Sounds a bit dodgy?

We are selling our late mother’s house for £145,000. We have instructed solicitors in Preston. They do residential conveyancing in Preston. It’s a bit dilapidated and the buyer is a builder who wants to do it up and sell it. I chose solicitors near me. We are ok about the price but now he’s told me his valuation has come out at £165,000 and he wants us to say we’re selling for that price but the “gifting of the deposit” of £20,000 to him. Our conveyancing solicitor refuses to have anything to do with this. Is he just being fussy? They gave me a competitive conveyancing quote and I was happy with their conveyancing fees which is why I went with them in the first place.


Your conveyancing solicitor is absolutely right – it’s a dodgy deal. I expect that what is happening here is that your buyer has no deposit and will have told the lender that the purchase price is £165,000, making it seem as though he is putting in a £20,000 of his own funds, whereas in fact he is putting in nothing and effectively getting a 100% mortgage. Residential conveyancing solicitors are very wary of this.


You could ask your residential conveyancing solicitor in Preston to say you’ll go along with it provided he gets a letter from your buyer’s solicitor near Preston confirming that his client’s lender is aware that you are gifting the £20,000 deposit, and confirming that the transfer will show the price to be £165,000 rather than the £145,000. But I suspect that your buyer will then threaten to pull out of the purchase – he can’t agree to your proposals, as this will make his little scheme unworkable. Conveyancing solicitors have to be careful about this. He will be left with Conveyancing fees if this happens.


You may ask, what’s all this got to do with me? The danger is you could be getting yourself drawn into a mortgage fraud. Quite apart from the fact that you are being asked to say something that isn’t true – namely that you are gifting £20,000 when you’re not, and signing a contract saying the price is £145,000 when it’s supposed to be £165,000 – another worrying sign is that there is apparently a valuation saying your property’s worth £165,000. If that’s correct, then you’re selling to cheaply. And if it’s not correct, then the valuation may be fraudulent too. The conveyancing quote will be inaccurate too.


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What’s it got to do with you? Well, if your buyer later defaults on his mortgage; and his lender ends up out of pocket, you could find the lender knocking on your door asking for you to chip in towards his losses. Followed shortly afterwards by the police asking some even more awkward questions.

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