Sorry but this is a little complicated.
Facts:House 1
Been offered a house $90000 under market price.
Valued 12mths ago for $240 seller willing to take $150.
Owes $104 on payout to bank.
Seller willing to do private sale.
Bank said he has 2 weeks to sell it.Facts House 2
House bought for approx $160 + also bought 2 cars in that mortage. Total $170 approx
Now owes approx $180
Should be able to get $170 if sold
House 1 is security for house 2House 1 the one I want buy is in his name only but was use as the security for house 2 which is in 2 names.
Relationship brokedown and the partner refues to sign the paper work for house 2 to be sold, neither person has made any repayment since approx Feb /March this year. Needless to say the bank wants it smoney.
This is where it starts to get complicated.The keys for house 2 were handed back to the bank approx 6 weeks ago . House still not sold bank has not put it on the market yet.
Banks said that the tenants in house 1 had to be out by the 18/12 so the house can be sold.The question is will the banks allow house 1 to be sold for $90 below market.
Can they make him sell it for a higher price.
Since it is not on the market yet (by the bank) can I approach the bank direct and if so will the accept such a low price.I have spoken to accountant who said great deal go for it.[biggrin]
Also spoke to lawyer who said stay away from it[angry2]
Lawyer said that if I buy it (pay for it) the banks can take it off me at a later date. Now I am just confused. If i buy house 1 and it settles how can the bank take back? [grrr]How can I get the bank to release the house and get this deal over the line.
I am now so confused that I cant see the wood for the trees and not so slowly going nuts.
Hi,
Unfortunately if a person goes bankrupt the any transaction he/she did in the last 2 years can be reversed by the bankruptcy court. (I think its 2 years, might even be 5). This is to stop Christopher Skase selling everything to his distant relative two days before official bankruptcy, leaving nothing to the creditors. Well thats the theory….
Will the person selling go bankrupt? If you could fix that problem its a great deal. Maybe you could force the extra money ($150 – $104 = $46k) to be paid onto the second house, and force the total loan amount to drop? If the second house is worth $170k and has a loan of only $134k then hopefully the bank could get all their money from the property sale, assuming the owner defaults. This would require some interesting modifications to the contract for sale. Speak to a good lawyer!
Good luck!
PS If you do get a contract specially written up that “forces” the vendor to pay off loan x amount y on property z etc please forward it on to me so I could use as a template
Thanks
Seller will not go bankrupt. The sell will have enought equity to cover the debt. Any thoughts on what I might put in the contract? I am going to another lawyer tomorrow.Where there is a will there must be a way.
Be very careful.
Is this person a friend of yours? it sounds to me as if he/she is trying to remove assets that may be subject to a property settlement if his/her relationship has broken down.
There is absolutely no reason for a person to sell a $240K asset for $150K unless fraud of some sort is involved, which is something that it is probably not very wise to become caught up in.
Deliberate asset stripping can be reversed by a court ruling. Even though you buy the property, if a court deems that it was deliberately sold cheaply to avoid paying a partner his/her legal share, then the transaction can be reversed. By buying so far below valuation it would be hard for you to claim you did not know that something odd was going on.
Also be aware of stamp duty implications.
But I am no expert, just that I’ve learned that if it sounds too good to be true then there is usually a catch.
Take good legal advice to protect yourself.
And remember there is such a thing as karma… if you act with this person to do harm to another, then karma has a way of catching up with you.
MargPS: Then again, i may be way off track. Maybe this is just a nice person who wants to make a gift to you…in which case I apologise for getting it wrong.
This is to bring this back onto the front page[biggrin]
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