Stamp duty deadline missed due to vendor dragging feet

by Readers Question

15:59 PM, 31st March 2016
About 3 years ago

Stamp duty deadline missed due to vendor dragging feet

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Stamp duty deadline missed due to vendor dragging feet

I had an offer or £295000 accepted on a 2 bed flat in North London on 12th January 2016. I thought I would have plenty of time to complete by the 31st March stamp duty deadline!late

However due to the incompetence of the estate agents in house broker and the vendor who took weeks/months to supply required information to his solicitors and further weeks to allow access to mortgage valuers there by delaying my mortgage offer I have now missed the deadline and face a £8,850.00 increase in SDLT.

On 13th January I had a meeting with the broker and he suggested I apply for an 80% LTV mortgage. We went through all the usual details. I gave him bank statements. ID documents and 3 year’s accounts (I’m self employed) he did a credit check and I also explained that my deposit was from an inheritance from my Mother who passed away in 2014. He filled out the forms and submitted them to the lender. I then waited for the survey to be arranged and for an offer. I contacted that agents and Broker daily to push for a survey appointment and was consistently given excuses as to why nothing was being done. The vendor who has at tenant in the property was not returning calls they could not get access to the property for the valuation survey. The valuation was finally done on 9th Feb. (Almost 1 month wasted) The Broker then told me that the underwriters were questioning my deposit and needed more proof. I supplied them with My mothers final Estate accounts certified by the probate solicitors which showed the amounts I had been received in her will… but there still seemed to be a problem and no offer had been made. Eventually I contacted the lenders directly and discovered that the problem was that my broker had mistakenly indicated in the application that my funds were from “Savings” and should have been declared as “Inheritance” This had aroused the suspicions of the underwriter and delayed the offer. They finally made an offer 29th Feb but for only 75% LTV and at the same rate as the 80% deal, not a particularly good deal. I discussed this with the broker and he suggested I apply for a new 80% loan with another lender and claimed he could get an off in 5 days!! Of course I was skeptical but took his advice and he submitted a new application on 4th March. To cut a long story short the whole sorry process repeated itself the vendor again delayed the survey which was eventually done on 24th March I also contacted the lenders and again discovered that the broker had made mistakes on the application. He had initially given the wrong property address and stated that I am “Employed” rather than “Self Employed”. Mistakes that he later corrected. I’m now waiting for an offer.

In addition to this the vendor has been extremely slow in supplying information. The leasehold pack requested by my solicitors took 2 months to come back because the vendor delayed payment of £400.00 to the Freeholders for this information.

I’m now in the position where I don’t yet have a mortgage offer and will struggle financially to meet the additional SDLT and so am questioning weather to go ahead with the purchase.

About a month ago I had a conversation with the Estate agent and explained by way of trying to move things forward that if we were unable to complete by the end of March I’m concerned that I might have to pull out of the deal. He advised me that we should carry on and try to beat the deadline he also said that if I did pull out then it would not be a problem as the market is moving very quickly and the property would probably be marketed at a higher price if it did go back on sale. I’m now suspicious that the vendor may have dragged his feet because he saw an opportunity to get a better offer at a later date.

Brokers fee and Legal fee are only payable on completion but I have already paid around £350.00 for searches and I think there will be some other expenses. Do I have a chance of claiming from the vendor if I decide not to go ahead?

This is my first foray into Buy To Let and I would welcome any advice that members can give me. Should I make a lower offer? Can I claim compensation for expenses and time wasted? Who could I go to make a formal complaint?

Matt



Comments

Neil Patterson

16:04 PM, 31st March 2016
About 3 years ago

Hi Matt,
If the extra stamp duty is going to make the deal difficult for you and or not worth it I would pull out now, but it is your call.

You should then contact the company the broker works for (it will be on the paperwork) and request their formal complaints procedure. Then take it from there. You have lots of recourse under FCA regulations, but compensation would normally be limited to what you have actually paid out.

