Really do need advice.

biting_the_bullet

Hello all, decided to log onto the forum to ask this serious question, which relates to my quite strange personal housing circumstances.

All serious advice will be welcomed, so here goes, a bit of background info.

I've lived in the same family home all my life and am currently 34 years old. My parents split up when i was about 15, my mum moving out of the house leaving my dad, sister and myself. My sister then moved out to go off to Uni, and 2 years later my dad moved in with his new girlfriend. So at the age of 17 i had a 3 bed semi all to myself. I took on the bills and this is the situation i find myself in today. In the meantime my partner has moved in with me, and we have a 4 year old child together too. I had no real need to get on the housing ladder, so drifted through life with this arrangement until now. It was great at the time living on my own but realise the situation has cost me thousands.
We are now looking to buy the property from my Father. Next door sold last year for £157K, and we have verbally agreed a price of £140K for our house. It needs a new kitchen, bathroom, boiler and a few other jobs doing. I think the outlay for the works will bring us somewhere near or just over next doors selling price of last year. I'm very bearish as to where property prices are heading, and would of ideally looked to buy elsewhere but for the money involved, our house is miles away better than what we could expect.


So, the questions:-

Can we agree a low sale price like this within the family?

What are the following correct procedures to follow? (haven't got a clue, never bought a house)

Can you see any other problems relating to this situation?

Thanks in advance

btb.

Bargain_Annie

A house is only ever worth what someone is willing to pay for it and what the seller is willing to accept. Your Dad could sell it to you for £1 if he wanted (wouldn't that be nice!!!) You both need to instruct solicitors - unless you're brave enough to do the conveyancing yourself - as there are legal formalities such as contracts and land registry to be completed. If you're getting a mortgage your lender will want local authority searches and a survey done, but provided you're all in agreement it should be straightforward.

biting_the_bullet

Thanks Annie, appreciated.

meanmachine_2

Bargain_Annie wrote:

Your Dad could sell it to you for £1 if he wanted (wouldn't that be nice!!!)

Umm, not sure that's correct.

OP, I'd wait for other advice from posters first.

The govt has a funny habit of not liking anything that sees it get less tax - in this case stamp duty.

biting_the_bullet

Yes, just read a post from Bobproperty on another thread about the taxman not liking things sold bmv. These are the issues i need to know nailed down in concrete before proceeding.

And what does OP stand for?

madfrenchgirl

original post

biting_the_bullet

Thanks for that, you madfrenchgirl you.

MortgageMamma

HI there

as you are buying the house from a family member and he is giving you a considerable amount of equity this could be classed a family gift and a lot of lenders would be happy to accept this arrangement, and in some circumstances youmay well be able to take a mortgage without a deposit as the lender may see the family gift, i.e. equity as a good enough deposit.

You will be paying stamp duty as the property is over 125k.

As for the purchase price of the property, have you been paying the mortgage alone all these years whilst your father still has ownership of the property? I'm not being funny, and this is your family business, but if I was in your shoes I'd be haggling the price down a little further. You may already have certain rights over the property as it is, I'm not an expert at this but I'd have a solicitor check the family law act 1997 out for you. I could be wrong on this point so I'm happy to be corrected by those who know more.

Bun

When we bought our flat our solicitor picked up on the large discepancy in buying price and selling price within a very short period of time - our vendor bought the flat from a family member quickly at it's original price to stop it being repossessed, then sold it at the correct price as there was no time to sell properly and he presumably couldn't get the financing at the higher price. His explanation was accepted, but this was a large percentage of the price, what you are proposing sounds fine for buying a house that needs a bit of work.

biting_the_bullet

Been in the lucky position of not paying a mortgage, or rent for the property ever. So i can't take that stance as i'm sure you'd agree. I just cover the bills.

MortgageMamma

What a lucky position indeed. does your dad want to adopt me LOL. No I agree you cannot take that stance and in light of what you have told me you have a good deal already. There are plenty of lenders prepared to lend on the "family gift" basis, my advice toyou is to speak with a whole of market mortgage broker (preferably fee's free) and get them to source a mortgage for you.