Am I being ludicrous???

[Sarah...]

hey all

I would just like to ask a brief question.

Example:
If I was to buy a block of land valued at $600,000, but signed a contact to buy the land for $520,00, subject to finance, could I request the bank I am lending from to carry out a valuation, and say for example they came back saying the land was worth $600,000, could I take the advantage of buying under price by asking the bank to use the $80,000 difference (gain) as a % of the deposit. This is just an example.

Am I being ludicrous???

Thank you

Sarah

 

[see_change]

They will take the value as being the contract price in the vast majority of cases.

There was a phase of people signing a secondary contract, so that the vendor was passing some of the money back to the purchaser without the bank being aware of it, thus lowering the effective purchase price, but the banks considered it fraud and looked very closely at anyone involved with the people suggesting that scheme.

See change

 

[Sarah...]

je thanks for that advise sea change

you nearly saved me a fraud charge there, thanks

 

[Les]

G'day Sarah,

What CAN be done, is to "bite the bullet" short-term, purchase the property, but do it with a lending institution that will consider "refinancing" in LESS than 12 months. Some will, some won't - and often, they want to know that you've added value to generate the gain.

Or, if you are certain that the value is there, chose to refinance with another lender (say) 3 months on. At that time, they will use a Valuer's figure rather than a contract price. Yes, it costs a little more, but you release another $64k (80% of $80k difference). And all quite legal.

And top marks for questioning.... By the way, none of this is advice, you know - just my opinion

Regards,

 

[Qld's007]

Any alternative is to use a lender who lends against valuation rather than purchase price. ARAF is one of those.

 

[TheBacon]

je thanks for that advise sea change

you nearly saved me a fraud charge there, thanks

Thanks Sarah for the lesson in how to take friendly advice completely the wrong way.

TheBacon

 

[geoffw]

Thanks Sarah for the lesson in how to take friendly advice completely the wrong way.

Bacon

I think there was some tongue in cheek there

 

[TheBacon]

I think there was some tongue in cheek there

In which case I took it the wrong way

Cheers

TheBacon