Seller wants a part mortgage / part cash deal

rockerjjt

Hi All,

I recently made an offer directly to the owner of a property (it is currently on the market for £400k) - I offered £375k (top end of our budget).
He came back saying he wants at least £390k for the property, but would accept our £375k (from our mortgage & deposit) and £15k in cash a year later as a private deal.

Is this legal?

How should we proceed?

Any advice would be welcome.

Thanks

SmashedAvacado

You will need to disclose this to your lender and you ought to disclose this to your lawyer.
There is nothing illegal about deferring £15k for a year.
You should consider how you will be able to pay this in a year's time but can't pay it now
you would be paying SDLT on the larger amount.

AnotherJoe

What has the lender valued the property at?

Comms69

The only way I could see this working is in effect if the seller lent you £15k for 12 months.


There is no way this agreement could form part of the buying contract and would in essence be totally separate.

mrginge

I think you should agree, but only on the condition that this 15k is not documented or declared anywhere.

Then in a years time just forget all about it.

davidmcn

It's possible, but weird (I suspect he doesn't realise how weird it is), and doesn't seem worth the hassle for the amount involved.

Is he expecting any form of security for the £15k? Do you want to pay £390k for the property?

SmashedAvacado

this also suggests your seller is somewhat keen for money now, so you could go back promising a quick deal but only on the basis of an agreed price of 375. If he uses agents it will cost him part of the difference in any event.

D_M_E

How long has it been on the market?

This is not something I would do, my approach in this situation would be "£375k, that is it, take it or leave it" and continue hunting and maybe find something else.

Also bring it to the attention of your solicitor and, if there is an EA involved, tell them the same thing, £375k and not a penny more.

ReadingTim

Unless you can find £15k in 12 months, it doesn't really matter whether it's legal or not: if £375k is your max, you can't proceed because you can't afford it!

G_M

Yes it's legal but it has implications.


* SDLT should be based on the full amount being paid - not the amount being paid now
* the mortgage lender should be informed - not to do so would be mortgage fraud. The lender may withdraw or alter their offer
* the enforceability of the deferred payment would depend how/where it was documented - the risk there is the seller'snot yours