Here’s the situation, I’m going to put my flat on the market at the start of August. In July I’ve just been tidying it up prior to having the estate agent photos and in this time I listed the flat on Gumtree of all places at a realistic selling price (£85k).

(I took into account the estate agents valuation £90k, what else was on the market in my block(£85k to £100k for same flat) and substracted the amount that I thought they’d offer/I’d pay in fee’s to the agents)

Anyway, the long and short of it is someone has offered me £82k for it which … given that one of the three agents I saw told me they’d just sold one for £84k a week or two before…I’m inclined to accept (Quick hassle free sale, rather than it sit there empty for the next 6 to 10mth’s).

Anyway, I’m just a bit sceptical as the buyer has come through Gumtree. He’s an investor (has two other properties) and has said he would be buying on the basis of the following in an email:

“I purchase the property for £82k

I successfully apply for a mortgage at a purchase price of £95,000

The £13k more would be used for my deposit

We have an agreement in place that when we complete the £13k will be used for my deposit and you get the £82k. (The solicitors are aware of the method)”

Now I spoke to him last night and it basically sounds like he uses a broker to front his deposit. Then get’s an inflated mortgage based on (probably) his mate doing the valuation, I return the excess mortgage to him and he settles up with the broker.

I’d obviously be using solicitors so should I really care how he intends to finance the deal…as long as I get the money I want…or have I missed something and there’s a Gumtree scam in here somewhere.

Thanks

I recommend you seek the advice of a conveyancer/solicitor. For 1 maybe 2k you could basically insure yourself against any loss. Got to be better than taking advice from a internet forum with that sort of money at stake?

As I said, the sale would go through solictors…I wouldn’t handle it myself.

I was just wondering if I’d missed something obvious before we get to that stage.

Ah, ok, I thought you were just on about the seller using his solicitors. I’m sure someone who knows more about this will be along with an opinion before too long 🙂

I am the seller…did you read the post 🙂

It sounds a lot like the classic scams that people do, where you are in some way led to believe that you have his money, then you give him 13k, and it suddenly turns out that you have given away 13k for nothing.

Unless he suggests at some point that you use ‘his’ solicitors though, or ‘needs the deposit’ before completion, I can’t see how he might work it.

If that isn’t the case, then he is surely committing some kind of fraud, and you are obviously going to be party to it if you take part in the transaction, so I’d be a bit worried.

I would suspect that any normal solicitors will not be happy about doing the agreement to pay him back the 13k, because they tend not to like taking part in fraud. In which case he might suggest using a solicitor he knows who will sort it all out, in which case it’s a scam, you lose 13k.

Oh looked it up – he (and you) would be committing mortgage fraud – see the bold bits below:

http://www.lawsociety.org.uk/productsandservices/practicenotes/mortgagefraud/5041.article#mf2

Individual purchasers can commit mortgage fraud by obtaining a higher mortgage than they are entitled to by providing untrue or misleading information or failing to disclose required information. This may include providing incorrect information about:

identity
income
employment
other debt obligations
the sources of funds other than the mortgage for the purchase
the value of the property
the price to be paid and whether any payments have been, or will be made, directly between the seller and the purchaser

I’m meeting him on Thursday so I guess I’ll know more then about his proposed way of working. Definitely won’t be using his solicitors though. Don’t need to sell and not desperate to sell.

Edit…

Thanks for that Joe…I’ll make him aware I’m not happy with that route when I meet him.

Tell him if he think’s it’s worth £95k then you’ll accept that offer?

You were already undervaluing the flat, why add hastle to the process for less money.

I’m no expert on buying/selling houses, but this all sounds “well dodgy”.

If he’s defrauding them, he’s clearly not a man of high moral standing. I wouldn’t trust him.

I don’t think I was undervaluing it…I think I’m just one of a few who are realistic about what the final selling price might be and would like to sell in a 6 to 10mth time period.

But yes, not worth the hassle. The flat is my first property and so have never been through this process before. I figured there’d be something a miss which is why I posted here….the font of all knowledge 🙂

D’uh when I said ‘seller’ I meant ‘buyer’, sorry a bit sleepy still!

let me get this right – you are selling you flat for 82k, some guy comes along and offers you the asking price but he will get his ‘mate’ to OVER value the property for 95k, and through his company he’ll apply for a mortgage and you pay him the difference once funds clear?

If that doesn’t sound dodgy to you, you need your senses testing!

I’m assuming “mate” but it might not be.

It did sound dodgy, which is why I posted here…but I’m sure people (back in the hey day of 2005-2007 used to get mortgages above the value of their properties to allow for refurb/repairs).

Anyway, have emailed him to say the viewings off due to fraud.