House Purchase About To Finalise And Sellers Asking For More Money.

[Jenarry]

Just curious as this is happening to someone else(poor beggars.)They are selling and buying a house and it's all due to exchange on Friday but suddenly yesterday the vendors solicitor was in touch saying that the house has been undervalued and they need more money for it so they are going to get house valued again and that they face losing the house if they can't pay the required amount.
This doesn't sound right to me especially at this late stage . They have signed contracts,etc and they are just at the final hurdle ready to move on friday and the people buying from them are too.
The house was the property of someone who has passed away and has left a lot of debt for his siblings. the house had been on the market for 2 years and apparently they think it has been sold below value and the figures don't add up to pay debts and remortgage amount.

[Peter Pedant]

someone else
well if it is england then if they really have exchanged contracts then their solicitors can enforce the sale at the 'agreed' price
that is it is a bit late for gazumping....
also - - the other side contacting the buyer and not the buyers solicitor sounds odd
but .... if it as you say

after exchange of contracts the only reason to invoke 'return of contracts' is question as to title
( I know the right trigger phrases as it occurred to me)

[bhg481]

Sounds like contracts signed but not yet exchanged, Peter. The temptation is to call their bluff - if they put the house back on the market for a higher price there's no knowing when a sale will take place, as a whole new chain will need to be created.

[Flonska]

Under the law, an offer to buy or sell a property is not legally binding in England and Wales until contracts have been exchanged.

Although it appears that the contract may have been signed, it does not make it binding until there is an exchange of them – i.e. that the two parts of the contract are physically exchanged, or the solicitors agree with each other by telephone that the contracts are deemed to be exchanged. At this point, the contract becomes legally binding to both parties. You appear to suggest that contracts have not been exchanged yet.

Both parties and their solicitors, in particular, should get together to find a resolution to the problem that has arisen so that the transaction can proceed rather than cancelling since costs may have already been incurred and may not all be recoverable.

[Peter Pedant]

well the seller has made statements on which the buyer has relied - and suffered loss
so I would call the whole thing off and sue for costs

[Jenarry]

thats what I think, that they are going have to start all over again but I guess the family have nothing to lose if completing on this purchase will just leave them out of pocket as the sale price doesn't cover the deceased person's debts.

[pixie374]

Surely if the estate doesn't cover the debts, there is nothing more the family can do anyway? They don't have to pay them off themselves.

[Gizmonster]

Personally, I'd call their bluff and threaten to pull out of the sale.
If the house has been on the market for 2 years (presumably at the agreed sale price, or possible higher), what's the chance of them selling it for a higher price ...... especially as the market hasn't risen recently ??

[cassa333]

They are banking on you being desperate to exchange as you will also have difficulty with your purchasers.

If you are able to walk away say that is what you will do. Call their bluff. If you and your purchaser are in th same boat at the next of the day you will be out of pocket by legal fees etc only rather than paying over the odds for your house as well.

[237SJ]

Would the siblings inherit the debt? I'm not sure that they would. The same thing happened to my Uncle when he sold his newsagent's business. He called their bluff and they backed down

[david small]

Our system sucks big time.

[Buenchico]

Nobody can 'inherit debt'. The debts of a deceased person must be paid from their estate. If the debts exceed the value of the estate then the creditors simply won't get paid.

HOWEVER (and this might be particularly relevant here) the executors of an estate have a legal duty to ensure that all debts are met where it's possible to do so, and legal action can be taken against them if they fail to fulfil that duty.

As an example, let's assume that someone dies, leaving nothing but a house worth £200k. He also leaves debts of £150k. A family member wants to buy the house but offers only £100k for it. The executors aren't allowed to sell it to him at that price, pay off £100k of the debts and then say to the remaining creditors "Tough luck, guys, there's nothing left in the pot". (If they do so, they can then be personally pursued for the remaining £50k, because it's their fault that it wasn't enough money available to pay off all of the debts).

So the executors of an estate are legally obliged to seek the true market value of a property when selling it to pay off debts. In the case referred to by Jenarry, it could be that (late in the day) the executors have been made aware that they were about to sell the house for less than it was worth, leaving creditors out of pocket (and putting themselves at personal risk of having to meet the shortfall).

Alternatively, of course, they could just be greedy bar-stewards!

[zebo]

I've heard of this happening before with certain purchasers, the family who bought our house were awful, wanting all kinds of unusual payments, we had to insure the house until completion rather than up to exchange which is the norm, even coming back to us for stuff after the move, we ignored them and they stopped. Surely the house has been valued for the sale so expecting more at this late stage is trying it on, call their bluff.

[Baldric]

PP @ 17:33
///if they really have exchanged contracts then their solicitors can enforce the sale///

Peter, read the OP

///it's all due to exchange on Friday///

[EDDIE51]

The return of Gazumping ?

[Peter Pedant]

BC's frr'instance is a clear fraud on the creditors
and I seem to remember the tax man demands valuations for sales within the family ( at arms length etc)

the executors of an estate are legally obliged to seek the true market value of a property when selling it to pay off debts.
but it has been on the market for two years so that it doesnt seem undervalued - and dont judges say 'ok well sell at auction'

when my neighbour was arrested and went to prison ( droogz of course) I wrote to the commissioner in bankruptcy ( POCA and all that stuff - selling property and the govt pocketing the money ) and said I was interested in bidding for the contiguous property ( = "I will pay more for a property that adjoins mine" )

and got a really snotty reply - I am oobleeged to find the best price for the property
[ erm yeah well sell to me and you get more, dimwit]
and so it will offered on the market in its own time and I have no intention of telling you when or who with
[ in case you bid more]

I couldnt believe my eyes at his stupidity

so yeah on paper - trustees are supposed to get the right price
and so some really dim things in so called furtherance

[Flonska]

I am curious about the reference to a "remortgage amount." Maybe one of the beneficiaries under the Will was joined in on the deed for the loan or stood as guarantor? In which case, the mortgagee may have notified them that they intend to pursue them for the outstanding amount and this may have panicked them into re-evaluating the position?

[Peter Pedant]

.// PP @ 17:33: if they really have exchanged contracts then their solicitors can enforce the sale. Peter, read the OP
///it's all due to exchange on Friday///

I did

//and they are just at the final hurdle ready to move on friday and the people buying from them are too. //
is a sign of completion and not of exchange
no one ever moves on exchange - they only do so on completion
[ and yes I have had problems with the money not coming thro on the nail - twice!]

(exchange and complete on the same day - not something this story makes me ever want to do)

[Baldric]

or understand, by the look of it

[hc4361]

The vendor solicitor should be going through the buyer solicitor, not contacting the buyer directly.

[Peter Pedant]

well its saturday
so ----- what happened ?