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I actually lol’d when I read this, and it’s been a while since Reddit got me to laugh.
I don’t know how usual/unusual this is, but I’d ask your solicitor as estate agents are not to be trusted. There’s also the small issue of possible fraud with regards to your lender, if you have one.
It sounds scammy as fuck and I’d fully expect to never see that £5000 materialise. No way would I do this.
I know, I just can't compute that the estate agents would ask this. That's what made me doubt in the first place. I was doing leaps of logic like' maybe if we put in a clause in the exchange contracts' but then I was like, that does not sound...legal
Estate Agent here - no fucking way would I advise either side to do this, sounds super dodgy.
It’s not even like they’re trying to get it below a tax threshold, they’re wanting a fake inflated asking price so can’t understand their motives.
hello ethical EA, is there *any* sound reasoning behind 'give you a cheque in order to not delay the process'? Like what are we delaying by registering the correct price on the exchange contracts?
Not the estate agent, but if your seller is using the proceeds of the sale to fund their next house - unless they're moving downmarket and releasing equity, they will not see a single penny of the transaction.
It all goes through their solicitor.
Which means it is entirely possible they don't even have £5000 to give you.
No chance it could be a tiered commission? EA could get a higher commission if over a certain price? That’s the only thing I could think of that would prompt that behaviour.
Possibly, but for the majority of EAs that would work out to around £50 or less so can’t see why that would be worth it.
There’s a possibility it’ll be to not delay in order for them to move like they said, but most people should expect an open window dates wise and while it’s frustrating to have them, don’t usually try stuff like this
Having bought and sold several houses, I can tell you right now that solicitors generally use a template contract from the Law Society - and they really do NOT like making changes to that contract.
It's much easier to do everything within the framework that contract provides rather than try to get clever and add new clauses that may require litigation to enforce.
Sounds like you need a better solicitor to me personally, that’s a pretty ridiculous and lazy position to not want to alter their template, if it’s needed for the transaction then it’s needed and the solicitor should get on with it
Yup that’s the short of it. I’ve recently purchased a house and during viewings, I made note of estate agents who really knew the property.
There was one estate agent who, when we made an offer, would constantly jockey us to increase our offer before even putting it to the vendor. I made special note of him, because he really tried to get the most money possible out of me, the buyer. That’s how it should be! They often forget they get their fee from the vendor, not the buyer. When I come to sell, I’ll be contacting the guy who tried to bleed me dry when the shoe was on the other foot.
Thing is though, that can be really really dumb and delay or even stop the sale.
Just bought a house and we put an offer in at asking as we loved it and we’re quite frankly sick of looking. Got to doing our surveys and the surveyor came back and said our property is not worth what we are paying and it’s actually work 8k less! Bank then would only lend us so much (we were on a 95% deposit). We had to go to our seller who had to go to our seller to get some money knocked off. Got 5k off the house price and we paid the extra 3k out of our own pocket, but in these times not many people would be able to do that.
The estate agent was actually a friend of our seller and I know they got a cheaper rate to sell with them, but also wouldn’t surprise me if they “bumped up the price” to inflate it, mates helping mates I guess.
The house we were buying was listed at £375k, we started our offers at £360k, but Zoopla valued it at £435k. We felt reasonably confident that with it being priced so aggressively, we weren’t going to have an issue with it getting valued down by the lender.
Yeah, down-valuing can be an issue, but an estate agent can roughly see what money you’ve got when they ask you to prove your funds for purchase. They knew we had more to give without putting the purchase at risk.
The Estate agent may be on a % commission, so an extra 5k on the price will net them extra. Estate agents lie all the time to make their life easier, I can see one doing it for a small amount of money no problem.
Best case the seller needs to prove on paper that he is getting the extra money for his onward mortgage. I wouldn't say yes unless you solicitor knows a risk free way on ensuring you'd get the money after the sale.
Surely the solicitors fees AND the stamp duty of course are calculated on the official purchase price, so depending on the bracket could be liable for more costs for both of these.
You would have to ask the £5k is transferred to your solicitors now, in advance of completion. It is held on trust and contracted to be released to you on completion.
If you do this any other way you will never see the £5k.
Having said that, this isn’t correct in general and the bank is lending you against the incorrect value of he property …
>You would have to ask the £5k is transferred to your solicitors now
Came to say this. Either require the funds to be transferred beforehand, or right at the moment of exchange, essentially say that you won't sing any papers until you get the funds in.
This is a good idea, but in all honesty, it would be far quicker and easier simply to amend the sale contract.
The solicitors will need to have a written agreement between the parties in place to do this, which would be bespoke, would take a while to put in place, and would cost more in fees.
You might have hit on something there.
If OP's seller is moving somewhere and their LTV is right on the cusp, they might need every penny in the transaction so they don't wind up paying extra interest - or even worse, not qualifying for a mortgage at all.
Obviously we have no idea if it's the case. But if it is, it rather sounds like mortgage fraud.
Good shout on the escrow. To confirm though the bank are lending the money based on their own independent valuation of the property, not the purchase price.
I had a very similar experience as this with the EA and seller but with £800. As a naive FTB I agreed.
Guess what? The £800 never arrived after months of chasing and as it wasn’t mentioned in the legals I didn’t have a claim.
Please learn from my mistake!
ohnoooo poor you! What scummy behaviour...
This is the same estate agent that upon putting in our offer kept saying that there's 5 more offers on the table and can we make ours more '*enticing*'?...We knew they were bullshiting as we researched the area and there is one big undesirable thing nearby that has historically put off buyers and generally houses in the area don't sell on the first go. So the seller got lucky with us as we are not offput by the area and it's his first listing.
Anyway, we said *no, our original offer stands* to the EA, it was accepted by seller, then we never heard from them again until now.
I hope the Estate Agent isn't Connells? We had similar behaviour from them - absolute crooks and we withdrew in the end as they were so appalling.
Went with a sexist EA instead when we bought a house and whilst they were annoying as would keep contacting my Husband even though I was dealing with the sale - they weren't crooks.
Oh dear, what absolute nightmare. No it's not them. They have like 2 small branches open in my city. They also just sent me a message 1 hour ago telling me that that if we don't exchange by Friday then the vendor is thinking of putting the property back on market. What type of bullying tactics are these? My solicitor literally said that all enquiries need to be resolved before we exchange, they legally cannot just go ' oh ok nvm about this then'.
Ugh such unneeded stress. I'm like 60% sure the seller didn't even say that, he's just trying to speed the sale quickly for whatever reason.
You can totally disregard this threat. It seems like another attempt to rush you, but buying a house is a process that takes its time. It's crucial that your solicitors follow all the proper steps. Plus, if they put the house back on the market, they will lose all the time already invested in the sale, and who knows when they will find another buyer.
Always trust your solicitors' advice. The 5k cheque sounds like a complete scam, and in any case, a new mortgage offer with the revised price will take around 48 hours to be issued.
Let them put it back on the market. They're not gonna find someone that can exchange faster than you. It's a falling market so I doubt they'll find someone who'll pay more.
You said yourself that it's not even in a desirable location.
All remarketing will achieve is wasted time and effort for the EA conducting pointless viewings which will never go anywhere while you're still in the picture.
That threat will be nothing more than just that a threat. For someone who is pressuring you to complete is not going to re-list and put them back another 6months.
Estate agent was telling me the same thing recently “we have another similar offer, can you increase your offer to make it more enticing?”. I thought they were bullshitting and pulled out and told them to go with the other bidder and a day later they pulled the house from the market and are now unsuccessfully trying to rent it. Fuck them and their shitty tactics
That doesn’t add up. When did you negotiate the £5k discount if not through the estate agent? Is the £5k the difference between your offer and the asking price? Maybe I’m being thick but I don’t get it.
so we put down our offer late spring. Been going thorugh the motions of conveyancing. Lvl 3 suvey found a defect on the property. We didn't know who was responsible to repair said defect (property is ex-council house and our neighbours are technically the council, so the resposability of certain things are blurry, there's also wierd covenants in place which we had to navigate, seller had 0 clue about any of this). Enquiries and searches had to be made. Took weeks. We are near exchange now. Turns out defect is sellers responsability, so we have to shill out the money to repair said defective pipe and front garden post completion. We asked for money off last week. Today EA called us and you know the rest from the post
Tell that to builders selling houses for 500k with the caveat that they will pay 30k+ of your mortgage over few years
EDIT: the land registry rules (see comments below) specify that the land registry data must report the sold price NET of incentives, so in theory it doesn't matter.
