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Can you dictate to an Estate Agent who buys your house?(36 Posts)
I have a friend who wants to sell his Mums house, his Mum died last week leaving no debts, he is comfortably off with his own large house so
will not need to sell for a profit.
The current value looking at zoopla for a two bed Victorian house with an extension and a 100ft garden in his area is around the 150k mark and in his area these little houses tend to sell within weeks at that price.
However he wants to sell it at the 100k mark to enable a young couple to buy it who may not be able to afford a family home or as an alternative to a ticky tacky box with no garden he is worried that if he goes to an ES they will try and talk him out of it and he is no good at confrontations and also he does not want it to be sold to a BLT landlord who will make a profit or an non Islander who may want it as a holiday home.
I think his best bet is to find through contacts a someone who wanted it let them have a private viewing and then put it on with an estate agent and the person can then view it again through the ES and make an offer which he will accept as this is what we did when we bought our house from a family friend at 90k below market value.
If he cant find a couple (or a single person) like that can he put it with an estate agent with these provisos and would he be allowed to get information about potential buyers before accepting an offer.
He knows that even if he sold to people who fit his criteria they have the right to sell it on for a profit and to who they like, but he is happy with that, as at least it would give someone a chance of climbing up the ladder by having a larger deposit for a larger family home should they need to.
Does anyone have any advise
Galliano he is 45 and will have his own house to sell if he needs care
We think we may have found someone who is looking for a house 60k over the price this could be sold for with the help to buy scheme they have a deposit which may enable them to get a mortgage for a 100k property without HTB. Young couple with 1 child and like a lot of people having to pay rent AND save up for a deposit. They are looking at a 3 bed in a newbuild estate but this house has more room down stairs as it has an extension and the 100ft Garden instead of a tiny one
They will need to come and view and do their sums but seem interested
and it will be a private sale no ES involved.
Of course it may not suit as it is decorated in 'old lady style' so they may prefer a new one they can just move into
As others have said, private sale. Please tell your friend that someone did this for my parents when we were very young. He was a communist and sold it to my parents at the price he bought it for as he didn't want to make money from property. It changed our lives. We moved out if a council estate. Into an area with better schools. The knock on effect was enormous. Good luck!
Wannabe - I stand corrected on the stamp duty issue! However wouldn't hmrc view it as him gifting away £50k so the recipients might have CGT to pay?
Some areas, like the lake district, you see lots of houses for sale with covenants restricting their sale to local residents. I think a covenant and a private sale is the right way to go. Or he could rent it out at a low rent.
I think it sounds like an odd thing to do too and that there are better ways of giving something back from the estate.
I'm wondering how old the friend is? In addition to the IHT risk is there a danger this could be seen as intentional deprivation of assets if he needed nursing home care himself in the future.
"Agree way too many pitfalls - stamp duty would also be payable on the actual value rather than the sold price." of course it wouldn't - stamp duty is payable on the price at completion. otherwise you wouldn't get so many houses round here priced above the 5% stamp duty threshold selling at just under - no-one in their right mind would offer 25K under an asking price only to pay that out in stamp duty.
The instances where stamp duty avoidance happens is where e.g. someone sells a house for £145K with 5K cash on the side... but that's not what the op's friend is doing here.
People do have a right to sell a house for whatever they want, and offering way under asking price is the norm (although probably not that far under), but when a price is above a stamp duty threshold i.e. £150k £250K and £500K it is common practice to offer and accept below that and the difference in stamp duty is not applicable.
He's lucky he does not need the money or have relatives who might need some financial help. Why help people you don't even know? Does he have no friends who could do with some money, or even friends of his Mother? Seems too vague to me and he could do a lot more in his Mother's memory.
He could put a local covenant on it it's very common where we live
That's what he needs to do
Oh unless he could sell to a housing charity or housing association at a discounted rate? I don't know what provision there is where you are Mrs DC.
If at all possible I think he'd be much better advised to rent it out to people in need and that way he could possibly help successive families over time.
It's a very philanthropic idea, but unfortunately open to abuse.
He also needs to be careful that this doesn't look like an inheritance tax/stamp duty dodge. Legal advice required I think.
I'd sell at the market value and then donate money to a charity that help young homeless families/couples. Too many opportunists with selling at 2/3 of the market value. A lovely gesture but one that could leave a bitter taste and abused.
Alternatively he could rent it out, accepting young families on housing benefit/partial housing benefit. Make it a requirement that they must be working but can receive housing benefit top up? This is more likely to help someone in need than offering the property for sale. People genuinely in need of housing than someone who could raise £100k mortgage.
Should also explain, this will allow it to be marketed by an estate agent, but also means future sellers have to sell similarly.
Speak to a solicitor. He can put a covenant on it ensuring that it is used as affordable housing, or only to a local family, or low income family etc.
It's quite a common covenant now as lots of affordable homes have one.
I like zzzz's idea.
if he sells it under its value, someone else will make a lot of money. So if he wants control over where that money goes, he sells it at market value and donates the difference.
given that it will be a big sum, and that it is on an island that may have different tax laws, some professional advice on the plan would be a good idea.
Sell privately and get a friend to do the viewings
Silas's idea is good if it's doable
Agree way too many pitfalls - stamp duty would also be payable on the actual value rather than the sold price.
Couldn't he sell to a Housing Association?
Or sell at market rate and donate £50k to Shelter?
I think he is being naïve tbh.
While the idea of wanting to sell to someone who can only afford a say £100k property is admirable, there is no actual way of establishing whether he is selling it to someone who genuinely only has/earns that much. Putting a house on the market (be that privately or through an EA) for 50K below the value of others in the street is going to bring out the world and its dog to want to buy it, and realistically he is not going to be able to vet them. Family with children - yes he can establish that, but financial state he cannot legally demand to know because of data protection/FSA rules which as a private seller he would not have any control over...
Plus if it's a small community I would be mindful of how someone moving into a street where their house went for a 3rd less than others in the street and thus potentially compromises other house prices will be welcomed (or not) by the neighbours. (as people will start to off r much less on other houses for sale in that street on account of the fact that a house went for 50k less iyswim).
I know he has the right intentions but there are just too many pitfalls IMO.
He'd be better off selling it at market value and investing the money in a houseing association or donating it.
If he sells it at 50k under asking price the "young couple" would be barking mad not to sell it on at full price and reduce their mortgage by 50k.
My parents have sold all of their houses through private sales - this is the way to do it if he wants to sell it as a family home. A private sale should be easy in an island community - word of mouth and putting an ad up in a supermarket/newsagents.
Be aware though that even if he finds the nice young couple he wants they might well do btl, sell off part of the land for development or sell for a profit. He can't control what happens after the sale.
Could he set up some sort of shared ownership - with a peppercorn rent for his 1/3? He could do it with the understanding that after a period of time (say 5-10 years) they own the house outright. That would stop the fast buck people.
special he is quite happy for someone to use as a starter home and then sell on and buy something better as long as the original purchasers can be helped even in the short term but they are lovely houses they really are with two double bedrooms so even if someone had a couple of kids they could stay there for some time.
Are there any inheritance tax issues or capital gains if he is deemed to have sold at less than market value? I guess his solicitor can advise though.
It is a lovely gesture just not sure how practical it is.
The estate agent or one of his 'friends' will buy it under the guise of ftb and then sell it on and pocket the 50k
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