Trying to get out of a bad vendor finance deal

Vendor finance can be structured almost any way you want.

The premium is usually built into the interest on the finance - not the cost of the property though.

For eg; whatever the current rate is, the financee might pay the Vendor 2% above that rate, or maybe even more - it's subject to negotiation.

 

Quite an interesting scenario. I wonder if the tax ramifications have been properly considered. Some of the houses may be more "loaded" with CGT than others.The vendor finance sale will trigger a CGT liability on signing- yet the seller is not getting the funds for a few years. Hopefully the trustees of the estate have considered this when making distributions (assuming the Will doesn't specifically give particular houses to particular kids- but if it does it raises the question of testator's intention and whether the trustees have apportioned the gifts and the stamp duty issues ) https://www.osr.qld.gov.au/legislation-rulings/public-rulings/duties/da124-1.shtml
Putting that aside I'm getting the feeling this lady wants her cake and eat it as well. It's almost as if she wants to rid herself of assets so she gets the dole. I think she would be better served selling it at arms length if she needs the money (assuming the trustees have already distributed and it is too late to delay the testamentary trust).
This has drama written all over it.

 

Not to mention disposing of the property wont help with the pensi ok n because of the deeming rules. It will be considered an asset for 5 years after disposal and presumed an incomenis recieced from it possibly.

 

She's not looking to double dip on the pension, this would be in place of the pension.

However there have been some new developments to this saga. It's on a 405sqm block, not 600sqm (which have been commanding 650-750k prices). There are comparable 405sqm LMR sales in the high 400's, but the most recent ones were from about 9 months ago. Given that the market has moved a lot since then I was confident it was worth in the low to mid 500's at least. Certainly more than the 450k being offered.

And then another surprise - once I had the actual address I was able to look up the real zoning...it turns out it's not LMR, it's MR zoned, which I think is worth even more. On this basis I'm thinking it's potentially an easy 550k or more. That's at minimum 100k more than what's being offered.

 

Her brother may not be aware of that, does anyone know his intentions and why he wants to buy it? Presumably he also inherited property from the mother as well?

Generally as part of the Estate each 'item' is valued and that price may be the price is was valued at which is why that is the sum.

It could be all very innocent. Vendor finance with an unrelated party may have better terms but between siblings there may have been seen to be no need.

Why is your friend now having doubts?

 

Because her family has seen too many bad deals and don't want to see another. When everyone found out about this some big WTF's were voiced.

Yes there may not be anything malicious about this at all, it's could be two clueless parties being advised by the wrong people.

At a minimum if this were my deal, I would want the interest rate to be much higher AND the sale price to be at market rate (at the very least).

 

With that many typos Terry I think you are on your mobile or on the turps. Which is it?

 

I nearly wrote an anatomical word didnt i. Mobile phone.

 

That's a dog of an excuse @geoffw

Bless him & the whole Penfold family.

 

Apologies @geoffw I was home, home on the Grange. Where the deer and the buffaloes range......

 

Apologies @geoffw I was home, home on the Grange. Where the deer and the buffaloes range......

 

Always @geoffw - the first bottle to check that it's drinkable, and the second for enjoyment.

 

Yes Rolf asks a good question. Why is vendor finance being considered at all?

 

@geoffw that would be because @Scott No Mates was on his mobile or on the turps. Give the above above post post it would seem to be both both.

 

@BuyersAgent Methinks that I was ftill pifft when I wrote that.