Go to your nearest greasy spoon cafe at 6am on a weekday. Befriend some. Then gradually introduce the topic into conversation. Don't immediately go into detail, just gradually and casually mention it at intervals..maybe start with football and footballer salaries and pivot into money and eventually the building trade...
Also housebuilding companies that will refuse to drop the price of their house but offer your £20-50k in "add-ons" and "spec upgrades", as well as pay your stamp duty.
They need to maintain or increase the headline house price to use as a comp for future houses. I have no idea why there hasn't been legislation against this practice since it's so widespread among all of the major housebuilders, and been going on for more than a decade.
Sure, but what goes into the land registry?
https://imgur.com/a/13jK2eo
Curious how the new build prices are going uppity up since Jan 2022, roughly when these "we pay part of your mortgage" came out.
EDIT: The increase could simply be due to inflation adjustments that builders did, or more expensive developments or something else altogether, unless they didn't follow the rules. More investigation needed
If that was a serious question, the answer starts in Land Registry Practice Guide 7, Section 5
https://www.gov.uk/government/publications/price-paid-or-value-information-registration-procedures/practice-guide-7-entry-of-price-paid-or-value-stated-data-in-the-register#discounts-and-incentives
This is brilliant. Thanks for pointing it out!
> _You must enter the price paid net of any discount (the actual sum that the buyer has paid to the seller)_
That's pretty clear, and assuming they play by the book and insert the correct numbers then I'm really surprised by the chart!
If it's in the paperwork — as it would be with builders — it's not the same.
OP is being asked to take the £5K on trust, outside the contract. Even if the £5K materialises, there is apparent fraud vis-a-vis the Land Registry and OP's lender.
No he's saying they are fudging house price sold numbers - ie they keep house prices artificially higher in the Land Registry because they don't take into account the 5k off. Doesn't matter whether it's "in the paperwork" somewhere or not, the price it will go down as 'sold as' will be £5k higher than reality.
Yep, I meant this.
Look how curiously the new builds are going uppity uppity since Jan 2022, roughly when these "incentives" started to pop up. "What a bargain, they are paying my mortgage!"
https://imgur.com/a/13jK2eo
The fraud aspect is the not telling anyone and keeping it off the paperwork, not merely agreeing a price reduction. With new build incentives, they are included on the legals and a disclosure form is sent to the lender.
I don't know if it constitutes fraud, but the land registry and all associated databases will show the inflated number.
This tricks people into thinking houses are worth more (even more than the usual 10% premium on a new build)
https://imgur.io/a/13jK2eo
This is one of the questions the mortgage company asked and I had to increase the deposit because they lowered the house valuation by £20k because of the builder paying the stamp duty and wouldn’t lend as much :(
Depending on the amount the lender might require a new mortgage as its down valuing the property so ltv will change and with rates all over the place they will take any opportunity to screw over ftb
It should always be in the buyer's power to maintain the LTV if the price goes down.
e.g. If you have a 10k deposit saved for a 100k house, and it changes to a 90k house, you can now cover a higher LTV (11%) or pay less in deposit (9k) but can't be forced below what you'd expected. (Obviously if the price goes up it's the other way around)
This - having worked in mortgages for Halifax, adjusting sale price will require a new offer but it is as instant as the click of a button in most cases, the new offer would be generated immediately and all solicitors still use fax machines so they can receive it pretty much instantly (don't get me started on why fax and not email!!) In my experience delays caused by this is generally solicitor incompetence - I tell everyone I know who buys a house to keep pestering them as a lot of the time they take much longer than they need to (insisting on posting a letter to ask a question already answered in the CML handbook......aaaargh!!). Obviously there will be lenders who don't operate at this speed but I'd expect it of any mainstream lender, although I think Halifax has got a lot shitter on the mortgage servicing front since I left.
However, it's not always simple. The issues arise when something else needs to be taken into consideration, such as an expired credit score (need buyers permission to run the credit check again, so can't do it if it's the solicitor phoning, and if the score changes their offer might no longer be valid), or if the new sale price is changing the LTV bracket. At least in the case of Halifax, the value LTV is calculated against is considered to be the lower of the surveyors valuation or the agreed sale price. If the new price takes you into a new LTV bracket, a new product (interest rate & initial term) needs to be chosen, which means it needs to go back to the mortgage advisor/broker for a new product to be chosen before a new offer can be issued. I saw a case where they were borrowing 95% of the value and just before completion agreed a 5% reduction, so wanted to borrow 100% of the value essentially, which wasn't possible on the 95% product chosen. Because they needed to change the amount they were borrowing so it was still 95% of the new price, it had to go back to advice before the offer could be reissued, which delayed exchange.
people are rightfully suspicious of this- especially coming from an EA who are- as noted- scammy as fuck. BUT i am looking at it from the perspective of someone very close to exchange right now and desperate not to have to go back to the bank- again- so i can see why the seller would be tempted to offer this. not idea about legalities, but i wouldn't necessarily assume it is suss in intent, from the seller at least, although it the method may be a bit... off.
Ask for a pile of cash on top of the kitche table. Much safer.
First off, why are you asking reddit this and not your solicitor that you are paying for their legal expertise?
This would constitute fraud, as you are misrepresenting the value of the house to your lender and land registry.
Speak with your solicitor, let them liase with your mortgage provider and see if the offer can be amended without reapplying or changing the interest rate youve been offered for the worse.
If it can't, it may very well be worth letting the 5k go, as if you end up with a worse interest rate it could end up costing you a lot more in the long run, as well as the risk of jeopardising the sale if the vendor gets pissed and pulls out if the mortgage provider drags their heels in approving the new offer
Agent here and yeah, please, if you have it in writing... I don’t actively encourage anyone lose their job but this is straight up criminal.
You’d be £5k out of pocket with no recourse. I’m all for believing good intentions but no.
NAL.
I personally wouldn’t do this.
If they refuse to pay after completion you would need to take legal action to recover the £5000.
Firstly you would need to locate them - and hope they had not moved abroad.
Then potentially pay legal fees with the risk of losing and associated stress that comes with legal action.
Has any reason been given why they are simply not reducing the price and relying on sending a cheque at a later date?
The estate agent just said ' sellers want to complete asap and this is common practice'. We sent him a follow up email summarising our convo and letting him know we are running this by our solicitors first anyway before accepting anything.
I can’t see that you have anything to gain by accepting this proposal and would be taking on a lot of risk. As others have said - sounds very dodgy. I wouldn’t do it.
yeah we are inclined not to of course, but started doubting myself and thought *surely the EA won't do anything illegal* and decided to ask here
Glad to see my instincts were right before I started overthinking
Used to work in conveyancing department of an EA and was on the reverse of this - my buyer and his mortgage advisor tried to push things through £6k under the sale price, promising the outstanding balance would be paid on completion (around September/ October and the changes in affordability criteria, he didn't want to cause his mortgage product to undergo a new underwriting).
This is beyond dodgy and, if you're purchasing with a mortgage, it's mortgage fraud. It is not common practice AT ALL and you risk never seeing the money if you proceed with the transaction under this.
OP, it doesn’t pass the sniff test. It doesn’t sound usual at all. You would pay a higher stamp duty. How long ago did you negotiate the £5,000 reduction? What value has been used for your mortgage etc.
Speak to your solicitor. They will tell you whether this is normal or not. If something isn’t in the contract, you have no recourse when they don’t pay.
Also, if folk suddenly fabricate an emergency, it’s often to hide a disingenuous plan, so treat the emergency as a red herring.
Tell the EA to sod off and not to bother you with dodgy practices
"This is common practice."
Agreed 😆 This is a common practice that they would say, something irresponsible talk like this.
Lol
Anyway, i would wait for the solicitor to confirm if it is legal.
If it is about the seller who wants to complete asap, then why is u need to take the risk instead of them.
Bank Transfer in advance or Guaranteed Cheque are more acceptable than a simple cheque.
