Any law which says I can't sell a house for what price I want?

[Smarterchick]

I appreciate I will get a number of posts saying " Why would you do that" all I can say is there's a reason, don't be worrying about why for now, it just complicates and drags out my question. So,

 

Can anyone tell me if there is any law which states that I have to sell my house for the market price and that if I choose to sell at a price which just covers the mortgage I am legally okay to do that?

 

If the buyers happy and I'm happy then is that okay?

 

Just to put figures to this....the house is probably worth somewhere between £340 -£350,000 but there is an offer for £260,00 on the table and that covers the mortgage and debt so there's nobody going to lose out and no fiddles going on.

 

I can't see any reasons myself, but there's no getting away from the knowldge on here so...any thoughts anyone?

 

Thanks

 

Smarterchick.

[Bookworm]

As long as you are paying off the debt in full to your lender, I don't think there is anything to stop you selling at whatever price you like, no.

[My Real Name]

There may be tax issues, relating to disposing of (or benefiting from) assets at non-market value.

 

(Or there may not - taxation is not exactly the most transparent of practices.)

 

Furthermore, in certain circumstances, as is my understanding, a creditor might also be able to "see through" the sale, and have the sale annulled.

[Smarterchick]

There may be tax issues, relating to disposing of (or benefiting from) assets at non-market value.

 

(Or there may not - taxation is not exactly the most transparent of practices.)

 

Furthermore, in certain circumstances, as is my understanding, a creditor might also be able to "see through" the sale, and have the sale annulled.

 

Thanks, Creditors are not an issue here and the mtg and a loan would be cleared by the sale as the sale will see all creditors released from the accounts held. As there is no tax for the house owner on the proceeds of a residential house sale there should be no tax issues that I can think of.

 

However, even if there were creditors, so long as they were not secured (going hyperthetical now) on the property then the individuals responsibility will remain for the clearing of same would they not? The monies not being lent in the first place against the value or security of the property so thereby having no impact what the sale proceeds would bring? Who would question the price anyway if the debt were not secured?

[banker_rhymes_with]

Hello Smarterchick!

 

I think in a Recession, all bets are off on potential value anyway. The Estate Agents never did have a clue, and the true extent of their weak grasp of the issues always becomes more apparent when in a Recession

 

I'm ignoring the wholly engineered pre-election reported 0.000001% growth in the Economy recently reported. As far as we are all concerned, we are still deep in a Recession.

 

Therefore, if someone is willing to pay £260k, then that is the Market Value.

 

The only way anyone could question that, was if your house was a Cloned House on a new Clone Estate, where the Land Registry Records show Houses in the same Estate all selling for a much higher average (i.e. based on real Sale Price Data that is now logged with the Land Registry).

 

Once Houses are more unique and therefore much harder to value, then the Land Registry real Sale Price Data can only ever be used as a guide.

 

For example, if you live in a rural area, and the Houses near you are all shapes and sizes with varying amounts of land, then the spread of real Sale Price Data will be wide, and in a Recession any trend you could extrapolate from that would be downwards and wider still.

 

You can always argue you sold badly at the bottom of the Recession, and who could argue with that?

 

HTH

 

Cheers,

BRW

Edited March 3, 2010 by banker_rhymes_with
Typo

[HomerJSimpson]

There's nothing to stop people selling to "cash buying" companies that only pay 50% to 75% of the properties value. I don't see your case as much different.

[Smarterchick]

Thank you people, BRW I'm amazed you have the time for my trivialities, you are a star and a half with all you've had going on...but thank you and everyone else too, Bookie Too..Wow, I'm priviledged.

 

You have confirmed my thoughts, I just wondered what surprises might be in store as a result of this, I can't say exactly why I need this info, but this re confirms what I had in mind...Thank you. Once it's done I'll tell you why, but it may be a few weeks yet before it's done - or months as it's not mine but a friend I am helping...( wish I got paid for some of these things )

 

Smarter than some chicks, dummer than many!

[My Real Name]

However, even if there were creditors, so long as they were not secured (going hyperthetical now) on the property then the individuals responsibility will remain for the clearing of same would they not? The monies not being lent in the first place against the value or security of the property so thereby having no impact what the sale proceeds would bring? Who would question the price anyway if the debt were not secured?

It's conceivable that, if a person is made bankrupt, they would be forced to sell their home to realise the equity. If they had disposed of the home for far less than market value, it might be possible for the creditor to see through the sale as being artificial.

 

As brw states, howeever - who is to say what the market value of a property is, given that the market remains very illiquid.

[Smarterchick]

Indeed, but bankruptcy won't happen as I am a negotiator by second nature and any debts left will be full and finaled anyway at whatever the cost. This should work out just hunky dory, and I thank you for the observations. Total creditors are just under 15k and that'll be covered I reckon at closure.

 

It is fact though as you say if bankruptcy happened then they might look back at the sale, but the margin of differential is still relatively small and certainly if they felt at the revenue there was a suspect default in stamp duty with the purchase it would be small enough to rectify without too much hassle. Mmmm? wot fun... bankers can juggle, so can we

[spark911]

Any contract requires some "consideration" in return. As in, both parties must gain from the contract. So usually you have to at least sell it for £1 (see: The Independent newspaper was sold this week to another company for £1).

