Is this do-able?

dfw1980

We are FTB and were due to exchange today.

Our vendors have had their mortgage offer but it has a condition that they clear their debts before funds are released.

The vendors cant do this so looks like they will be pulling out!!

We have agreed a purchase price of £245k and we have a £50k deposit.

Is it do-able to reduce the purchase price to £235 and instead of putting £50k into the deposit, put £40k down and give the vendors £10k to enable them to get their mortgage?

(So we will still be paying the initial price..)

Does that meke sense what i am asking?

As FTBers i dont know if this is an option, or even legal??

We really love the house so just exploring every possibility before admitting defeat

Kynthia

What does your solicitor say, as they are the expert and the one you are paying to advise and protect you?


I don't think it's possible. One reason is that you are artificially reducing the purchase price and therefore fraudulently reducing your stamp duty bill.

KiKi

JMO, but I would have thought you could just simply lower your offer on the house you're buying, and hope for the best.

I don't see how that's fraudulently reducing your stamp duty bill, though - wouldn't it be seen as making a lower offer to enable the sale?

Do speak to your solicitor, though.

quotememiserable

I don't see any stamp duty issue anyway, because the new price could easily be seen as a reasonable value.
Problem might be, you'd need to pay in advance of contract would you? And how can you be sure your 10k is secure?

Jhoney_2

Can the solicitor not release the 10% paid by you when you exchange? It is their money and they will at that time become liable to sell you the property and committing to their own purchase (assuming that the Lender really has put in this condition).

Anything else seems a bit risky to me. Why don't the sort things with their solicitor/lender instead.

At least if they can't sell to you now, they cannot sell to anyone.

Kynthia

The stamp duty issue would be saying the purchase price was now £235k but 'bunging' the vendors an additional £10k in cash on the side. So you are paying £245k for the property but declaring the purchase price to the HMRC as £235k and paying stamp duty at that lower value. Your intention isn't to reduce your stamp duty bill but that would be the result.

Would you need to pay over the £10k cash before exchange? Then how would you protect it and ensure that you got the money back if exchange didn't take place? It would be better if the vendors could borrow from friends and family.

Jhoney_2

Surely a solicitors letter confirming that they will discharge the vendors debts before releasing funds from the sale should be enough as they do with disbursements.

Whatever you do, keep it formal and between the solicitors.

dfw1980

All great options and replies, thanks very much.
The EA is speaking to the vendors tomorrow so by then i should have a clearer picture if the problems they are facing.
This is sooo frustrating