Shared Ownership Funding Options
Discussion
A bit of a complicated one I thought the people of PH may be able to help with.
A friend owns 30% of his house, the other 70% is owned by a housing association. He is looking to sell so went though the process of getting it independently valued as per his contract with the HA. The value was quite low but he was told that was the value and he cant take and MORE or LESS than that figure. He has now had 4 estate agents value it at around 25% more than the HA's independent valuation and is trying to work out how to take advantage of this. The HA aren't interested, they have told him thats the figure and he can appeal if he can find 3 examples of identical properties that have sold recently. This might be possible but then he only gets 30% of the figure he talks them up by.
He has the option to buy the remaining 70% himself at the lower than market value but can't get a mortgage at the moment so thats not a viable option.
One option I thought of is for him to effectively buy the remaining 70% at the lower value and sell 100% at market value all on the same day. So if he found a buyer who was willing to pay £market value, told the HA he wanted to buy the remaining 70% and completed both transactions on the same day. This would avoid him having to find any funding and allow him to take advantage of the difference in values and benefit from 100% what ever he gets over the HA's valuation.
Can this be done, are there any downsides/risks and are there any other options anyone can think of?
A friend owns 30% of his house, the other 70% is owned by a housing association. He is looking to sell so went though the process of getting it independently valued as per his contract with the HA. The value was quite low but he was told that was the value and he cant take and MORE or LESS than that figure. He has now had 4 estate agents value it at around 25% more than the HA's independent valuation and is trying to work out how to take advantage of this. The HA aren't interested, they have told him thats the figure and he can appeal if he can find 3 examples of identical properties that have sold recently. This might be possible but then he only gets 30% of the figure he talks them up by.
He has the option to buy the remaining 70% himself at the lower than market value but can't get a mortgage at the moment so thats not a viable option.
One option I thought of is for him to effectively buy the remaining 70% at the lower value and sell 100% at market value all on the same day. So if he found a buyer who was willing to pay £market value, told the HA he wanted to buy the remaining 70% and completed both transactions on the same day. This would avoid him having to find any funding and allow him to take advantage of the difference in values and benefit from 100% what ever he gets over the HA's valuation.
Can this be done, are there any downsides/risks and are there any other options anyone can think of?
Most housing associations have a clause where you can't buy an increased share and sell within a certain time frame (usually a year). Our one also had a 4 week period where they would attempt to sell the house, if they didn't in that time, then we were free to go and market it with an estate agent, still at the price they had stated though.
There should also be the option to get further chartered surveyors in for an independent valuation, the housing association should then be obliged to advertise it at the average price of all the valuations. Does cost around £100 a pop though.
There should also be the option to get further chartered surveyors in for an independent valuation, the housing association should then be obliged to advertise it at the average price of all the valuations. Does cost around £100 a pop though.
Voyeur said:
A bit of a complicated one I thought the people of PH may be able to help with.
A friend owns 30% of his house, the other 70% is owned by a housing association. He is looking to sell so went though the process of getting it independently valued as per his contract with the HA. The value was quite low but he was told that was the value and he cant take and MORE or LESS than that figure. He has now had 4 estate agents value it at around 25% more than the HA's independent valuation and is trying to work out how to take advantage of this. The HA aren't interested, they have told him thats the figure and he can appeal if he can find 3 examples of identical properties that have sold recently. This might be possible but then he only gets 30% of the figure he talks them up by.
He has the option to buy the remaining 70% himself at the lower than market value but can't get a mortgage at the moment so thats not a viable option.
One option I thought of is for him to effectively buy the remaining 70% at the lower value and sell 100% at market value all on the same day. So if he found a buyer who was willing to pay £market value, told the HA he wanted to buy the remaining 70% and completed both transactions on the same day. This would avoid him having to find any funding and allow him to take advantage of the difference in values and benefit from 100% what ever he gets over the HA's valuation.
Can this be done, are there any downsides/risks and are there any other options anyone can think of?
This can't be done because to be able to sell 100% of the property to the buyer, he needs to be the legal owner of it. You can't use the buyers funds to purchase the remaining 70% and then sell it to him at the increased price a few hours later!!A friend owns 30% of his house, the other 70% is owned by a housing association. He is looking to sell so went though the process of getting it independently valued as per his contract with the HA. The value was quite low but he was told that was the value and he cant take and MORE or LESS than that figure. He has now had 4 estate agents value it at around 25% more than the HA's independent valuation and is trying to work out how to take advantage of this. The HA aren't interested, they have told him thats the figure and he can appeal if he can find 3 examples of identical properties that have sold recently. This might be possible but then he only gets 30% of the figure he talks them up by.
He has the option to buy the remaining 70% himself at the lower than market value but can't get a mortgage at the moment so thats not a viable option.
One option I thought of is for him to effectively buy the remaining 70% at the lower value and sell 100% at market value all on the same day. So if he found a buyer who was willing to pay £market value, told the HA he wanted to buy the remaining 70% and completed both transactions on the same day. This would avoid him having to find any funding and allow him to take advantage of the difference in values and benefit from 100% what ever he gets over the HA's valuation.
Can this be done, are there any downsides/risks and are there any other options anyone can think of?
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