Concerned about massive over-offer on house

[BeingATwatItsABingThing]

My friend has had her house on the market for a while. It’s quite a niche house so it wasn’t selling quickly and finding the right buyer was going to take a while. They reduced the price twice in hopes to sell.

They had some viewings the other day and got an offer from someone who said he buys houses on a buy to let to rent to vulnerable families. He has offered £25,000 over the asking price. No bidding war or other offers.

Initially, I was chuffed for them but I’ve been thinking and something isn’t sitting right. Why would he offer so much over the asking price? Especially if he is hoping to rent it out for vulnerable families. I haven’t spoken to my friend about this yet because I can’t decide if I’m overreacting.

AIBU to be worried about this? Is this a scam?

(I know it’s not my house and none of my business but I wouldn’t want them to be caught up in a scam.)

YABU because this is why people use estate agents and have solicitors. Speculating on the internet will tell you nothing. A solicitor doing due diligence will pick up any issues. Sometimes people will pay over to secure the property especially if the vulnerable people they house are actually through an LA or charity because they're guaranteed the rent.

The buyer's solicitors are under a legal duty to check the source of funds of their client. If the solicitors are not satisfied the source of funds of the buyer are legitimate, they cannot represent the buyer. Get the name of the buyer's solicitors (both the individual and the law firm) and check that they are SRA-authorised by going on the Law Society Find a Solicitor website: [[https://solicitors.lawsociety.org.uk/

Google the name of the buyer and their solicitors to confirm there is no bad press.

What does your friend know about the circumstances of the buyer? If it is a family house, are they a family? Does the buyer's profile fit with the sort of person who would buy your friend's property.

If the buyer is a cash buyer and not using a solicitor, it is a big red flag for money laundering. Other red flags are if the buyer was very cursory in their viewing or did not view the property. Urgency is another red flag as is buying through a company especially one that is registered in Panama or other high risk jurisdiction. You would not expect a residential property worth 325K to be purchased through a company.

It is worth your friend informing her own solicitors about the overprice and background circumstances so her solicitor can do their own anti-money laundering checks on the buyer.

The first couple through the door of my parents house for viewing, offered 20k over asking. The sale went through without any issues. We think they did it to stop any bidding war….it put others off.

Lots of LLs have limited companies and use them to buy properties at all ends of the market.
I'm not sharing an opinion on OP's friend's buyer but the PP trying to make people frightened of dealing with limited companies is mistaken.

I had an offer way over asking on a house - they hadn’t sold and were wanting to rent to buy - they were well known to the estate agent who thought their sums in their own property didn’t add up - we sold to someone else also over asking but not crazily so

If this was in Scotland, it's not that unusual.

Once contracts have been exchanged I think he’d be liable to pay all fees if he did that wouldn’t he ?

Because he has more money then he knows what to do with and wanted to secure the house?

Surely he has to prove he has the money?

Not Scotland.

Exactly! That's a trick I've seen happen!

You could push for exchange a couple of weeks before completion- I would not rely on a chain and go into rented and buy from a better position.

Thank you for all the feedback. I’m aware that it’s the job of the solicitors and EA to do the checks but someone wasn’t sitting right.

I’ve now shared my concerns with my friend as a result of the feedback here and she is confident any money laundering, etc. would be picked up. Ultimately it’s their house and their money so they can make their own decisions but I would’ve felt awful if I hadn’t said anything and it had fallen through for less than legitimate reasons.

Probably going to do it as supported accommodation and charge the council £200 per room per week. Big money spinners!

Most cash buyers who want to rent try to get it as cheap as possible and as near to being rentable as possible.

If he has a mortgage it will be based on the estimate of the mortgage provider and any surveys. But by the time they come through others have dropped out.

It is not unusual to offer a high amount to price others out before reducing the offer.

You don't always accept the highest offer but an offer than can be confirmed financially. Your EA should have asked questions about where the money is coming from and if it is cosher or not.

It's easy to find out these days how long something has been on the market. If it's been on the market a while, surely someone is more likely to go in with a cheeky offer (with view to upping it) rather than anything over asking price.

Fingers crossed there's not anything to worry about.

A friend of mine offered £25k over asking and he was the only offer on the table. He just wanted the house and didn’t want the owners to go back on accepting the offer. It all went through fine and he’s living there now.

We were buying a flat, agreed a price. Sellers, couple with new baby - as were we at the time - had another better offer. Price went up - we agreed to raise a bit, seller went back and got an even better (ridiculous offer) on DAY OF EXCHANGE from other buyer!
It was too good to be true and too good to turn down. So they shafted us.

But as was obvious to everyone but the greedy sellers - £25 k over asking is suspect. New buyer of course pulled out last minute and sellers - forced into a corner with new baby and in a chain - had no option and sold it for less than they would have got from us.
Common tactic.

If it is money laundering and the man is a stranger she cannot be implicated. Plus the sale is via an agent etc. The solicitor will do money laundering checks.

When renting to vulnerable families the rooms often have to be specific sizes. Many houses just don’t meet the criteria. This may be why he has offered more. If it is for vulnerable adults in independent living the rent is lucrative and the rooms have to meet certain size criteria. He may need certain consents and it may be easy to obtain in that area. He may have offered over asking price so if/when the neighbours put pressure on her to not sell to a landlord renting to vulnerable people she is not swayed.

I think he will drop the price dramatically at the last moment. Its a hook to take it off the market fast and ensure no other offers.

AIBU to be worried about this? Is this a scam?

How could it be a scam?
Presumably your friend is using a decent lawyer (& not a cheap remote conveyancer) who will pick up on any discrepancy.

I doubt the offer will remain so high, an experienced BTL landlord will be reasonably canny, & likely adjust downward post-survey or builder's report.

😂😂😂

Yeah, when I'm laundering cash, my go-to strategy is to offer a sum ostentatiously over the asking price, deal in one of the most transparently regulated markets available, & have my transaction scrutinised by banks & 3rd party lawyers ...

I would worry they will demand a huge discount just before exchange when your friends are committed on another house and can't say no.

Its been posted about a few times on here.

My first thought was money laundering. Cash buyer paying over the odds (and you're not in Scotland where "offers over" is common to secure the property).
I'm cynical at times, though.

Totally agree with this.