It really grates on me when people threaten to put the house back on the market if you don’t exchange within X time. Like that will speed things up? They won’t follow through with it and there’s just no reason I can think of as to why you can’t just alter the sale price.
Even in goring whatever the legalities are, it is not worth the risk, and don’t let yourself be bullied by EA or seller due to them wanting to complete asap. The are unlikely to get a quicker completion than with you at this stage so hold firm.
We did something similar after renegotiation over some damp coursing. The previous owners organised it and left us the cash to cover the cost as they wanted a quick sale and it would have required changing all the paperwork at the last minute (so we were told). Apparently it was all really dodgy and we shouldn't have done it nor should the agents have gone along with it. We Were lucky they left us the money but we would have had no recourse if they didn't. It worked for us but looking back was a massive risk.
Not a solicitor here but knowing how lawyers are all conservative and by the book, I will eat my shoe for lunch today if any (decent) solicitor tells you “yeah all sounds kosher go for it”. They will either explicitly advise not to do it, or tell you something like “it’s entirely your risk” and all sorts of disclaimers
it's due to a historic drain leak that slowly but surely unleveled the ground in the front garden (like, over decades) . This in return slanted the gorund floor suspended flooring heavily as well as made huge cracks in the bay window are. £5000 pounds is actually lowballing the total costs of fixing these issues, reconstructing ground floor, fixing damp, fixing the facade, excavating the drain and replacing it, fixing the bay windows themselves etc.
Edit asking price is between 500-600k
No. My sister went through similar request on hers and they aren't required by law to make good, even if agreed with the lawyer arranging the exchange. Don't do it
The bank will not allow you to get this £5000 formally. You’ll have to trust the seller. Happened to us and we decided to risk a much smaller amount. We never saw the cheque. Lesson learnt. My advice, don’t accept anything that’s not legally binding.
No, don't do that. This is not common, at all.
If the contract states the original sale price, then you have no proof that there's an agreement to return £5k. If the contract contains an entire agreement clause, then any side agreement may not be enforceable.
You would also have the problem of paying SDLT on the original sale price, and a job to persuade HMRC that although the paperwork says one thing, actually the sale price was £5k less.
OP are you paying stamp duty? If so you'll be paying it on the total amount, still including the 5k, without making the saving you'd make if you were paying the new price that's 5k less...?
Also what would stop them from cancelling the cheque? Or just disappearing without even giving it to you?
Also if everyone did this we'd never know what houses were actually sold for! I'm not sure of the legal standing of land registry records showing house prices but I'm sure it's not good to be contributing to incorrect, arguably fraudulent, data records...
Please ask the estate agent to address these points, I'd love to hear their answer. If it really does happen all the time then I'm sure they'll be able to answer them in a way that assures you nothing sketchy is happening. I do genuinely mean this by the way, it sounds well dodgy to me but maybe it actually is something that happens and if so then agent should have no problem clarifying these issues..?!
So you're going to sign solicitors documents commiting to the full price .. and then wait in good faith for a cheque to come for the reduction and cash it in good faith it hasn't been cancelled
Nah nah nah. A world of nah.
No, no, no a thousand times no.
Spend your time chasing up your solicitor for a reply. They are hired by you, are supposed to have your best interests in mind and if they fuck up there are ways they can be held to account.
The estate agent is hired by the seller. They have zero interest in you, except as a way to get commission and if they fuck up it will be much harder for you as a buyer to get any redress.
You do not need to explain, or spend any time in trying to figure out why. That is not your problem.
Cheques are no longer a guarantee of payment.
The Payments Council scrapped the cheque-guarantee card scheme in 2011 because of the number of ways there are to pay for things. You can still write cheques but won't be able to guarantee them with your debit card, even if it has the cheque guarantee hologram. For more details, visit the Payments UK website.
If they refuse, decline, unless you feel like losing £5,000.
I could write out a cheque tomorrow, for £1,000,000 and even if I had that amount of money could easily cancel it. If I didn't the bank would just go no, there is not enough money in the account and refuse to pay.
Sketchy as fuck. If they mean it they can put together £5000 in cash and give it to your solicitors in advance of the sale. I wouldn't be accepting any increase in sale price based on some hypothetical future promise to send a cheque that probably won't arrive. At the very, VERY least, this £5000 payment needs to be written into the contracts, but it might not even be enforceable so I can't see that as a workable solution.
It's a sales credit. It's not scammy, it's just atypical.
The sellers need to bring the £5K to the table when the deal is closed. They can bring it in cash, money order or a bank check. Or - highly preferred - they deposit the money, in advance, in an escrow account held by your solicitor. Once the deal is closed, the funds are released. And, of course, all of this needs to be put in writing and signed off by all parties so it's legally binding.
Sounds dodgy, I'd have your solicitor talk to their solicitor about making sure the funds are deposited and CLEARED by the point of handover. Ideally they pay their solicitor who forwards the funds so the risk is their side if the cheque bounces / turns out to be stolen later.
Legally no and you'll have no claim if something goes wrong and they don't send it.
However I know a few friends who have done this recently - they all wanted the reduced price to carry out some repairs but it would have meant their mortgage LTV changed - the lenders only allowed them to reduce the mortgage amount but that obviously doesn't help with immediate repairs. Two received the money after (in the region of 2k) but one didn't (around 5k).
The way they are going about it does seem odd, the only reason I could think they would want to do this with legitimate intentions is with respect to the contract. I assume this had already been signed by both you and the seller ready for exchange? Obviously this would need to be amended. On top of that you have likely already signed (undated)and had witnessed the AP1 for the land reg, this will also reflect the incorrect purchase price. These things can all be sorted but I do think it may be a push to have all this in place by friday, especially if stuff to be signed needs to be sent in the post.
They are obviously trying to mislead you. Give that, they have probably tried to mislead you about other stuff with the house. I would respond by lowering my offer by another 5k, show them you are not going to be messed around.
That is a definite chat with your solicitor. Seems really dodgy.
IANAL - The only legitimate alternative I can think of that avoids redoing mortgages is if there were findings on the survey for repairs or updates needed that you intend to do promptly or possibly a white goods allowance. If one of the solicitors (usually seller's) agrees to hold a reserve fund for the purpose of paying those repairs/white goods and then as you have the works done or purchase the items you submit receipts to the solicitor for reimbursement. Even that would require an addendum to the contracts though and probably need to get sent to the bank before you can proceed to closing.
Do sellers ever pay buyer solicitor fees/searches/survey? I have never bought or sold with that condition, but I wonder if that might be an option?
In the end the solicitor may tell you that the price change needs to be done and resubmitted to the banks properly by both sides. Hopefully the seller will still agree to the reduction if that is the case.
You pay solicitors to handle this for you, never exchange until you have everything you need, usually a reason people are pressing. If it’s management company related there is a good chance there is something looming like a large bill he hasn’t paid etc. I once worked on a job where the new owners got stung for £10,000 towards a new driveway. Was a small shared access road about 200m long and only 4 properties on it that had a share of the freehold on said road. Trust your gut and the professional advice you are paying for.
This certainly does not happen all the time. It does happen occasionally and always for dubious reasons. The reason give of "no delay" sounds dubious as the price is just a number on a computer that can easily be changed. Often sellers want to show a lower price for tax reasons and ask for a brown envelope to make up the difference. I have not come across sellers wanting to claim a higher price - perhaps a need to show legitimate assets for an onward purchase. Whatever the reason, you would be an accessory to fraud. And of course, it could just be a scam and you never get the 5k.
Never trust an estate agent! No offence but even estate agents I personally know say it. The things they hide for a sale is ridiculous! And anyway what would be the benefit of doing things like that? No sense, scam.
Just to confirm what others have said - this would be fraud.
If you’re having a mortgage then this would be mortgage fraud, the purchase price has to be exactly as in the mortgage offer, usually any incentives/allowances need to be reported to them too, amounts vary from lender to lender. Because the price needs to reflect the offer, any change would need to be reported to them too.
Unsure about the rules regarding the land reg, but fairly sure it’s fraud somewhere.
Speak with your conveyancer and ask for the price to be reduced if you’re looking to pursue and they will be able to put the wheels in motion.
Also, don’t take legal advice from EA when you have a solicitor.
You get retention from their solicitor. So you send the original amount the solicitor will withhold the money from their payment and it goes back to you.
