Purchasing house from family

fairyfairygirl

My Grandmas has recently gone into a care home. My husband and I are interested in purchasing her house. Does anyone have any experience of this and in particular doing it in such a way that we save money. Is it possible to buy the house at a lower than market rate price? Many thanks in advance.

bryanb

Does she want to sell it? Who is funding the care home?

fairyfairygirl

Care home is being paid for out of savings and there should be enough for a few years. My Dad and his sister have Power of Attourney.

kingstreet

When savings drop, an application will be made for council funding.

At that time, disposal of an asset for below market value will be considered deprivation of assets.

http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/

It's hard to see how disposing of an asset at below market value demonstrates the PoA is acting in the person's best interests.

Pixie5740

How much lower than market rate are you thinking of going? Your dad and his sister should look into depravation of assets.

Errata

Is it possible to buy the house at a lower than market rate price?

No, because the attorneys are legally required to act in the best interests of the donor. Flogging a house for less than it's worth would acting illegally.

caprikid1

I think it will depend on order of magnitude.

If the house is not sold via an estate agent valued c £170 and sold for £160 they may be not bothered.

If its valued at £200 and sold for £120 you may have an issue

Just a guess mind.

troubleinparadise

As has been said already, the Attorneys can only act in the best interests of the donor - they have to get the best price for the property for the benefit of Grandma.

Grandma may be a lady of of substantial means, and the need for the capital realised from the sale of her property may not be of enormous material matter in the long run. Or it may be - residential care can be very expensive.

Equally, the family may feel that you should benefit from buying her property at a knock-down price, and any potential beneficiaries from her estate may be very happy for you to purchase at less than market value and thus reduce the value of her estate that they might otherwise inherit.

However, should she be in need of LA funding at a later date, there may be questions asked as to why her property was sold at less than market value after she had entered residential care, and withold funding as a result.

fairyfairygirl

Valued around 750000, only able to offer maximum of 600000, could my father potentially gift us the difference and we pay him back in time?

Mojisola

fairyfairygirl wrote: »

Valued around 750000, only able to offer maximum of 600000, could my father potentially gift us the difference and we pay him back in time?

No, because it's either a gift or a loan.

If it's a loan, it will affect what mortgage you can get.

If it's a gift, the people with POA will be acting illegally.

p00hsticks

Mojisola wrote: »

If it's a gift, the people with POA will be acting illegally.

Not if the father is gifting his own money rather than grandmas (who he has POA for)