Sara Webb

17:33 PM, 31st March 2016
About 3 years ago

if the stamp duty is a problem, and extra nearly 9K. is a lot to find, If it was me I would pull out, and complain, there are plenty more properties so do not rush into something that you are clearly not sure of, keep your money and look elsewhere

gaurav sekhri

18:12 PM, 31st March 2016
About 3 years ago

Hi Matt,

You could always try and renegotiate the deal once you're ready to exchange (not before). I understand the agent has said that the vendor will put it back on the market - (thats what he is paid to tell)

However put yourself in the vendors shoes, they have a property which they want to sell, you're offering them the money to buy it right away - they have 2 options;
a) Sell now and have the money in their pocket or
b) Wait for another buyer, without a mortgage offer or sense of urgency to buy it.

Also try and get the agent onside as he will not want to lose out on his commission, putting back on the market means more viewings, time spent and little extra money for the agency.

There is some risk for you, the vendor pulls out and you lose your money trying to buy the place - but it may be a risk worth taking.

I doubt complaining will get you very far as it seems there was also a delay on the vendors side with paperwork.

Good luck!

James Forbes

18:54 PM, 31st March 2016
About 3 years ago

Reply to the comment left by "gaurav sekhri" at "31/03/2016 - 18:12":

Hi Gaurav
Thanks for your advice. And looking at things from a different perspective.
It has been quite a stressful couple of months so i'm actually quite relieved that the pressure is off now that the SDLT deadline has passed. I now have the luxury of waiting calmly for a mortgage offer and then making a decision.
I will certainly keep you advice in mind.

On that note... are the agents obliged to honour my offer untill I withdraw or can they re market it without my permission? I have a letter of acceptance from them.

James Forbes

18:57 PM, 31st March 2016
About 3 years ago

Reply to the comment left by "Neil Patterson" at "31/03/2016 - 16:04":

Hi Neil
Thanks for your comments and advice.

James Forbes

19:05 PM, 31st March 2016
About 3 years ago

Reply to the comment left by "Sara Webb" at "31/03/2016 - 17:33":

Hi Sara
Thanks for your advice.
As you can imagine I have become a little obsessed with this deal and its disappointing to have missed the deadline.
You are right, there are many more properties out there and in uncertain times perhaps it is better to wait and see what happens... Who knows!

gaurav sekhri

19:56 PM, 31st March 2016
About 3 years ago

Reply to the comment left by "James Forbes" at "31/03/2016 - 18:54":

It's not so much agents but the seller - neither are obliged (legally) to honour your offer at any point with any deal up until exchange of contracts.

In saying this if your mortgage offer arrives next week or at a later date it's worth checking if the vendor wishes to proceed (provided paper work has not been withdrawn). You never know!

Steve Wood

8:02 AM, 1st April 2016
About 3 years ago

Don't obsess about this one. Unless you think you could flip it for £20k plus more the next day there are plenty of opportunities out there. Explain you have tried hard to get this through but due to issues
Outside your control your offer is now reduced by the extra sdlt amount as you cannot afford to continue otherwise but you still want to buy it. If they say no move on and try complaining as outlined above. You should be able to assess the market values as I assume you know the area?

LondonProperty1 L

8:02 AM, 1st April 2016
About 3 years ago

Hi Matt,

I was in a similar position as you (with the vendor dragging the sale by 6 months) and eventually pulling out as prices adjusted higher. This was back in 2013/14 in London.

I am not sure where you are buying, but I do believe the environment is different now and prices do not increase month after month.

Second, if I were you I would suggest just adjusting your return on equity calculation and seeing how much this charge will set you back.

Finally regarding the process - I agree that the estate agent is keen on the commission (especially when there are fewer properties for sale and greater competition). On my last property the agent agreed to lower her fees because I would not move any higher on my offer and the vendor would not sell for less. So she agreed to charge less %, and he then lowered the price and it worked. This is also one of the options you can discuss with the agent (the value of the property was double of yours though so there was a bit more room for manoeuvre).

Mandy Thomson

9:25 AM, 1st April 2016
About 3 years ago

Hi Matt

You say the vendor was finding it difficult to gain access for the mortgage valuation surveyors, for several weeks? That access would normally be down to the tenant, unless the vendor has his tenant's agreement that he can enter the property while the tenant is out. This rings a slight alarm bell with me as it sounds like the tenant might not be the easiest or most co-operative. All my tenants have more than happy to make time for this kind of thing over the years.

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