ChatterBank24 mins ago
House Sale
I wonder if any of you out there have any views on this situation. My nephew sold his house back in May, to a cash buyer. He reduced his price on the basis that this buyer was not in any chain and had cash. The buyer provided to the Estate Agent a bank statement that showed he had the funds, as a result of a house sale in April
Move on a few months, he started acting awkwardly, stating the survey was bad and money needed spending, and he wanted a further reduction in the price. My nephew asked repeatedly for a copy of this survey but has never received it. In order to progress the sale, he did reduce the price more.
Move on again to last week, the buyer is now not ready to complete because he has no funds. he does not even have enough funds to pay the deposit, according to a telephone conversation which I have heard the recording of. He refuses to answer questions put to him about the cash, which was supposed to be from this house sale back in April.
It now seems that he is selling a further house, and his buyer cannot get his funds for 8 weeks. My nephew is buying from someone who is buying a house that is part of a deceased estate. Despite all this, all the contracts have been exchanged, and they are all about to move on this basis.
My nephew's conveyancer has advised him in the strongest possible terms not to go ahead with this move as she cannot guarantee the person at the bottom of the chain will get his funds. If he doesn't, they could all end in litigation for breach of contract!! Shades of Jarndyce vs Jarndyce!!
I believe that this buyer has falsely represented himself, which I am sure is illegal. My nephew would a) probably not have sold to him had he not been a cash buyer, and b) certainly would not have reduced his price on that basis. Does anyone out there believe he has a claim against this man.
Move on a few months, he started acting awkwardly, stating the survey was bad and money needed spending, and he wanted a further reduction in the price. My nephew asked repeatedly for a copy of this survey but has never received it. In order to progress the sale, he did reduce the price more.
Move on again to last week, the buyer is now not ready to complete because he has no funds. he does not even have enough funds to pay the deposit, according to a telephone conversation which I have heard the recording of. He refuses to answer questions put to him about the cash, which was supposed to be from this house sale back in April.
It now seems that he is selling a further house, and his buyer cannot get his funds for 8 weeks. My nephew is buying from someone who is buying a house that is part of a deceased estate. Despite all this, all the contracts have been exchanged, and they are all about to move on this basis.
My nephew's conveyancer has advised him in the strongest possible terms not to go ahead with this move as she cannot guarantee the person at the bottom of the chain will get his funds. If he doesn't, they could all end in litigation for breach of contract!! Shades of Jarndyce vs Jarndyce!!
I believe that this buyer has falsely represented himself, which I am sure is illegal. My nephew would a) probably not have sold to him had he not been a cash buyer, and b) certainly would not have reduced his price on that basis. Does anyone out there believe he has a claim against this man.
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Hi. You son has not 'sold' the house to him if the sale had not been completed. Usually on Exchange of Contracts the buyer deposits around 10% of the sale price with his solicitor. This is non refundable if the sale does not go through due to the buyer rescinding . If the buyer has deposited the 10% deposit and can't Complete your son is within his rights to keep the deposit. This is the only 'claim' he has.
As it stands your son still owns his house and I would take the advice of your sons Conveyancer. Put it down to experience and get the house back on the market asap at a market price.
As it stands your son still owns his house and I would take the advice of your sons Conveyancer. Put it down to experience and get the house back on the market asap at a market price.
It is a nightmare. I understand from the conveyancer (who I happen to know), that the deposit has been found (somehow), by my nephews buyer and contracts have actually been exchanged. It's the fact that completion cannot happen until the person at the bottom of the chain gets his funds, and no-one want to wait for this to happen to move. It seems to me a very risky undertaking, if the buyer at the bottom of the chain doesn't after all get his funds, the contracts will all fail and they'll all be in breach of contract.
It was more the fact that this person told lies about his status as a buyer, and what no one can quite work out is how he showed a bank statement with £115,000 in his account, and now, 4 months down the line he has no money and has to sell in order to buy my nephew's house.
Somebody somewhere has done something wrong. Either he didn't have the money and lied that he he had. Or he did have the money and it's gone somewhere, goodness knows where.
