I am having a fraught time with my attempted house move. It is so strange that I thought I would blog about it. The strangeness may be only a product of the years since I last bought a house.
I saw a lovely old home – a Grade 2 listed building, very dilapidated – earlier this week. It was advertised at 289,995, and I put in a bid of 275,000. The agent told me that a cash offer of 250,000 was already in, and that the seller was inclined to accept it for a quick sale. The house ad, he said, been repossessed. In these cases, the rule was that no offer was accepted until contracts were completed.
That sounded very unpleasant and I wished I was in Scotland where the law enforces some honour. But even more strangely, the estate agent said he had no idea if it was a listed building, and went on to deny my suggestion it had at some stage been converted to flats, despite the fact that it has three floors, each with its own recently but horribly installed kitchen and bathroom.
A phone call to the council confirmed it is indeed a listed building and it appears there was no permission for those changes, though I have to visit the Council to make certain of that last. But my several contacts with the estate agent since then have left me with the strong impression that they have a real desire not to sell to me.
In short, what they have said to me is that the 250,000 cash offer is going through, and they will not inform the seller of my higher offer unless I can show the cash. I have said I will be able to show the cash within seven days. They have said that if I show the cash before the 250,000 transaction goes through, they will tell the seller about me. But otherwise not.
That seems to me crazy. I should have thought even a corporate seller would want to know somebody had offered 25,000 more, and be given the option of waiting a very few days to see if he could show the money. The house has only been on the market a fortnight.
This is my email exchange with the estate agent today:
Hello…
I presume my 275,000 remains the best offer?
I today paid over 125,000 in cheques into my current account for the
deposit. These will take a few days to clear.
I have a second meeting with my bank (Natwest) on Tuesday morning to
finalise the offer in principle. So the finance will be fully in place
before the end of next week.
I have instructed, and paid, Mr … to carry out a structural
survey.
Please inform me of any developments.
Craig Murray
Afternoon Craig,
Thanks for your email.
We cannot put your offer forward to our corporate client till we have seen the following documents
Agreement in principle from your bank
proof of deposit
Kind Regards
Incidentally, the house plainly has not been a happy family home for many years so I don’t have qualms about buying a repossession.
Am I being paranoid? I have half convinced myself the estate agent is trying to sell for 250,000 to a local developer they know, avoiding stamp duty, not advertising the listed building status and suppressing higher bids. Or is this all innocent and normal?
Perhaps they are trying to panic you into buying quickly.
With respect to an old and dear friend of mine who is a used house salesman, I’m not sure all estate agents are playing with a full deck, and their attempts at “sales tactics” reflects this.
“is this all innocent and normal?”
Or normal and not innocent?
Never trust the bastards, simple as that, they are an un-necessary middle man, I find it essential to get hold of the owner and open a channel of dialogue with them, estate agents hate that though.
The bastards.
“Under the Estate Agents Act, an estate agent is legally bound to present any offer promptly and in writing to the person selling the house”.
http://www.direct.gov.uk/en/homeandcommunity/buyingandsellingyourhome/buyingyourhome/dg_4001323
I’d wait a while if I were you, Craig.
The housing market has not corrected itself by a long chalk.
The Greek rescue is a sticking plaster to buy time. We may not be in the Euro, but we are obligated under the Lisbon Treaty to help in the futile attempt to stop the tide coming in.
Juat learned; married couple (city types) about to rent the flat below me, having just sold their house, mmm!!
Your a good man, please be smart. We need people like you to prosper.
Like Nick, I thought agents were legally obliged to put all offers to the vendor.
I would be tempted to quote this to your Agents and see whether they have a loophole round this.
But my experience (some time ago, admittedly) was that they were not above conspiring with developers or property companies to pervert the market, and on occasion fix it so that their own staff or their friends / family buy the property on the cheap, if they think the vendors will let them get away with it.
Assume that someone is trying to cheat you unless you are sure otherwise, and you won’t go far wrong…
John D Monkey
“But my experience (some time ago, admittedly) was that they were not above conspiring with developers or property companies to pervert the market, and on occasion fix it so that their own staff or their friends / family buy the property on the cheap, if they think the vendors will let them get away with it.”
Exactly what I am thinking. Is it because the owner is a distant mortgage company or bank they think nobody will be paying much attention, unlike if it was an individual selling their home?
PS
To most estate agents, “ethics” is the county they come from!
Craig,
Buying a dilapidated house to do up yourself is hugely stressful, especially with a young family. I have known more than one couple where its led to marriage breakdown.
Are you sure its what you and Nadira want to do?
And yes, I’m sure the estate agents are pulling a fast one of some sort. The property market is *so* corrupt.
Buying a house for a quarter of a million? You don’t sound poor to me!
And they get away with it.
Find the name of the current owner (from Land Registry) and make sure they are aware of your offer! Never trust agents!
Our Estate Agent Came Round Our Place And Said It Was Worth over £100,000
And put it on the market for £99,950
Meanwhile I advertised it on Loot…
Three Years Later We were Still Living There….
Yes It Was a Very Nice Bungalow….
But we wanted something a Lot Bigger…
So 3 Years Later – The First Person who actually came round through an Advert I had placed in Loot….
Came Round Again…
And Offerred Me £72,000 in Cash….
Bur the Deal Had To Be Completed in 6 Weeks…
Meanwhile the House I wanted to Move To Had Dropped in Price By Over £100,000
And I said to him
I will offer you Cash – But It Has To Be Completed in 6 weeks – Or The Deal Is Off….
You see it all comes down to timing…
If you move when prices are at their historical lows and are taking on debt you think you can’t really afford unless you work your balls off – yet expecting to lose your job ….
