Shared ownership.

Scroobs

hello! I’ll try and be brief…! I want to enquire whether the following is dodgy or not…

Buying a shared ownership. 50%. 

100% is £350k. 

Mortgage people have said it’s only worth £310k. RICS saying it’s £320k. 

Seller wants £160k (50%) plus £15k cash. 

My issue is, I have nowhere to live as this is my 3rd house following collapsing chains. I am a single mum with 2 children. Sofa surfing with friends so they know I’m desperate. 

Is this something that is common practise??? £350k is ceiling price in the area. 

Many thanks for your help. 

user1977

Yes, dodgy, plus it suggests you're dealing with an idiot. How on earth do they think the "£15k cash" is going to be dealt with? The solicitors aren't going to let it happen, even if you wanted to pay £325k (do you?).

Devongardener

Was the house marketed by the housing association or an estate agent?  When we sold ours a few years the HA had to market it first and if unsuccessful we could appoint an EA. Either way the HA had to approve the sale and the buyer, and if the HA found the buyer they charged a fee of 1.5% of the sale.  The HA certainly wouldn't allow a cash payment on top of the sold price.  As user1977 says above you solicitors wouldn’t allow it to be part of the contract.     

Brie

Sounds like the £15k cash is some sort of scam to avoid CGT to me.  

2016housebuyer

The 15k is likely to be a 'premium', technically above board and it's supposedly for improvements that the seller has made to the property. If the property is being sold in the nomination period by the housing association sellers aren't allowed to add a premium but if it then goes to the open market they can.

Where I live SO sell like hot cakes so most sellers add this premium for non-existent improvements and get away with it because people have no choice but to pay.It can't be added to a mortgage though, so you'd need 15k in addition to the deposit.

sidneyvic

I would run as fast as you can, buying a shared ownership house with none of benefits of renting nor buying is one thing but then paying well over the odds for it is absolutely crazy.
The seller has to sell at a price set by the HA and this is probably where his crazy scheme has come from. Very irregular.

2016housebuyer

sidneyvic said:

I would run as fast as you can, buying a shared ownership house with none of benefits of renting nor buying is one thing but then paying well over the odds for it is absolutely crazy.
The seller has to sell at a price set by the HA and this is probably where his crazy scheme has come from. Very irregular.

It's not as simple as that, SO has it's place - I have a 3 bed house with garage and garden in a great area, my combined rent and mortgage is less than half the cost of the equivalent market rent. It would be IMPOSSIBLE for me to rent a house like this on one wage, what I pay for my rent/mortgage would literally pay for a room in an HMO in dodgy area where I live - there's the benefit right there.