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BEWARE: Offers from Capital Funding - Scam
happywarmgun
Posts: 275 Forumite
I wanted to share my recent experience with a nasty 'scam' I nearly got sucked into. It concerns a company called 'capital funding'.
The situation is this: Due to an expanding family I moved out my city centre apartment about a year ago to rent a much bigger house - the plan being to sell at the top of the market, rent for a few years, and buy my next property at the bottom. The plan was nearly brilliant but for the small detail that we have been unable to sell the flat. It's lain empty for a year incurring (very small) mortgage interest payments, service/management charges, utility bills etc and obviously falling in value. I'm very lucky that all the above is affordable to me but I'm obviously still keen to get shot.
We've slashed the asking price of the flat to well below what I paid for it 5 years ago with still no offers. Then, a few weeks ago, out the blue my estate agent recieved a written offer from a company called 'Capital Fuding'. It was a wee bit below the asking price but not obscenley so. The estate agent followed up and the yarn that was spun ran something like this: "Capital Funding are a company that have a data-base of foreign investors looking for specific property types. My flat met the spec. The offer was the offer, no negotiation - they were up front that they would do a back-to-back sale (i.e. sell to their foreign investor at a premium and make overnight profit that would be the difference between the price I sold to them and the price they sold to their client).
It does sound very plausible, and on reflection whilst I wish it was my estate agent and not this capital funding company who had the list of foreign investors willing to pay over the odds, the reality was they were offering a price that I was happy to sell at - so why would I not accept and say good luck to them?
Thankfully, my estate agent smelt a rat and found the link I post at the bottom.
It seems that what they do is this: Once you accept their offer, they contact you directly and make it clear it is vital you don't pull out, they need to complete in a very tight timescale. They want a several hundred pound deposit from you the seller to guarentee that you wont pull out, the deposit to be returned as part of the sale price at completion. Now given they only target people with long standing empty flats which are burning money I bet most people are willing to go with this - it sounds plausible.
However - this deposit is taken on a pretty one sided basis - it seems that if they don't meet the six week criteria they do not see themselves as obliged to refund you. Anecdotally, it seems that the 'matched' foreign investor may never have existed. You are then between a rock and a hard place. They essentially have locked you into an option on your house - they can market it and if they do find a buyer willing to pay more they pocket the difference (and the chances are if they could find a UK buyer willing to pay more so could you) - or if you give up waiting for them to find this non-existing buyer you forfeit your several hundred pound deposit. Either way, they have a giggle on their way to the bank. To be fair to them - with very clever wording on what is presented to you (i.e. the subtle difference between what is in their terms and what is implied) this 'scam' is arguably entirely legal!
However, my sense is that anyone who has been made such an offer deserves to know others experience with this company before they bite at something that seems to good to be true.....
In this case.... seller beware!
http://www.eastsussex.gov.uk/yourcouncil/pressoffice/pressreleases/2006/01/812.htm
The situation is this: Due to an expanding family I moved out my city centre apartment about a year ago to rent a much bigger house - the plan being to sell at the top of the market, rent for a few years, and buy my next property at the bottom. The plan was nearly brilliant but for the small detail that we have been unable to sell the flat. It's lain empty for a year incurring (very small) mortgage interest payments, service/management charges, utility bills etc and obviously falling in value. I'm very lucky that all the above is affordable to me but I'm obviously still keen to get shot.
We've slashed the asking price of the flat to well below what I paid for it 5 years ago with still no offers. Then, a few weeks ago, out the blue my estate agent recieved a written offer from a company called 'Capital Fuding'. It was a wee bit below the asking price but not obscenley so. The estate agent followed up and the yarn that was spun ran something like this: "Capital Funding are a company that have a data-base of foreign investors looking for specific property types. My flat met the spec. The offer was the offer, no negotiation - they were up front that they would do a back-to-back sale (i.e. sell to their foreign investor at a premium and make overnight profit that would be the difference between the price I sold to them and the price they sold to their client).
It does sound very plausible, and on reflection whilst I wish it was my estate agent and not this capital funding company who had the list of foreign investors willing to pay over the odds, the reality was they were offering a price that I was happy to sell at - so why would I not accept and say good luck to them?
Thankfully, my estate agent smelt a rat and found the link I post at the bottom.
It seems that what they do is this: Once you accept their offer, they contact you directly and make it clear it is vital you don't pull out, they need to complete in a very tight timescale. They want a several hundred pound deposit from you the seller to guarentee that you wont pull out, the deposit to be returned as part of the sale price at completion. Now given they only target people with long standing empty flats which are burning money I bet most people are willing to go with this - it sounds plausible.
However - this deposit is taken on a pretty one sided basis - it seems that if they don't meet the six week criteria they do not see themselves as obliged to refund you. Anecdotally, it seems that the 'matched' foreign investor may never have existed. You are then between a rock and a hard place. They essentially have locked you into an option on your house - they can market it and if they do find a buyer willing to pay more they pocket the difference (and the chances are if they could find a UK buyer willing to pay more so could you) - or if you give up waiting for them to find this non-existing buyer you forfeit your several hundred pound deposit. Either way, they have a giggle on their way to the bank. To be fair to them - with very clever wording on what is presented to you (i.e. the subtle difference between what is in their terms and what is implied) this 'scam' is arguably entirely legal!
However, my sense is that anyone who has been made such an offer deserves to know others experience with this company before they bite at something that seems to good to be true.....
In this case.... seller beware!
http://www.eastsussex.gov.uk/yourcouncil/pressoffice/pressreleases/2006/01/812.htm
0
Comments
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this company was on watchdog the other day! they guy behind it is a conman!
found a linky
http://www.bbc.co.uk/consumer/tv_and_radio/watchdog/reports/insurance_and_finance/insurance_20080414.shtml0 -
I would take all offers with a pinch of salt until the person offering has actually viewed the property.0
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