Either way, my nephew sold a house, for £5000 less than the asking price, solely on the basis that this person had cash, and no chain. And then reduced the price again, which he most certainly would not have done if he had known that this person was having to sell in order to buy his house. At that stage, when the the survey issue came up, he would have withdrawn and put it back on the market. Now they are so far down the line they are tearing their hair out. As also is the conveyancer!!
It was more the fact that this person told lies about his status as a buyer, and what no one can quite work out is how he showed a bank statement with £115,000 in his account, and now, 4 months down the line he has no money and has to sell in order to buy my nephew's house.
Somebody somewhere has done something wrong. Either he didn't have the money and lied that he he had. Or he did have the money and it's gone somewhere, goodness knows where.
Either way, my nephew sold a house, for £5000 less than the asking price, solely on the basis that this person had cash, and no chain. And then reduced the price again, which he most certainly would not have done if he had known that this person was having to sell in order to buy his house. At that stage, when the the survey issue came up, he would have withdrawn and put it back on the market. Now they are so far down the line they are tearing their hair out. As also is the conveyancer!!
I agree with Aunt Lydia (love the name although perhaps I shouldn't!). I would want an explanation from the estate agent as well. Although having done a bit more reading, apparently 'cash' buyer doesn't actually have to mean the buyer has 'cash'. How mad is that.
It can mean the buyer doesn't have to get a mortgage and can fund the sale from the sale of another house. A friend of mine has sold a house in Brighton, and intends to buy up north. After her mortgage is paid off she will then be able to buy outright. She can present herself as a cash buyer, even though her house conveyance is not yet complete and anything could go wrong.
what is wrong is the whole buying and selling system in this country. We bought a property several years ago in Florida and it was all signed up and watertight right at the beginning. all the events that might cause you to back out were agreed at the outset, and couldn't be just because you'd changed your mind. I think its somewhat similar in Scotland. If they can do it then so can we.
It can mean the buyer doesn't have to get a mortgage and can fund the sale from the sale of another house. A friend of mine has sold a house in Brighton, and intends to buy up north. After her mortgage is paid off she will then be able to buy outright. She can present herself as a cash buyer, even though her house conveyance is not yet complete and anything could go wrong.
what is wrong is the whole buying and selling system in this country. We bought a property several years ago in Florida and it was all signed up and watertight right at the beginning. all the events that might cause you to back out were agreed at the outset, and couldn't be just because you'd changed your mind. I think its somewhat similar in Scotland. If they can do it then so can we.
Totally agree with you iloveglee. Before I retired I was in planning then estate agency and have seen this many times, although these days there is much more paperwork involved in proving identity and ability to pay.
The scottish system is in line with many other countries, including the USA & Canada in that an accepted offer is a legally binding contract, virtually eliminating 'gazumping' and 'chains'.
Unfortunately buyers take the pee. They make you a wonderful offer then just before Exchange find reasons to lower that offer. Its happened to me personally and I can empathise with your nephew that you just do lower the price because you want the thing sold. I hope things are resolved and your nephew can purchase his new home.
The scottish system is in line with many other countries, including the USA & Canada in that an accepted offer is a legally binding contract, virtually eliminating 'gazumping' and 'chains'.
Unfortunately buyers take the pee. They make you a wonderful offer then just before Exchange find reasons to lower that offer. Its happened to me personally and I can empathise with your nephew that you just do lower the price because you want the thing sold. I hope things are resolved and your nephew can purchase his new home.
Thanks for that AuntLydia. It looks to me that anyone can set themselves up as a cash buyer as there doesn't seem to be any legally definitive interpretation of what this is.
I am not at all sure if my nephew's estate agent exercised due diligence when establishing their buyers financial status. They certainly, apparently, had sight of a bank statement, but whether they went as far as making sure that this person did in fact sell a house, I don't know. I'd be concerned about money laundering when a bank statement appears with a significant sum in it. Especially if this person does not demonstrate where it came from. But again, was he asked. I think my nephew has some questions he should be asking his estate agent.
What has happened today I don't know. I do hope they all saw sense and decided not to make any moves. They all appear to be very desperate to make the move but risking the whole thing falling apart, and then being in a situation where you're living in a house that you cannot then get the money to buy is risky indeed. I hope he saw sense in the end.
