The UK's independent property information site

Go Back   Home Move: property forum > Property Forums > Selling Property


Selling Property Discussions about selling a house, flat, or other home and dwelling.

Reply
 
LinkBack Thread Tools
  #1 (permalink)  
Old 14-01-2008, 11:12 PM
Junior Member
 
Join Date: Jan 2008
Posts: 1
Cool Vendor gifting or incentives

Does anyone know how vendor gifting/incentives work or if anyone has come across this before?

My house is being marketed for OIRO 215K. I've now been approached by a prospective purchaser who is keen to buy it.

However, he has taken a rather unorthodox approach in attempting to raise the finance. He's intention is to purchase my property by using 'no money down' -by having my property's valuation inflated to 250K. He's confident the valuation will be very near his inflated figure. He claims he will then give me 220K for my troubles and I will in effect 'gift him back' 30K, therefore in effect he is obtaining a little over 100% financing.

I wish to know what my tax position will be regarding the 'gifting' element of the transaction and has anyone used this method before.

I believe it's legal using some loophole with regard to this 'gifting' element but would like to receive some solid advice.

Many thanks
Reply With Quote
  #2 (permalink)  
Old 16-01-2008, 12:18 PM
brian's Avatar
Administrator
 
Join Date: Apr 2006
Posts: 1,291
Default

I'd seek professional advice on this - firstly an accountant, then a solicitor. There's something about this that just doesn't ring right.

For a start, a mortgage will not normally be lent above a property's value. The reason being, that if the mortgage payments are not kept, the lender can get their money back via sale of the property.

However, if the mortgage amount is in excess of the actual market value, the bank is always going to risk losing money on the transaction - and that doesn't make sense.

If someone approched me with a similar offer, I would either reject it outright, or else raise the price to 250.
Reply With Quote
  #3 (permalink)  
Old 24-01-2008, 06:40 PM
Senior Member
 
Join Date: Apr 2007
Location: Hampshire
Posts: 553
Default

The proposal is mortgage fraud pure and simple. If the buyer is found out he will go to prison and OP would be an accessory and face penalties too.

Buyer's solicitor would be struck off for being party to it. He has a duty to refuse to act, or reveal all the details to the lender. If having had the details revealed the lender is silly enough to proceed then there's no fraud, but how likely is that?

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients

Last edited by Richard Webster; 24-01-2008 at 06:40 PM. Reason: word repeated
Reply With Quote
Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off


 

» Property Boards
Buying Property Selling Property Estate Agents Solicitors & Legal Builders & Developments
Property Development Home Improvements Buying Property Abroad


All times are GMT +1. The time now is 03:01 AM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2014, vBulletin Solutions, Inc.
Content Relevant URLs by vBSEO 3.6.0 PL2 ©2011, Crawlability, Inc.

Important Notice: HomeMove.co.uk does not provide professional advice on any aspect of buying, selling, developing or investing property. All posts are provided as lay opinions and not personal professional guidance. You should always seek a qualified professional for professional advice in relation to your personal circumstances. The HomeMove.co.uk forums are not monitored, and the site administrators cannot be held liable for the content of the forum. If you have any objection to any post on the forums, please either use the Report Post feature, or else Contact Us to ensure such content is properly dealt with. We are not responsible for third party links on the site.