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How did he sell his house for so much?

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  • How did he sell his house for so much?

    A friend of mine was in a dispute with her ex-partner over child custody. Financial matters were critical. Her ex was trying to sell his house, and had it on the market for £350,000, when it's true market value was about £250,000. He had no offers for several months (unsurprisingly), and then, shortly before the Court Hearing, he switched Estate Agents, and within a week had a confirmed offer, and sold it for just under his asking price. We estimate he sold it for about £90,000 more than it's true value.
    We have checked with Land Registry, and according to them, the sale did go through at about £340,000.
    How is this possible?
    Thanks, Douggie

  • #2
    Re: How did he sell his house for so much?

    Originally posted by Douggie View Post
    A friend of mine was in a dispute with her ex-partner over child custody. Financial matters were critical. Her ex was trying to sell his house, and had it on the market for £350,000, when it's true market value was about £250,000. He had no offers for several months (unsurprisingly), and then, shortly before the Court Hearing, he switched Estate Agents, and within a week had a confirmed offer, and sold it for just under his asking price. We estimate he sold it for about £90,000 more than it's true value.
    We have checked with Land Registry, and according to them, the sale did go through at about £340,000.
    How is this possible?
    Thanks, Douggie
    It's possible because £340k is what it was worth to the buyer. I don't know where you got your 'true value' figure of £250k from, but it would appear to be wildly inaccurate.

    I imagine it must've been bought with a mortgage and the lender will have done a valuation which, presumably, confirmed the purchase price.

    I can't imagine anyone, especially these days, paying £90k more than a house is worth unless they had just been released from the local asylum

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    • #3
      Re: How did he sell his house for so much?

      I suppose if you had a cash buyer who was mad enough it could work.

      Seller says "Look I want this house to appear to be worth more so if you pay me £260K (extra £10K to cover SDLT) then we'll say that you paid £340K and the contract will provide for an allowance of £90K."

      Buyer tells HMRC he paid £340K for it and pays the applicable SDLT, but actually only pays say £260K. If both parties know what is going on and there is mortgage involved it isn't a fraud, although it might be - if the buyer later sells it in circumstances where CGT is payable, HMRC might investigate further! Equally he will get caught the other way if he does shortly afterwards and HMRC will then consider his estate that much more valuable.

      So most sensible buyers would tell the seller where to go and wouldn't want to get involved.
      RICHARD WEBSTERwww.rwco.co.uk
      As a conveyancing solicitor I want to be helpful (England/Wales only) but can't accept liability for this.

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