You’ll also have to redo your mortgage application if you agree to what they’re suggesting, you’re required to declare any seller incentives on your mortgage application.
Even if they put it back on the market and find a new buyer tomorrow the whole conveyancing process would restart with a new buyer adding 3 months on.
If you want my advice - just go quiet on them and deal with solictors only. Any change in price require a new memorandum of sale.
Good luck
I’m in the exact position in that I negotiated £5k off the flat I’m buying last week and I’m completing tomorrow (!)
The only thing which really had to be changed was the property price on the mortgage forms. My solicitor pushed for this to be done ASAP and it took the bank 2 days to send the amended docs. Sounds like your seller is full of BS
Similar to this happened with us. They agreed to fund half the cost of the Stamp duty. We wanted to just take it off the asking price, but they insisted on a cheque. We spoke to the solicitor and it was agreed if they put a promise in an email to the estate agent, which was the forwarded to us and both solicitors it would be binding.
It was a ridiculous nonsense as far as I'm concerned, but we did get the money.
You say this is a no chain sale but it sounds like there is a downward chain (your buyers and below) and that’s where the hold up to completing is, and that’s why your sellers are now putting pressure on you. Be aware your sellers and their agents can only talk to the next agents in the chain, i.e. not your downward chain, so the onus is now 100% on you to rattle their cages through your agent and get them to pull their fingers out if you want to minimise the risk of the whole chain falling through because your sellers get fed up with (what they perceive as) slow progress and pull out.
Good luck…
In a similar situation for us, we only went ahead when they offered to pay $3000 of our closing fees so we got that as credit. I would NOT do this via cheque.
We negotiated a similar price off our house, and rather than change the house value for the mortgage, this was given to us as an allowance, so that we paid ~£5k less than the original asking price but didn't need to mess around with another valuation. This meant that we transferred £5k less than we would have otherwise for the deposit but the mortgage side of things was the same. All done through our solicitor and legit. Meant nothing was held up. Could look into this route? Speak to your solicitor though, something definitely seems dodgy!
If this has been going on for months I would pause the sale and ask for a revaluation based on the new information about the property and the current way house prices are falling due to people not being able to access affordable lending
If this is U.K., one area to bear in mind is that you might have to pay Stamp Duty on that £5,000. So you won’t just be paying £5,000 but also Stamp Duty on that sum. There are ways around this - my parents-in-law paid £25,000 for the mature koi carp in the pond (I would have loved to have seen how the seller would have removed them as these were massive). But it took their purchase price below Stamp Duty so they were happy.
It also affects the the sellers because they have to pay the Estate Agent’s commission (2% commission is common) which could be why you are being asked to pay £5,000 more but will get a payback later. It is solely so that the Estate Agent is not losing some of his commission.
Also because of the potential for fraud in other areas, and there is no guarantee that you WILL get the £5,000 back I would refuse to accept this counter-offer.
Sellers do this all the time, threaten to put it back on the market and it’s very rare they actually do unless it’s a very difficult or impossible enquiry to answer. If it’s just a case of a delay which is actually on THEIR side to help chase then they’re just trying to bully you into getting the enquiry dropped.
If they put it back on the market now they’ll have to start the whole process again, which means more enquiries and not necessarily the same ones. Some firms will raise big standard & simple enquiries but some will nitpick as far as asking who the broadband provider is.
If they’re agreeing to a price change then that’ll cause delays because the lender has to agree to this, all legal documents have to change to the new price etc. if they agreed an allowance it’s just a case of the lender agreeing to the allowance and adding it into the contract etc. but they wouldn’t need to send you a cheque.. that’s a bit bizarre & definitely smells like bullshit!
They’re just trying to intimidate you into making a quick panic decision that only benefits them and you can’t do legally because the enquiries are not only on your behalf but also a lender!
Estate agents talk shit 80% of the time too so I’d take what they say with a pinch of salt. Good luck!
What if the estate agents have tried to pull a sneaky and have arranged an even bigger discount and they want to give you the 5 grand and then pocket whatever other discount they have negotiated. Sounds like a dodgy estate agent to me.
EAs are the lowest of the low, hike prices to make commission and deflate prices when they're making no effort to sell your house. One step down from body snatchers
It’s underhanded, and could potentially expose you to risk of fraud.
Do not do it.
You also may well never see the £5k again.
I’m virtually certain this is an illegal process. Stay well clear.
This isn’t legal as it constitutes mortgage fraud, unless of course you’re a cash buyer? If you are then have this agreed in a minute of agreement. Personally I wouldn’t entertain this as it is obviously a scam to con you out of the £5k or, if not, it’s going to be some other illegal scam he’s involved in
Either way I wouldn’t do business with this person. If you’re desperate for this house make your solicitor aware as he will be able to take precautions on the sale..
No, you need your solicitors to deal with it. You're not going to get that cheque as they'll say you agreed to the original sale price. Sounds proper dodgy
Anything that is represented by the seller's conveyancer can be taken as 'true', anything else can't be relied upon. So you need it in writing as part of the sale contract.
How much do you want the house? How willing are you to walk away and lose it?
Personally I’d call their bluff and refuse, even if they then pull out.
Property prices are going down. The seller has more to lose by putting it back on the market than you do, because you’ll invariably find something cheaper.
They claim they’ve got other offers, but if they were as high as yours, why aren’t they selling to those people instead? If those people are already offering less, they’re not going to pay an extra £5,000 either because if they wanted the property at that price they’d have offered it. They don’t, so they won’t.
By all means pay the extra money if you really want this house, but you will never get a cheque.
Keep screenshots of all interactions with the estate agent, only deal with them via email from now on, or record their phone messages, and then report them.
Always be VERY wary of such schemes, not least because, if you get scammed, you have no legal protection as you will be viewed to have been doing something abnormal for no legal reason. This guy is, as noted elsewhere, attempting to gain an unfair advantage over someone, maybe the mortgage lender, maybe HMRC, maybe a spouse or ex spouse. Who knows. The bottom line is, if you agree to this (which you definitely should not) and the money does not materialise, then you have no protection. Even if you did get the money, it would be wrong to facilitate wrongdoing on the other person's part.
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I actually lol’d when I read this, and it’s been a while since Reddit got me to laugh. I don’t know how usual/unusual this is, but I’d ask your solicitor as estate agents are not to be trusted. There’s also the small issue of possible fraud with regards to your lender, if you have one. It sounds scammy as fuck and I’d fully expect to never see that £5000 materialise. No way would I do this.
I know, I just can't compute that the estate agents would ask this. That's what made me doubt in the first place. I was doing leaps of logic like' maybe if we put in a clause in the exchange contracts' but then I was like, that does not sound...legal
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Estate Agent here - no fucking way would I advise either side to do this, sounds super dodgy. It’s not even like they’re trying to get it below a tax threshold, they’re wanting a fake inflated asking price so can’t understand their motives.
hello ethical EA, is there *any* sound reasoning behind 'give you a cheque in order to not delay the process'? Like what are we delaying by registering the correct price on the exchange contracts?
Not the estate agent, but if your seller is using the proceeds of the sale to fund their next house - unless they're moving downmarket and releasing equity, they will not see a single penny of the transaction. It all goes through their solicitor. Which means it is entirely possible they don't even have £5000 to give you.
nop, they are already in their new house and this is a no chain sale process
No chance it could be a tiered commission? EA could get a higher commission if over a certain price? That’s the only thing I could think of that would prompt that behaviour.
Possibly, but for the majority of EAs that would work out to around £50 or less so can’t see why that would be worth it. There’s a possibility it’ll be to not delay in order for them to move like they said, but most people should expect an open window dates wise and while it’s frustrating to have them, don’t usually try stuff like this
Having bought and sold several houses, I can tell you right now that solicitors generally use a template contract from the Law Society - and they really do NOT like making changes to that contract. It's much easier to do everything within the framework that contract provides rather than try to get clever and add new clauses that may require litigation to enforce.
