take 5k out of our cashpot. I guess we'll just have to wait and see what happens next week and if anyone is willing to compromise. My bet is on the vendor backing out of the sale, getting the loft converted as cheaply (but as legally) as possible, then putting it back on the market for 140k to 145k and finding a new dream home with an increased budget. 

None of us have seen this loft space, but reconstruction to make it legal is likely to cost much the same as starting from scratch. For example, all those nice interior fittings that give lots of storage space will probably need to come out in order to get at the joists.  The front velux window needs to come down close to the gutter, to give the fire brigade access - does it? If not, then already having a non compliant window doesn’t really reduce the cost of installing a compliant one.

 And, of course, the fact that the other conversions in the road are ‘illegal' should tell you something. It either means that the conversions cannot be done legally, for example because the roof height is too low. Or, it means that it’s not economic to do it properly, ie it’s too expensive compared to the value of the property.

So, I don’t think your scenario of the house owner doing the work cheaply then selling at a higher price is a very likely scenario. 

You just need to give the house owner the chance to adjust to the reality that the house is worth a bit less than she hoped. I can’t predict what she will do then. She may decide to stay put, or she may decide to negotiate over the price, but I think she will need to have a chance to make enquiries and discover that there’s no quick fix. 

nicmyles

+1 for your best bet being sharing out the additional cost to keep the chain together. Either just between you and vendor or between the whole chain (bit harder).

£5k is both a lot to put your hands on if you don't have it, and absolutely nothing in the grand scheme of the purchase price. V frustrating for you. But everyone will want the chain to stay together, so sharing the pain *must* be the way forward.

AJM1984

Today has been a roller-coaster of tension, stress and emotion.

We offered to split the difference either between ourselves and the vendor or all three parties and the offer to do so was rejected. She won't even allow renegotiation within the chain. The vendor has also decided that she won't put in the time or costs for regularisation. We pay all 5k or she's withdrawing from the market and no longer proceeding with her purchase. She's already instructed her solicitor to inform all parties that no sales or purchases are going ahead, so I'm not sure why we've been given a 5k ultimatum if that's what she's already done. We had a few counter offers prepared that now seem redundant. (Her doing some of the necessary repairs and we'll pay the full 5k etc.)

We've also now been informed that she was due to pay quite a hefty amount of CGT on the sale too, hence her not being willing to lose another 5k on top. (I'd be upset too!) She's an older lady and didn't understand the sale process throughout this whole ordeal and it sounds like this has been a really stressful situation for everyone involved. She has everything currently in storage too, at great cost, so we even offered her more time before potential exchange/completion so that she could remove the storage costs from the equation and we'd store our things instead (at our cost) but it wasn't enough. 

On the plus side, we locked in our mortgage offer with some pretty good rates and we have been told we can apply that to another house when and if we find one within the next 3 months.

RHemmings

AJM1984 said:

Today has been a roller-coaster of tension, stress and emotion.

We offered to split the difference either between ourselves and the vendor or all three parties and the offer to do so was rejected. She won't even allow renegotiation within the chain. The vendor has also decided that she won't put in the time or costs for regularisation. We pay all 5k or she's withdrawing from the market and no longer proceeding with her purchase. She's already instructed her solicitor to inform all parties that no sales or purchases are going ahead, so I'm not sure why we've been given a 5k ultimatum if that's what she's already done. We had a few counter offers prepared that now seem redundant. (Her doing some of the necessary repairs and we'll pay the full 5k etc.)

We've also now been informed that she was due to pay quite a hefty amount of CGT on the sale too, hence her not being willing to lose another 5k on top. (I'd be upset too!) She's an older lady and didn't understand the sale process throughout this whole ordeal and it sounds like this has been a really stressful situation for everyone involved. She has everything currently in storage too, at great cost, so we even offered her more time before potential exchange/completion so that she could remove the storage costs from the equation and we'd store our things instead (at our cost) but it wasn't enough. 

On the plus side, we locked in our mortgage offer with some pretty good rates and we have been told we can apply that to another house when and if we find one within the next 3 months.

I think that through this thread, you've talked through the various possibilities, and consequences. And, there has been discussion on other threads too. I've not got any more to add - it's time for you to look at everything and make your decision. Good luck with everything. 

AJM1984

RHemmings said:

AJM1984 said:

Today has been a roller-coaster of tension, stress and emotion.

We offered to split the difference either between ourselves and the vendor or all three parties and the offer to do so was rejected. She won't even allow renegotiation within the chain. The vendor has also decided that she won't put in the time or costs for regularisation. We pay all 5k or she's withdrawing from the market and no longer proceeding with her purchase. She's already instructed her solicitor to inform all parties that no sales or purchases are going ahead, so I'm not sure why we've been given a 5k ultimatum if that's what she's already done. We had a few counter offers prepared that now seem redundant. (Her doing some of the necessary repairs and we'll pay the full 5k etc.)

We've also now been informed that she was due to pay quite a hefty amount of CGT on the sale too, hence her not being willing to lose another 5k on top. (I'd be upset too!) She's an older lady and didn't understand the sale process throughout this whole ordeal and it sounds like this has been a really stressful situation for everyone involved. She has everything currently in storage too, at great cost, so we even offered her more time before potential exchange/completion so that she could remove the storage costs from the equation and we'd store our things instead (at our cost) but it wasn't enough. 

On the plus side, we locked in our mortgage offer with some pretty good rates and we have been told we can apply that to another house when and if we find one within the next 3 months.

I think that through this thread, you've talked through the various possibilities, and consequences. And, there has been discussion on other threads too. I've not got any more to add - it's time for you to look at everything and make your decision. Good luck with everything. 

Thank you, it appears as though the decision has been made for us despite our numerous offers and compromises. Even with the offer of us putting up the full 5k the seller appears to be withdrawing.

Not the best FTB experience. A solid 1 out of 10. 🤣
I've appreciated everyone's input throughout. Huge thanks to all!