Hi All, We've recently come across the opportunity for a property transaction where the buyer pays a higher price for the property (as long as bank valuer report is sufficient), then gets the loan amount approved and the seller gives a "cashback" or "rebate" amount of money back to the buyer to use toward the property development. I've heard of this done in a smaller manner e.g. $7000 by residential estate developers to off the plan buyers, but a what about a larger transaction equating to around e.g. $30K? I was told there would be a separate invoice by the company (with GST) and billed toward landscaping contribution or similar. Anyone heard or done something similar or have a comment? Tam
Hi Tam
Yes there is nothing new in that and it used to be done all the time.
Course these days you are required to declare it to your lender and the valuer and he / she will adjust the price accordingly.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Agree with Richard.
You will find any rebates will be taken into account when the valuations are done so will come in lower, so you will still have to meet the savings requirements of the lender (i.e can't use the rebate as your deposit equity).
Cheers
Tom
Thanks for your comments guys. We're actually the sellers not the buyers. A proposal was suggested to us in this manner.
Make sure you get legal advice – don't use a conveyancer for this sort of thing as there are many issues.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry. Taken that onboard.
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