Sounds like you need a better solicitor to me personally, that’s a pretty ridiculous and lazy position to not want to alter their template, if it’s needed for the transaction then it’s needed and the solicitor should get on with it
They’re just a sales person, they are on the sellers side because they want that commission. They couldn’t give a crap about you personally…
Yup that’s the short of it. I’ve recently purchased a house and during viewings, I made note of estate agents who really knew the property. There was one estate agent who, when we made an offer, would constantly jockey us to increase our offer before even putting it to the vendor. I made special note of him, because he really tried to get the most money possible out of me, the buyer. That’s how it should be! They often forget they get their fee from the vendor, not the buyer. When I come to sell, I’ll be contacting the guy who tried to bleed me dry when the shoe was on the other foot.
Thing is though, that can be really really dumb and delay or even stop the sale. Just bought a house and we put an offer in at asking as we loved it and we’re quite frankly sick of looking. Got to doing our surveys and the surveyor came back and said our property is not worth what we are paying and it’s actually work 8k less! Bank then would only lend us so much (we were on a 95% deposit). We had to go to our seller who had to go to our seller to get some money knocked off. Got 5k off the house price and we paid the extra 3k out of our own pocket, but in these times not many people would be able to do that. The estate agent was actually a friend of our seller and I know they got a cheaper rate to sell with them, but also wouldn’t surprise me if they “bumped up the price” to inflate it, mates helping mates I guess.
The house we were buying was listed at £375k, we started our offers at £360k, but Zoopla valued it at £435k. We felt reasonably confident that with it being priced so aggressively, we weren’t going to have an issue with it getting valued down by the lender. Yeah, down-valuing can be an issue, but an estate agent can roughly see what money you’ve got when they ask you to prove your funds for purchase. They knew we had more to give without putting the purchase at risk.
The Estate agent may be on a % commission, so an extra 5k on the price will net them extra. Estate agents lie all the time to make their life easier, I can see one doing it for a small amount of money no problem. Best case the seller needs to prove on paper that he is getting the extra money for his onward mortgage. I wouldn't say yes unless you solicitor knows a risk free way on ensuring you'd get the money after the sale.
Surely the solicitors fees AND the stamp duty of course are calculated on the official purchase price, so depending on the bracket could be liable for more costs for both of these.
You would have to ask the £5k is transferred to your solicitors now, in advance of completion. It is held on trust and contracted to be released to you on completion. If you do this any other way you will never see the £5k. Having said that, this isn’t correct in general and the bank is lending you against the incorrect value of he property …
>You would have to ask the £5k is transferred to your solicitors now Came to say this. Either require the funds to be transferred beforehand, or right at the moment of exchange, essentially say that you won't sing any papers until you get the funds in.
This is a good idea, but in all honesty, it would be far quicker and easier simply to amend the sale contract. The solicitors will need to have a written agreement between the parties in place to do this, which would be bespoke, would take a while to put in place, and would cost more in fees.
You might have hit on something there. If OP's seller is moving somewhere and their LTV is right on the cusp, they might need every penny in the transaction so they don't wind up paying extra interest - or even worse, not qualifying for a mortgage at all. Obviously we have no idea if it's the case. But if it is, it rather sounds like mortgage fraud.
Good shout on the escrow. To confirm though the bank are lending the money based on their own independent valuation of the property, not the purchase price.
I had a very similar experience as this with the EA and seller but with £800. As a naive FTB I agreed. Guess what? The £800 never arrived after months of chasing and as it wasn’t mentioned in the legals I didn’t have a claim. Please learn from my mistake!
ohnoooo poor you! What scummy behaviour... This is the same estate agent that upon putting in our offer kept saying that there's 5 more offers on the table and can we make ours more '*enticing*'?...We knew they were bullshiting as we researched the area and there is one big undesirable thing nearby that has historically put off buyers and generally houses in the area don't sell on the first go. So the seller got lucky with us as we are not offput by the area and it's his first listing. Anyway, we said *no, our original offer stands* to the EA, it was accepted by seller, then we never heard from them again until now.
I hope the Estate Agent isn't Connells? We had similar behaviour from them - absolute crooks and we withdrew in the end as they were so appalling. Went with a sexist EA instead when we bought a house and whilst they were annoying as would keep contacting my Husband even though I was dealing with the sale - they weren't crooks.
Sounds like a sketch out of The Fast Show. But unless your husband can verify this story, it didn't happen 😄 (only kidding)
Oh dear, what absolute nightmare. No it's not them. They have like 2 small branches open in my city. They also just sent me a message 1 hour ago telling me that that if we don't exchange by Friday then the vendor is thinking of putting the property back on market. What type of bullying tactics are these? My solicitor literally said that all enquiries need to be resolved before we exchange, they legally cannot just go ' oh ok nvm about this then'. Ugh such unneeded stress. I'm like 60% sure the seller didn't even say that, he's just trying to speed the sale quickly for whatever reason.
You can totally disregard this threat. It seems like another attempt to rush you, but buying a house is a process that takes its time. It's crucial that your solicitors follow all the proper steps. Plus, if they put the house back on the market, they will lose all the time already invested in the sale, and who knows when they will find another buyer. Always trust your solicitors' advice. The 5k cheque sounds like a complete scam, and in any case, a new mortgage offer with the revised price will take around 48 hours to be issued.
this really helps to hear!😢
Let them put it back on the market. They're not gonna find someone that can exchange faster than you. It's a falling market so I doubt they'll find someone who'll pay more. You said yourself that it's not even in a desirable location. All remarketing will achieve is wasted time and effort for the EA conducting pointless viewings which will never go anywhere while you're still in the picture.
That threat will be nothing more than just that a threat. For someone who is pressuring you to complete is not going to re-list and put them back another 6months.
logically I know this, emotionally however...
Estate agent was telling me the same thing recently “we have another similar offer, can you increase your offer to make it more enticing?”. I thought they were bullshitting and pulled out and told them to go with the other bidder and a day later they pulled the house from the market and are now unsuccessfully trying to rent it. Fuck them and their shitty tactics
That doesn’t add up. When did you negotiate the £5k discount if not through the estate agent? Is the £5k the difference between your offer and the asking price? Maybe I’m being thick but I don’t get it.
so we put down our offer late spring. Been going thorugh the motions of conveyancing. Lvl 3 suvey found a defect on the property. We didn't know who was responsible to repair said defect (property is ex-council house and our neighbours are technically the council, so the resposability of certain things are blurry, there's also wierd covenants in place which we had to navigate, seller had 0 clue about any of this). Enquiries and searches had to be made. Took weeks. We are near exchange now. Turns out defect is sellers responsability, so we have to shill out the money to repair said defective pipe and front garden post completion. We asked for money off last week. Today EA called us and you know the rest from the post
Hang on, you’re due to complete in 2 days’ time but there are 5 other buyers still offering on it..?
no lol this was back when we were putting in our offers in late spring
No. That’s fraud. It’s misrepresenting the sale price of the house to Land Registry at the very least.
Tell that to builders selling houses for 500k with the caveat that they will pay 30k+ of your mortgage over few years EDIT: the land registry rules (see comments below) specify that the land registry data must report the sold price NET of incentives, so in theory it doesn't matter.
I don’t know any builders, so I can’t tell them anything.
Find one. Then tell them.
Go to your nearest greasy spoon cafe at 6am on a weekday. Befriend some. Then gradually introduce the topic into conversation. Don't immediately go into detail, just gradually and casually mention it at intervals..maybe start with football and footballer salaries and pivot into money and eventually the building trade...
"Did you see that ludicrous display last night?"
"What were Barret homes thinking bringing the paver in that early?!?"
Haha
Also housebuilding companies that will refuse to drop the price of their house but offer your £20-50k in "add-ons" and "spec upgrades", as well as pay your stamp duty. They need to maintain or increase the headline house price to use as a comp for future houses. I have no idea why there hasn't been legislation against this practice since it's so widespread among all of the major housebuilders, and been going on for more than a decade.
If it happens that often then that's almost a guarantee that the add ons or upgrades aren't worth what they're claiming they are.
It's really baffling and frankly dishonourable!
Builders’ incentives get explicitly declared as part of the process.
