Our client was a young guy looking to buy an investment property from his parents, which they wanted to sell to him for a reduced price. This is a pretty common scenario, parents wanting to help their children out.
We sat down with the family and helped them to understand the entire process from what was involved in getting the property valued to helping them understand the fees. This was important because if there’s a transfer of ownership involved then Stamp Duty is payable.
We were also able to introduce the family to a Conveyancer, who was able to assist them to draw up the contract to purchase the property. Our broker became the ‘project manager’ ensuring that all the pieces fell into place.
It was then our job to assist the client to get the best loan for his needs at a good interest rate. This can often be a bit tricky because in this sort of situation when the client is buying the property at a discount to market value, many banks, would take the lower value of either the property valuation or the purchase contract.
For our broker, this meant sending out a few different scenarios to different banks, because different banks have different policies around what they do in this situation. So, before we even submitted an application to the bank, we made sure that the bank had a policy around this, and it was acceptable for what we were wanting to do.
The result meant our client was able to get a loan against the market value of the property, even though he was buying it for less than market value. Our client had some savings which he contributed to cover some of the stamp duty, but he could have borrowed the entire amount if he needed to.
The client and his parents were really happy with the outcome. When they came to us, they had no idea where to even start and for our broker to help them through the whole process was really rewarding.
If you do have a challenging situation that you’d like us to help you with, get in touch. Particularity if you are wanting to buy a property from a family member at a reduced price. We are experienced and can help take the stress out of the process. Contact us we’d love to help you. If not, check out our Youtube page Rise High TV for more finance tips and tricks.