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azr
Joined: 18 Sep 2008
Posts: 6
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 Posted: Tue Sep 23, 2008 10:48 am Post subject: Consequence of marking up prices |
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As I'm hunting for houses now, I came across many owner/agent/bank personnel you suggest to have the price of the house up by 10% so that the loan amount will match the actual house's price.
It sounds lucrative at first as the interest is low and you can actually invest the money somewhere else which offers higher interest rate than what we ought to pay if the money goes to down payment.
But, when I consulted a friend. He said that we are actually breaching the S&P from day one as it is stated there the house price and "the buyer should pay 10% of the house price upon execution"
He also said that the risk is all on the buyer.
Any of you guys ever experienced this (bad/good) with this sort of transaction. Any advise? |
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yykalex
Joined: 14 Mar 2008
Posts: 156
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| Posted: Tue Sep 23, 2008 1:40 pm Post subject: Re: Consequence of marking up prices |
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| azr wrote: | As I'm hunting for houses now, I came across many owner/agent/bank personnel you suggest to have the price of the house up by 10% so that the loan amount will match the actual house's price.
It sounds lucrative at first as the interest is low and you can actually invest the money somewhere else which offers higher interest rate than what we ought to pay if the money goes to down payment.
But, when I consulted a friend. He said that we are actually breaching the S&P from day one as it is stated there the house price and "the buyer should pay 10% of the house price upon execution"
He also said that the risk is all on the buyer.
Any of you guys ever experienced this (bad/good) with this sort of transaction. Any advise? |
its true azr,
firstly,
no deposit/money paid for a property is not consider "transaction", therefor the SPA is not valid.
secondly,
in case the bank found out you doing so, bank will draw back their loan at anytime. is a fraud case.
how the bank get to know this???
very easy, when the bank's panel valuer go for actual site inspection, at the end cannot get the valuation match with your house price, then the loan cannot release/drawdown.
thirdly,
would the house owner accept this without taking any deposit from you???
the worst scenario would be, the owner could sell the house to anyone else bcoz there is no contract tight between owner and you. |
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azr
Joined: 18 Sep 2008
Posts: 6
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| Posted: Wed Sep 24, 2008 2:35 pm Post subject: |
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albeit the risks, wonder why the officers and agent suggest these and so confident that nothing will happen?
probably the risk is not in teir hand right? |
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tanyacatherine
Joined: 24 Sep 2008
Posts: 1
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| Posted: Wed Sep 24, 2008 4:39 pm Post subject: Consequence of marking up prices |
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Higher petrol prices lead to slower driving and less road deaths. Interestingly the effect seems to come from the effect high petrol prices have on discouraging price sensitive drivers who also happen to be the most accident prone (since this category includes teenagers and the elderly). It does seem to strengthen the case for Pigovian taxes on petrol since the effect of the speed at which you drive has an additional negative but unpriced effect on other drivers in the form of increasing the likelihood of accidents and fatalities. Of course driving too slowly also imposes a negative externality in the form of congestion.
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Tanyaa
Internet Marketing |
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yykalex
Joined: 14 Mar 2008
Posts: 156
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| Posted: Thu Sep 25, 2008 11:31 am Post subject: |
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| azr wrote: | albeit the risks, wonder why the officers and agent suggest these and so confident that nothing will happen?
probably the risk is not in teir hand right? |
azr,
mayb you not aware of the MOT cost.
the higher your purchase price mark-up, the higher the MOT fee you have to pay. Beware...
*MOT = Memorantum of Transfer for property title.
For the officers & agent, they only concern about their commission.
Once you sign up with them, they will say bye bye to you which later on you are the one/alone to face the consequence (if something happen). |
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seanlim
Joined: 27 May 2007
Posts: 13
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| Posted: Fri Sep 26, 2008 12:57 pm Post subject: |
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I have actually done it numerous times and it has been very profitable. This is one of the ways where you can have a no money down deal. End of the day, you are helping your seller get their money, letting the lawyers, bankers, valuers make more money, and of coz you can make the money as well. If calculated well, the additional costs is all worth while.
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My Real Estate Investor Journey
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