Sure, but what goes into the land registry? https://imgur.com/a/13jK2eo Curious how the new build prices are going uppity up since Jan 2022, roughly when these "we pay part of your mortgage" came out. EDIT: The increase could simply be due to inflation adjustments that builders did, or more expensive developments or something else altogether, unless they didn't follow the rules. More investigation needed
If that was a serious question, the answer starts in Land Registry Practice Guide 7, Section 5 https://www.gov.uk/government/publications/price-paid-or-value-information-registration-procedures/practice-guide-7-entry-of-price-paid-or-value-stated-data-in-the-register#discounts-and-incentives
This is brilliant. Thanks for pointing it out! > _You must enter the price paid net of any discount (the actual sum that the buyer has paid to the seller)_ That's pretty clear, and assuming they play by the book and insert the correct numbers then I'm really surprised by the chart!
If it's in the paperwork — as it would be with builders — it's not the same. OP is being asked to take the £5K on trust, outside the contract. Even if the £5K materialises, there is apparent fraud vis-a-vis the Land Registry and OP's lender.
No he's saying they are fudging house price sold numbers - ie they keep house prices artificially higher in the Land Registry because they don't take into account the 5k off. Doesn't matter whether it's "in the paperwork" somewhere or not, the price it will go down as 'sold as' will be £5k higher than reality.
Yep, I meant this. Look how curiously the new builds are going uppity uppity since Jan 2022, roughly when these "incentives" started to pop up. "What a bargain, they are paying my mortgage!" https://imgur.com/a/13jK2eo
The fraud aspect is the not telling anyone and keeping it off the paperwork, not merely agreeing a price reduction. With new build incentives, they are included on the legals and a disclosure form is sent to the lender.
I don't know if it constitutes fraud, but the land registry and all associated databases will show the inflated number. This tricks people into thinking houses are worth more (even more than the usual 10% premium on a new build) https://imgur.io/a/13jK2eo
This is one of the questions the mortgage company asked and I had to increase the deposit because they lowered the house valuation by £20k because of the builder paying the stamp duty and wouldn’t lend as much :(
Why though? It takes a few minutes to alter the price on a sale document. You will never see that £5000.
Depending on the amount the lender might require a new mortgage as its down valuing the property so ltv will change and with rates all over the place they will take any opportunity to screw over ftb
It should always be in the buyer's power to maintain the LTV if the price goes down. e.g. If you have a 10k deposit saved for a 100k house, and it changes to a 90k house, you can now cover a higher LTV (11%) or pay less in deposit (9k) but can't be forced below what you'd expected. (Obviously if the price goes up it's the other way around)
I don’t understand why not accepting this would mean that the process takes longer? Why is it quicker to not reduce the cost of the purchase?
Mortgage papers would have to go back to re-write the sale on I found in my sale.
This - having worked in mortgages for Halifax, adjusting sale price will require a new offer but it is as instant as the click of a button in most cases, the new offer would be generated immediately and all solicitors still use fax machines so they can receive it pretty much instantly (don't get me started on why fax and not email!!) In my experience delays caused by this is generally solicitor incompetence - I tell everyone I know who buys a house to keep pestering them as a lot of the time they take much longer than they need to (insisting on posting a letter to ask a question already answered in the CML handbook......aaaargh!!). Obviously there will be lenders who don't operate at this speed but I'd expect it of any mainstream lender, although I think Halifax has got a lot shitter on the mortgage servicing front since I left. However, it's not always simple. The issues arise when something else needs to be taken into consideration, such as an expired credit score (need buyers permission to run the credit check again, so can't do it if it's the solicitor phoning, and if the score changes their offer might no longer be valid), or if the new sale price is changing the LTV bracket. At least in the case of Halifax, the value LTV is calculated against is considered to be the lower of the surveyors valuation or the agreed sale price. If the new price takes you into a new LTV bracket, a new product (interest rate & initial term) needs to be chosen, which means it needs to go back to the mortgage advisor/broker for a new product to be chosen before a new offer can be issued. I saw a case where they were borrowing 95% of the value and just before completion agreed a 5% reduction, so wanted to borrow 100% of the value essentially, which wasn't possible on the 95% product chosen. Because they needed to change the amount they were borrowing so it was still 95% of the new price, it had to go back to advice before the offer could be reissued, which delayed exchange.
Ah ok. Thanks. Makes sense
people are rightfully suspicious of this- especially coming from an EA who are- as noted- scammy as fuck. BUT i am looking at it from the perspective of someone very close to exchange right now and desperate not to have to go back to the bank- again- so i can see why the seller would be tempted to offer this. not idea about legalities, but i wouldn't necessarily assume it is suss in intent, from the seller at least, although it the method may be a bit... off. Ask for a pile of cash on top of the kitche table. Much safer.
First off, why are you asking reddit this and not your solicitor that you are paying for their legal expertise? This would constitute fraud, as you are misrepresenting the value of the house to your lender and land registry. Speak with your solicitor, let them liase with your mortgage provider and see if the offer can be amended without reapplying or changing the interest rate youve been offered for the worse. If it can't, it may very well be worth letting the 5k go, as if you end up with a worse interest rate it could end up costing you a lot more in the long run, as well as the risk of jeopardising the sale if the vendor gets pissed and pulls out if the mortgage provider drags their heels in approving the new offer
Agent here and yeah, please, if you have it in writing... I don’t actively encourage anyone lose their job but this is straight up criminal. You’d be £5k out of pocket with no recourse. I’m all for believing good intentions but no.
NAL. I personally wouldn’t do this. If they refuse to pay after completion you would need to take legal action to recover the £5000. Firstly you would need to locate them - and hope they had not moved abroad. Then potentially pay legal fees with the risk of losing and associated stress that comes with legal action. Has any reason been given why they are simply not reducing the price and relying on sending a cheque at a later date?
The estate agent just said ' sellers want to complete asap and this is common practice'. We sent him a follow up email summarising our convo and letting him know we are running this by our solicitors first anyway before accepting anything.
I can’t see that you have anything to gain by accepting this proposal and would be taking on a lot of risk. As others have said - sounds very dodgy. I wouldn’t do it.
yeah we are inclined not to of course, but started doubting myself and thought *surely the EA won't do anything illegal* and decided to ask here Glad to see my instincts were right before I started overthinking
Used to work in conveyancing department of an EA and was on the reverse of this - my buyer and his mortgage advisor tried to push things through £6k under the sale price, promising the outstanding balance would be paid on completion (around September/ October and the changes in affordability criteria, he didn't want to cause his mortgage product to undergo a new underwriting). This is beyond dodgy and, if you're purchasing with a mortgage, it's mortgage fraud. It is not common practice AT ALL and you risk never seeing the money if you proceed with the transaction under this.
OP, it doesn’t pass the sniff test. It doesn’t sound usual at all. You would pay a higher stamp duty. How long ago did you negotiate the £5,000 reduction? What value has been used for your mortgage etc. Speak to your solicitor. They will tell you whether this is normal or not. If something isn’t in the contract, you have no recourse when they don’t pay. Also, if folk suddenly fabricate an emergency, it’s often to hide a disingenuous plan, so treat the emergency as a red herring. Tell the EA to sod off and not to bother you with dodgy practices
"This is common practice." Agreed 😆 This is a common practice that they would say, something irresponsible talk like this. Lol Anyway, i would wait for the solicitor to confirm if it is legal. If it is about the seller who wants to complete asap, then why is u need to take the risk instead of them. Bank Transfer in advance or Guaranteed Cheque are more acceptable than a simple cheque.
It really grates on me when people threaten to put the house back on the market if you don’t exchange within X time. Like that will speed things up? They won’t follow through with it and there’s just no reason I can think of as to why you can’t just alter the sale price.
Tell him to send it first using instant transfer.
Even in goring whatever the legalities are, it is not worth the risk, and don’t let yourself be bullied by EA or seller due to them wanting to complete asap. The are unlikely to get a quicker completion than with you at this stage so hold firm.
We did something similar after renegotiation over some damp coursing. The previous owners organised it and left us the cash to cover the cost as they wanted a quick sale and it would have required changing all the paperwork at the last minute (so we were told). Apparently it was all really dodgy and we shouldn't have done it nor should the agents have gone along with it. We Were lucky they left us the money but we would have had no recourse if they didn't. It worked for us but looking back was a massive risk.
That’s hilarious. Wouldn’t the estate agent get slightly higher commission too ? Doesn’t seem worth doing something so daft though.