I am not at all sure if my nephew's estate agent exercised due diligence when establishing their buyers financial status. They certainly, apparently, had sight of a bank statement, but whether they went as far as making sure that this person did in fact sell a house, I don't know. I'd be concerned about money laundering when a bank statement appears with a significant sum in it. Especially if this person does not demonstrate where it came from. But again, was he asked. I think my nephew has some questions he should be asking his estate agent.
What has happened today I don't know. I do hope they all saw sense and decided not to make any moves. They all appear to be very desperate to make the move but risking the whole thing falling apart, and then being in a situation where you're living in a house that you cannot then get the money to buy is risky indeed. I hope he saw sense in the end.
It seems that my nephew's buyer has lied. He was selling a house, and put himself up as a cash buyer on the basis it was due to complete a few weeks later. It never did, he then had to put the house up for sale again, and changed solicitors so that they wouldn't know.
If they had known way back in May they would have said they were not prepared to make a reduction on the asking price based on him being a cash buyer. So he has strung them along, taken them down to the wire and hoped it was too late for them to say we're out of here. exchange of contracts has not taken place because the solicitors of the seller at the bottom of the chain are not communicating.
As has been said, total nightmare.
If they had known way back in May they would have said they were not prepared to make a reduction on the asking price based on him being a cash buyer. So he has strung them along, taken them down to the wire and hoped it was too late for them to say we're out of here. exchange of contracts has not taken place because the solicitors of the seller at the bottom of the chain are not communicating.
As has been said, total nightmare.
AuntLydia you are right. He has been duped, mainly because no-one actually explained that a cash buyer is not exactly a buyer with cash to hand. This is the first time he has sold a house. Although to me, being a cash buyer means, I have cash. Like now. The buyer was the one who kept saying I have cash, I want and can get this done quickly. We still don't know how this person managed to convince the estate agent that he had £115,000 in his bank already.
The estate agent has not been as informative as he might have been I think, but the buyer has out and out lied, to everybody. He didn't sell his house in April, the basis upon which he was buying my nephew's house, as a cash buyer. But instead of coming clean, and saying my house sale fell through, and risking either losing the purchase, or being asked for more for my nephew's house, he has taken the re-sale of this house to a different solicitor so no-one was aware of this until this week.
If I was my nephew, I would be doing exactly as you have said to do. Unfortunately they are desperate not to lose the house they are buying. Plus, this is not the best time to be putting a house on the market, just before the winter. To be honest, the house they live in is really nice, yes the road they live on is a little busy and they have a small child. But she is only 2 and it's going to be years before she would be allowed on the front anyway.
But people do what they want to do, sometimes against all best advice, some of it professional. I just hope that, if they are insistent on this chain remaining intact, they all hang tight until the person at the bottom gets his money, and don't make any moves that could land them, potentially into difficulty. The problem is that they are ALL desperately keen to make the move, there is no one of them saying hold on a minute, let's be cautious here.
We have all explained that if this person at the bottom of the chain doesn't after all get his money, the whole chain will collapse anyway, and they will all be back where they started. For my money I'd bite the bullet and do it now.
The estate agent has not been as informative as he might have been I think, but the buyer has out and out lied, to everybody. He didn't sell his house in April, the basis upon which he was buying my nephew's house, as a cash buyer. But instead of coming clean, and saying my house sale fell through, and risking either losing the purchase, or being asked for more for my nephew's house, he has taken the re-sale of this house to a different solicitor so no-one was aware of this until this week.
If I was my nephew, I would be doing exactly as you have said to do. Unfortunately they are desperate not to lose the house they are buying. Plus, this is not the best time to be putting a house on the market, just before the winter. To be honest, the house they live in is really nice, yes the road they live on is a little busy and they have a small child. But she is only 2 and it's going to be years before she would be allowed on the front anyway.
But people do what they want to do, sometimes against all best advice, some of it professional. I just hope that, if they are insistent on this chain remaining intact, they all hang tight until the person at the bottom gets his money, and don't make any moves that could land them, potentially into difficulty. The problem is that they are ALL desperately keen to make the move, there is no one of them saying hold on a minute, let's be cautious here.
We have all explained that if this person at the bottom of the chain doesn't after all get his money, the whole chain will collapse anyway, and they will all be back where they started. For my money I'd bite the bullet and do it now.
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