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HiI have been tracking some properties that have gone to auction and spotted a few trends. There are professional property traders who are purchasing run down houses via estate agents and then immediately putting them through an auction.In the legal packs the title documents are not the latest showing what the trader actually paid for the property but the previous title document.
I wanted to know if this is legal as it seems unfair that they would be allowed to but in out of date title documents into the legal packs.
It is not illegal and it may be that the buyer's registration has not yet been completed at the Land Registry. You (or your solicitor) can check almost immediately at the Land Registry who the current proprietor is. You can also Google the address and very often the earlier particulars will be disclosed.
That said the property is worth what the market thinks it is worth. It could be the sale was a distressed sale or the seller was poorly-advised.
An example property I saw on zoopla for guide price £90-£100k with an estate agent which went STC, the same property was then listed for the next auction. The legal pack had the old title doc so I requested the title from land reg and it said the property sold for £92k, it then sold in the auction room for £120k (a very tidy profit for the trader)
On top of that, there was a £10k special conditions charge.
So you concern is more what the seller made than anything else. Most auction redact Land Registry titles in any case, a buyers only interest should be is it Title absolute and free from charges and other blights not what they seller paid for it. So what if they paid 50k for it has no meaning as to what another buyer may or should pay for it. Nothing illegal in making a profit and anything incomplete in the legal pack your choice is not to buy or obtain the most up to date searches or titles.
Oh yes, the Special Conditions charge. Buyers need to read the special Conditions very carefully. It is becoming very common to require the Buyer to pay all of the commission charged to the Seller as well as the Seller's solicitors' fees (which will be substantially more than most solicitors charge on a sale). Buyers who think they can save fees by not employing a solicitor may find that the special conditions charge an extra £1500 if they don't do so (partly that's justified because of the additional work caused by unrepresented parties. Full disclosure: I am a solicitor although I don't regularly do domestic conveyancing). £10K on top of £120K seems a lot. That said, nobody forces you to bid. Caveat Emptor.