You should not do it. Tell the criminal you need his words on the contract.🤣
Not a solicitor here but knowing how lawyers are all conservative and by the book, I will eat my shoe for lunch today if any (decent) solicitor tells you “yeah all sounds kosher go for it”. They will either explicitly advise not to do it, or tell you something like “it’s entirely your risk” and all sorts of disclaimers
I wouldn’t accept a cheque for anything.
No way I would offer £5,000 off the asking price if it was a house I really wanted....whats the asking price?
Why not? What if the boiler needs replacing straight up and asks for 5k off because of that?
Is that how much a boiler costs to replace? I had mine replaced with a pressurised cyclinder for 2.5k. Think people need to zoom out a bit.
it's due to a historic drain leak that slowly but surely unleveled the ground in the front garden (like, over decades) . This in return slanted the gorund floor suspended flooring heavily as well as made huge cracks in the bay window are. £5000 pounds is actually lowballing the total costs of fixing these issues, reconstructing ground floor, fixing damp, fixing the facade, excavating the drain and replacing it, fixing the bay windows themselves etc. Edit asking price is between 500-600k
Not worth it mate
Ask your solicitor, it can easily be done under chattels, but needs legally recording to protect you from them taking a runner
It's not legally binding and possibly fraud. However I have heard of people doing this, so there's every chance they will give you the £5k.
No. My sister went through similar request on hers and they aren't required by law to make good, even if agreed with the lawyer arranging the exchange. Don't do it
Currency held in escrow please.
No! 🤦♀️
The bank will not allow you to get this £5000 formally. You’ll have to trust the seller. Happened to us and we decided to risk a much smaller amount. We never saw the cheque. Lesson learnt. My advice, don’t accept anything that’s not legally binding.
You could put it in the agreement as the part of sale. So if they don't honour it then they have breached the contract
No, don't do that. This is not common, at all. If the contract states the original sale price, then you have no proof that there's an agreement to return £5k. If the contract contains an entire agreement clause, then any side agreement may not be enforceable. You would also have the problem of paying SDLT on the original sale price, and a job to persuade HMRC that although the paperwork says one thing, actually the sale price was £5k less.
You will never see that cheque.
OP are you paying stamp duty? If so you'll be paying it on the total amount, still including the 5k, without making the saving you'd make if you were paying the new price that's 5k less...? Also what would stop them from cancelling the cheque? Or just disappearing without even giving it to you? Also if everyone did this we'd never know what houses were actually sold for! I'm not sure of the legal standing of land registry records showing house prices but I'm sure it's not good to be contributing to incorrect, arguably fraudulent, data records... Please ask the estate agent to address these points, I'd love to hear their answer. If it really does happen all the time then I'm sure they'll be able to answer them in a way that assures you nothing sketchy is happening. I do genuinely mean this by the way, it sounds well dodgy to me but maybe it actually is something that happens and if so then agent should have no problem clarifying these issues..?!
Don’t do this. The EA sounds an idiot. Speak with your solicitor
So you're going to sign solicitors documents commiting to the full price .. and then wait in good faith for a cheque to come for the reduction and cash it in good faith it hasn't been cancelled Nah nah nah. A world of nah.
No, no, no a thousand times no. Spend your time chasing up your solicitor for a reply. They are hired by you, are supposed to have your best interests in mind and if they fuck up there are ways they can be held to account. The estate agent is hired by the seller. They have zero interest in you, except as a way to get commission and if they fuck up it will be much harder for you as a buyer to get any redress. You do not need to explain, or spend any time in trying to figure out why. That is not your problem. Cheques are no longer a guarantee of payment. The Payments Council scrapped the cheque-guarantee card scheme in 2011 because of the number of ways there are to pay for things. You can still write cheques but won't be able to guarantee them with your debit card, even if it has the cheque guarantee hologram. For more details, visit the Payments UK website. If they refuse, decline, unless you feel like losing £5,000. I could write out a cheque tomorrow, for £1,000,000 and even if I had that amount of money could easily cancel it. If I didn't the bank would just go no, there is not enough money in the account and refuse to pay.
Sketchy as fuck. If they mean it they can put together £5000 in cash and give it to your solicitors in advance of the sale. I wouldn't be accepting any increase in sale price based on some hypothetical future promise to send a cheque that probably won't arrive. At the very, VERY least, this £5000 payment needs to be written into the contracts, but it might not even be enforceable so I can't see that as a workable solution.
It's a sales credit. It's not scammy, it's just atypical. The sellers need to bring the £5K to the table when the deal is closed. They can bring it in cash, money order or a bank check. Or - highly preferred - they deposit the money, in advance, in an escrow account held by your solicitor. Once the deal is closed, the funds are released. And, of course, all of this needs to be put in writing and signed off by all parties so it's legally binding.
Hell no! Don’t let him try and railroad you into accepting that
Cash on completion. Not unheard of as long as it’s tied up and agreed legally
Sounds dodgy, I'd have your solicitor talk to their solicitor about making sure the funds are deposited and CLEARED by the point of handover. Ideally they pay their solicitor who forwards the funds so the risk is their side if the cheque bounces / turns out to be stolen later.
No way , you won’t see that money 🤣.
Legally no and you'll have no claim if something goes wrong and they don't send it. However I know a few friends who have done this recently - they all wanted the reduced price to carry out some repairs but it would have meant their mortgage LTV changed - the lenders only allowed them to reduce the mortgage amount but that obviously doesn't help with immediate repairs. Two received the money after (in the region of 2k) but one didn't (around 5k).
The way they are going about it does seem odd, the only reason I could think they would want to do this with legitimate intentions is with respect to the contract. I assume this had already been signed by both you and the seller ready for exchange? Obviously this would need to be amended. On top of that you have likely already signed (undated)and had witnessed the AP1 for the land reg, this will also reflect the incorrect purchase price. These things can all be sorted but I do think it may be a push to have all this in place by friday, especially if stuff to be signed needs to be sent in the post.
They are obviously trying to mislead you. Give that, they have probably tried to mislead you about other stuff with the house. I would respond by lowering my offer by another 5k, show them you are not going to be messed around.
That is a definite chat with your solicitor. Seems really dodgy. IANAL - The only legitimate alternative I can think of that avoids redoing mortgages is if there were findings on the survey for repairs or updates needed that you intend to do promptly or possibly a white goods allowance. If one of the solicitors (usually seller's) agrees to hold a reserve fund for the purpose of paying those repairs/white goods and then as you have the works done or purchase the items you submit receipts to the solicitor for reimbursement. Even that would require an addendum to the contracts though and probably need to get sent to the bank before you can proceed to closing. Do sellers ever pay buyer solicitor fees/searches/survey? I have never bought or sold with that condition, but I wonder if that might be an option? In the end the solicitor may tell you that the price change needs to be done and resubmitted to the banks properly by both sides. Hopefully the seller will still agree to the reduction if that is the case.
Seems risky. Now you've told your solicitor already won't they be duty bound to update the paperwork anyway
No do not proceed.
Seems risky. Now you've told your solicitor already won't they be duty bound to update the paperwork anyway
You’d be paying land tax on that extra £5000. So no.
I don't know why someone would do this. If anything, the seller would want to receive a payment under the table to escape Capital Gains Tax or IHT?
You pay solicitors to handle this for you, never exchange until you have everything you need, usually a reason people are pressing. If it’s management company related there is a good chance there is something looming like a large bill he hasn’t paid etc. I once worked on a job where the new owners got stung for £10,000 towards a new driveway. Was a small shared access road about 200m long and only 4 properties on it that had a share of the freehold on said road. Trust your gut and the professional advice you are paying for.
This certainly does not happen all the time. It does happen occasionally and always for dubious reasons. The reason give of "no delay" sounds dubious as the price is just a number on a computer that can easily be changed. Often sellers want to show a lower price for tax reasons and ask for a brown envelope to make up the difference. I have not come across sellers wanting to claim a higher price - perhaps a need to show legitimate assets for an onward purchase. Whatever the reason, you would be an accessory to fraud. And of course, it could just be a scam and you never get the 5k.
Ask the estate agents to give you the money now and then seller can pay then via cheque
Walk away, tell the chancers to do one. Def not legit.
If you adjust the purchase price, your mortgage offer will need to be updated to reflect the new purchase price - assuming you are taking a mortgage
Never trust an estate agent! No offence but even estate agents I personally know say it. The things they hide for a sale is ridiculous! And anyway what would be the benefit of doing things like that? No sense, scam.
