What's the scam?

GaryBC

Hi all
Here's the scenario:
Guy offers to buy my house for £650k cash but he wants a £30k refund on completion. 
What's he playing at? And how far/fast should I run away? 

marcia_

 No idea but run anyway has to be a scam 

GaryBC

marcia_ said:

 No idea but run anyway has to be a scam 

That's the plan! I was just curious as to what the scam might be. 

Billxx

Money laundering?

user1977

(Probably) trying to kid on to a mortgage lender that the price is higher than it really is.

GaryBC

Billxx said:

Money laundering?

Could be. I was also thinking if it's some sort of accounting scam? By 'buying' at £650k and getting £30k 'refunded' he's got a £620k asset on his books with an inflated 'value' of £650k. A tax scam perhaps? Isn't it something like this that Trump was indicted for? Preferential deals based upon artificially inflated asset values? 

GaryBC

user1977 said:

(Probably) trying to kid on to a mortgage lender that the price is higher than it really is.

It's apparently going to be a 'cash' purchase but yes, it's an inflated price on his books. 

mark_cycling00

Does he want to avoid conveyancing lawyers? 

Converting money from crime into property is a well worn path and law firms are obliged to do a hell of a lot of checks. Maybe if you do it yourself you'd be liable and lose all the cash. Not sure.

But more likely he'll get your £30k and you won't get your £650. You might keep your house.

The refund might have to be given to a fake company in advance of completion. Only has to be a minute before completion happens 

GaryBC

mark_cycling00 said:

Does he want to avoid conveyancing lawyers? 

Converting money from crime into property is a well worn path and law firms are obliged to do a hell of a lot of checks. Maybe if you do it yourself you'd be liable and lose all the cash. Not sure.

But more likely he'll get your £30k and you won't get your £650. You might keep your house.

The refund might have to be given to a fake company in advance of completion. Only has to be a minute before completion happens 

Our conveyancing solicitors have already told me they won't touch it - so we won't! This is more about me just trying to understand what he's trying to pull off! 

Gentoo365

It makes no financial sense as he would be paying stamp duty on more than the real price.

Effectively the solicitor would be receiving money on completion and then sending most to you and some to the buyer. At which point the buyer can make up some story about where the money came from and it looks legit as it comes from a solicitor.

So quite rightly your solicitor would not accept the arrangements.

If there is a rational, legal reason for this weird proposition then the buyers solicitor should be able to suggest some alternative solution to whatever the problem is, as this is not it.

(Another rubbish idea for why he is doing this is maybe to have the 'last sold price' inflated on the land registry, so as to make the house seem higher value to lenders and/or future buyers).

snooksnj1

GaryBC said:

Billxx said:

Money laundering?

Could be. I was also thinking if it's some sort of accounting scam? By 'buying' at £650k and getting £30k 'refunded' he's got a £620k asset on his books with an inflated 'value' of £650k. A tax scam perhaps? Isn't it something like this that Trump was indicted for? Preferential deals based upon artificially inflated asset values? 

 The"tax scam" was labeling payment of a NDA as a legal expense. It was a clerical error and he still paid the same amount of tax to the Feds. He did it to hide the affair from Milania.  Which made it a felony.  The other case was  over valuing his properties for loans.  For example Trump told the bank Mar a Lago is worth x amount to obtain a loan but the Judge said the true value of Mar a Lago is $12 Million.