 

So go crazy and do what you want! Although note what "My Real Name" says, there are ways for creditors to get to you if you're doing it purely so that you no longer have assets for creditors to obtain - although I doubt many would do this unless you owe a lot.

[Smarterchick]

Any contract requires some "consideration" in return. As in, both parties must gain from the contract. So usually you have to at least sell it for £1 (see: The Independent newspaper was sold this week to another company for £1).

 

So go crazy and do what you want! Although note what "My Real Name" says, there are ways for creditors to get to you if you're doing it purely so that you no longer have assets for creditors to obtain - although I doubt many would do this unless you owe a lot.

 

 

Thanks for that. It's not for me but a friend and he has a relative who can't afford the full price of the property at true market value and my chums wife just died leaving him in total turmoil. he wants to keep the house in the family and he can still live there but will sell at the lower price just so his relative can afford it. They plan to renovate it, it's a Vitorian place and then sell it later at a higher profit. Trouble is the tax. He won't pay tax on the sale of the property as it's his home whilst it's in his name, but will have to pay tax when the profits are made and shared later as he want's to obtain the differentials he's lost in this current sale. It's not ideal, but it'll clear a few debts in the short term and sort his life out a little at this awkward time as he can't afford the mtg and a rather large 2nd charge loan he has now his wife has gone. It should work out okay and this is not done to avoid any creditors whatsoever.

 

Thanks for the help.

 

SC

[pompeyfaith]

sorry i was wrong

Edited March 26, 2010 by pompeyfaith

[spark911]

Thanks for that. It's not for me but a friend and he has a relative who can't afford the full price of the property at true market value and my chums wife just died leaving him in total turmoil. he wants to keep the house in the family and he can still live there but will sell at the lower price just so his relative can afford it. They plan to renovate it, it's a Vitorian place and then sell it later at a higher profit. Trouble is the tax. He won't pay tax on the sale of the property as it's his home whilst it's in his name, but will have to pay tax when the profits are made and shared later as he want's to obtain the differentials he's lost in this current sale. It's not ideal, but it'll clear a few debts in the short term and sort his life out a little at this awkward time as he can't afford the mtg and a rather large 2nd charge loan he has now his wife has gone. It should work out okay and this is not done to avoid any creditors whatsoever.

 

Thanks for the help.

 

SC

What do you mean by 2nd charge loan? Is there another charge over the property or any other restriction other than the mortgage? If so, usually they have to agree to its removal if the house is to be sold - so a creditor may refuse if it's being sold less than its value (altho not sure how much effort these big organisations put into finding its value).

[Smarterchick]

What do you mean by 2nd charge loan? Is there another charge over the property or any other restriction other than the mortgage? If so, usually they have to agree to its removal if the house is to be sold - so a creditor may refuse if it's being sold less than its value (altho not sure how much effort these big organisations put into finding its value).

 

As I said, there are no creditor issues here. The first charge mortgage AND the 2nd charge loan/mortgage will both be satisfied by the overall purchase by the relative so both will be paid in full at the time of sale. There is no way to circumnavigate such things as the solicitors take care of the discharging of all charges at point of sale. The sale price covers both., but thanks for pointing it out.

 

SC

[caro]

Your friend should consider the implications of capital gains when selling as it won't be his own residence.

 

 

http://www.hmrc.gov.uk/cgt/property/basics.htm

 

You don't say the age of the person, but if the seller needs to go into a home in the next seven years, it's possible that social services may question the sale and that could present a problem, as could inheritance tax.

 

HM Revenue & Customs: Gifts that are exempt from Inheritance Tax

[Smarterchick]

Your friend should consider the implications of capital gains when selling as it won't be his own residence.

 

 

http://www.hmrc.gov.uk/cgt/property/basics.htm

 

You don't say the age of the person, but if the seller needs to go into a home in the next seven years, it's possible that social services may question the sale and that could present a problem, as could inheritance tax.

 

HM Revenue & Customs: Gifts that are exempt from Inheritance Tax

 

Thanks Caro, I did warn him of this to a degree, but I hadn't thought of the fact he might go into a home. He is 67 so that could be an issue potentially and the difference we are speaking of in sale price is approximately £70k. His creditors all paid, they will not pose any trouble, but the relative will raise the profits on the property once the house is renovated and sold and it is at that time when the sale goes through in a year or so that he would have hoped to have had the residue cash - I warned of the capital gains issue and I just hope he has that tied up okay. You can take a horse etc...I know he is taking some advice on this, but I will pass this on as they should get this sorted earlier rather than later.

 

I wonder what the process might be of rather than my chum having to receive a large lump sum from any later sale, the money is gifted to him by this relative or just put into a bank account in the relatives name but with him as a signatory to draw on...? So many connotations..gets the grey matter working...

Thank you as ever...

[caro]

I believe the limit for a gift was about £3k a year a couple of years ago, although it may have gone up now.

 

If he is given the house and the relative has to go into a home in the next 7 years, the house will still be taken into account when assessing what will have to be paid for care home fees. At 67 there is a reasonable chance that a home wouldn't be an issue at this stage.

 

Age Concern may be able to offer some advice.