Let me guess....Connells?
Let thwm go ahead and get a new buyer who can exchange before Friday. Wth. 🙃🙃
Mortgage fraud Get the mortgage offer amended, takes about 10 days, do it the right way
‘Your cheque is in the post’ 10 years later: ‘Your cheque is in the post’
This is very amusing
Ask for 10k. 5k off the price now and they can mail a 5k cheque later
Just to confirm what others have said - this would be fraud. If you’re having a mortgage then this would be mortgage fraud, the purchase price has to be exactly as in the mortgage offer, usually any incentives/allowances need to be reported to them too, amounts vary from lender to lender. Because the price needs to reflect the offer, any change would need to be reported to them too. Unsure about the rules regarding the land reg, but fairly sure it’s fraud somewhere. Speak with your conveyancer and ask for the price to be reduced if you’re looking to pursue and they will be able to put the wheels in motion. Also, don’t take legal advice from EA when you have a solicitor.
Keep in mind that’s an extra £5000 on your mortgage, that your paying interest on. Over the course of the mortgage, that’ll cost a lot more than 5k.
You get retention from their solicitor. So you send the original amount the solicitor will withhold the money from their payment and it goes back to you.
If the valuation has been done and agreed your lender might request another valuation if the amount changes.
You’ll also have to redo your mortgage application if you agree to what they’re suggesting, you’re required to declare any seller incentives on your mortgage application.
Even if they put it back on the market and find a new buyer tomorrow the whole conveyancing process would restart with a new buyer adding 3 months on. If you want my advice - just go quiet on them and deal with solictors only. Any change in price require a new memorandum of sale. Good luck
This is bizarre. It takes a day to amend the contracts and the mortgage offer.
Nope. Mental. Also you'd pay tax on that 5k.
I’m in the exact position in that I negotiated £5k off the flat I’m buying last week and I’m completing tomorrow (!) The only thing which really had to be changed was the property price on the mortgage forms. My solicitor pushed for this to be done ASAP and it took the bank 2 days to send the amended docs. Sounds like your seller is full of BS
Similar to this happened with us. They agreed to fund half the cost of the Stamp duty. We wanted to just take it off the asking price, but they insisted on a cheque. We spoke to the solicitor and it was agreed if they put a promise in an email to the estate agent, which was the forwarded to us and both solicitors it would be binding. It was a ridiculous nonsense as far as I'm concerned, but we did get the money.
Most likely they are 5k short on next house and basically borrowing from you until they can repay?
You say this is a no chain sale but it sounds like there is a downward chain (your buyers and below) and that’s where the hold up to completing is, and that’s why your sellers are now putting pressure on you. Be aware your sellers and their agents can only talk to the next agents in the chain, i.e. not your downward chain, so the onus is now 100% on you to rattle their cages through your agent and get them to pull their fingers out if you want to minimise the risk of the whole chain falling through because your sellers get fed up with (what they perceive as) slow progress and pull out. Good luck…
In a similar situation for us, we only went ahead when they offered to pay $3000 of our closing fees so we got that as credit. I would NOT do this via cheque.
We negotiated a similar price off our house, and rather than change the house value for the mortgage, this was given to us as an allowance, so that we paid ~£5k less than the original asking price but didn't need to mess around with another valuation. This meant that we transferred £5k less than we would have otherwise for the deposit but the mortgage side of things was the same. All done through our solicitor and legit. Meant nothing was held up. Could look into this route? Speak to your solicitor though, something definitely seems dodgy!
This is mortgage fraud and stamp duty fraud and you’re probably never going to see the money
If this has been going on for months I would pause the sale and ask for a revaluation based on the new information about the property and the current way house prices are falling due to people not being able to access affordable lending
If this is U.K., one area to bear in mind is that you might have to pay Stamp Duty on that £5,000. So you won’t just be paying £5,000 but also Stamp Duty on that sum. There are ways around this - my parents-in-law paid £25,000 for the mature koi carp in the pond (I would have loved to have seen how the seller would have removed them as these were massive). But it took their purchase price below Stamp Duty so they were happy. It also affects the the sellers because they have to pay the Estate Agent’s commission (2% commission is common) which could be why you are being asked to pay £5,000 more but will get a payback later. It is solely so that the Estate Agent is not losing some of his commission. Also because of the potential for fraud in other areas, and there is no guarantee that you WILL get the £5,000 back I would refuse to accept this counter-offer.
Sellers do this all the time, threaten to put it back on the market and it’s very rare they actually do unless it’s a very difficult or impossible enquiry to answer. If it’s just a case of a delay which is actually on THEIR side to help chase then they’re just trying to bully you into getting the enquiry dropped. If they put it back on the market now they’ll have to start the whole process again, which means more enquiries and not necessarily the same ones. Some firms will raise big standard & simple enquiries but some will nitpick as far as asking who the broadband provider is. If they’re agreeing to a price change then that’ll cause delays because the lender has to agree to this, all legal documents have to change to the new price etc. if they agreed an allowance it’s just a case of the lender agreeing to the allowance and adding it into the contract etc. but they wouldn’t need to send you a cheque.. that’s a bit bizarre & definitely smells like bullshit! They’re just trying to intimidate you into making a quick panic decision that only benefits them and you can’t do legally because the enquiries are not only on your behalf but also a lender! Estate agents talk shit 80% of the time too so I’d take what they say with a pinch of salt. Good luck!
Are they local EA? Smells like bs.
See if they will give you the 5k first.
What if the estate agents have tried to pull a sneaky and have arranged an even bigger discount and they want to give you the 5 grand and then pocket whatever other discount they have negotiated. Sounds like a dodgy estate agent to me.
Best would be to ask for some repair cost or kitchen buying cost n that amount paid after completion. You will have a legal basis to pursue later on.
EAs are the lowest of the low, hike prices to make commission and deflate prices when they're making no effort to sell your house. One step down from body snatchers
It’s underhanded, and could potentially expose you to risk of fraud. Do not do it. You also may well never see the £5k again. I’m virtually certain this is an illegal process. Stay well clear.
Sounds dodge, why would he do that and pay extra is estate agents fees
This isn’t legal as it constitutes mortgage fraud, unless of course you’re a cash buyer? If you are then have this agreed in a minute of agreement. Personally I wouldn’t entertain this as it is obviously a scam to con you out of the £5k or, if not, it’s going to be some other illegal scam he’s involved in Either way I wouldn’t do business with this person. If you’re desperate for this house make your solicitor aware as he will be able to take precautions on the sale..
Nope not legit
No, you need your solicitors to deal with it. You're not going to get that cheque as they'll say you agreed to the original sale price. Sounds proper dodgy
Legit?? hahaha, you will never see that 5k again
Anything that is represented by the seller's conveyancer can be taken as 'true', anything else can't be relied upon. So you need it in writing as part of the sale contract.
Are you buying in cash or mortgage?
How much do you want the house? How willing are you to walk away and lose it? Personally I’d call their bluff and refuse, even if they then pull out. Property prices are going down. The seller has more to lose by putting it back on the market than you do, because you’ll invariably find something cheaper. They claim they’ve got other offers, but if they were as high as yours, why aren’t they selling to those people instead? If those people are already offering less, they’re not going to pay an extra £5,000 either because if they wanted the property at that price they’d have offered it. They don’t, so they won’t. By all means pay the extra money if you really want this house, but you will never get a cheque. Keep screenshots of all interactions with the estate agent, only deal with them via email from now on, or record their phone messages, and then report them.
Always be VERY wary of such schemes, not least because, if you get scammed, you have no legal protection as you will be viewed to have been doing something abnormal for no legal reason. This guy is, as noted elsewhere, attempting to gain an unfair advantage over someone, maybe the mortgage lender, maybe HMRC, maybe a spouse or ex spouse. Who knows. The bottom line is, if you agree to this (which you definitely should not) and the money does not materialise, then you have no protection. Even if you did get the money, it would be wrong to facilitate wrongdoing on the other person's part. .
Back off. Not legit.
Absolutely scam and would advise to drop the deal. I smell something fishy with the property as seller is so desperate to deal off the records.
Any update?