Then well the additional space…
If the worst happens…
Then we can rent our the extra – space – and it will just about cover the mortgage….
Instead – I bought the biggest (second hand) scalextric track I could find…
My Lad was 5 years at the time…
And all I had when I was his age was a Hornby Train Set (Nice Tunnel Though – Made Our of Chicken Wire and Papier-Mache and Hand Painted To Look Like a Mountain in The Lake District
He lost his job today – but – he got The Girl.
The Estate Agent Got No Commission
Tony
This is from the Independent six years ago:
“A recent report for the Office of Fair Trading has reported that a favourite scam among estate agents is to sell a property at a price lower than the market value to someone who has eased the process by a bunging a few thousand pounds in the direction of the agency.”
http://tinyurl.com/2u68ska
I would suggest an email to local Trading Standards and the OFT would be worthwhile as something smells rather rotten. I wouldn’t contact the Estate Agents and give them a heads up so they can cover their tracks.
@Abe
I used to live in ealing and a one bed flat/pit in the middle of an industrial estate (in need of major modernising), in a not very nice area cost about £160k and that was five years ago. It was on sale last year for £200k.
IN West London the market is buoyant – demand outstrips supply.
As the stamp duty threshold for £250k + is 2% more than for prices below £250k (more for first time buyers) then it would seem an indicator of some fraud taking place of which I am sure the Inland Revenue would be interested in as well as the OFT. I expect some brown envelopes will be changing hands stuffed with good old fifty pound notes. The fifty pound note only exists to enable this type of fraud as presenting one at your local Sainsburys is bound to cause consternation. (Incidentally the fifty has fewer security precautions than the lesser denominations for example the lack of an ultra violent light sensititve watermark).
“I have half convinced myself the estate agent is trying to sell for 250,000 to a local developer they know, avoiding stamp duty, not advertising the listed building status and suppressing higher bids.”
Convince the other half of yourself. I am sure you are spot on. It happens all the time…
Tony Opmoc –
deleted your last few and the complaints about them. If you want to post completely irrelevant details of your own life, please get your own blog. I really have had enough of it.
Craig,
Thanks that’s O.K.
Go for the Reposession
Don’t Feel Guilty About It
Tony
Save your money. Rent instead.
The property market has nowhere to go in the U.K. but down. It will burst just as all of the other financial Ponzi pyramid schemes have/are/will burst(ing).
In (say) five years’ time you will probably be able to purchase two homes within your budget.
Thanks for the blog.
Hi Craig,
Like others here I am of the opinion that UK house prices are set for very large falls over the coming years – just look at the state of the economy and levels of individual and national debt. Have a look at the House Price Crash website and also the GEI website run by Dr Bubb.
I too believe UK house prices are unsustainable by a long. long way. The decision is not primarily financial.
Bro..if you get it I will take some time off to help you fix it up…I could do with a break…
Frazer –
Yep, I am already working out where you and Tommy and his wife are going to sleep!
They are the most corrupt and bent people you’ll ever meet… well maybe not quite that bad but not far off. By pass them if you can.
If possible, cut out the Estate Agent, go to the Registered Proprietor (owner) and inform them that you have put in a higher offer.
Cut out the middle man, I would.
If the estate agent won’t tell the vendor of your offer, go direct. What do they think you are, stupid?
The end of HIPS is good news. An Estate agent came round to see my house with a flat fee of £1,000.00 for selling it conditional on a £350.00 HIPS being done. He priced my house £25,000.00 over the other agents. I smelt a rat, because after he’d taken my money for the HIPS, it doesn’t make any difference what price the house sold at.
Estate agent fraud is highly developed and totally routine. The actual value of a property is what it’s worth to you. A mosque is slowly being constructed behind my back garden. That’s not everyone’s cup of tea.
Does the disappearance of HIPS foretell a reduction in the monumental pile of legislation generated in the last 13 years by the office of the deputy Prime Minister, forcing me to spend £1,000.00 per annum on every trade I do? That’s one grand for domestic electric, another for solar plumbing, another for air-conditioning and another for solar electric, not to mention the cost of tools, training and other business costs. No, because in this country we believe in regulating the construction industry – to the teeth.
In practise, after the air-con engineer gets his back covered by the paperwork, he still spews out all the banned CFC chemicals of the old system onto the floor to save time and money in disposing of it properly.
The mentality of New Labour to control EVERYTHING, has done nothing at all to control any of the bad practise that takes place in any sphere. In fact it has made it worse, because only the law-breakers are surviving in this recession.
The good estate agents have probably all gone to the wall.
You seem to have made your mind up about this particular house.
I have no experience with estate agents and would try and sell privately rather than use them, what a racket.
I would also try and get in touch with the real owners and deal with them if appropriate.
If it has had structural changes that are not on the councils plans then they have to pass them first, or you have to change it back to original plans.
Don’t buy a pig in a poke that needs tons of work doing to it, for that sort of money you can shop around a little.
Should you want this house badly, get a man with architecture experience to have a look at it first, it helps.
Let me know if you need some trusted handy men/ supervisors, who can get their arse out of bed in the mornings.
After my Blackburn experience I can do with a working holiday of sorts.
And send that key back… LoL
Your description leads me to think hanky panky from the realtor is not the sum of potential problems.
Bad ‘conversions’ involving unauthorized changes and inept execution lead me to think the property should be painted Yellow : Lemon.
Why ? Because you will be fighting City Hall at the same time the Building Inspector will have you dead to rights to require extensive changes to conform with safety standards.
There’s liking a good fight…and then there’s leading with your chin.