Hi all sifus,

Just wanna ask, the buyer ask to include 10% downpayment into the house loan.

I think the buyer don't have the 10% downpayment ready, or maybe wanna keep money for reno, so he ask to mark up price in SnP to include the 10% downpayment.

Are there any risks or potential wrong doings in this? I scared later the bank say can't do this method.

Thanks in advance!

This post has been edited by GTA5: Dec 2 2024, 02:56 PM

Last time I buy my house under the First Home Programme, even though my loan is 100%, I was still compelled to pay the 10% downpayment. Just the bank reimburse me later through the loan.

So the question is... is the seller willing to not receive the 10% downpayment? And the installment become very high lo.

But it has been done before la

This post has been edited by kens88`: Dec 2 2024, 02:57 PM

if the property can get that value by the bank panel valuers and the bank should be able to give the loan base on the mark up value

ive seen a lot of mark up loans being done

Are you the agent or the owner?

Bank wouldn't know that the price had been marked up.

Only the buyer, seller and SPA lawyer will know as usually the lawyer will prepare an additional 'variation' letter to indicate that the owner is giving some discount etc. in order for both parties to agree on the 'actual' selling price.

If you are the owner, be prepared to pay extra on legal fees as it will be based on the marked-up SPA price (but usually you can ask the buyer to absorb the differential amount).

I see. Thanks!

Should be no problem to be valued at 110%.

So which means after the bank disbursed the money to the seller bank to settle the loan, then only consider the balance as payment for the 10% downpayment right?

Is there possibility of fraud in this case?

Owner.

I see, thanks for your info!

you will need a written consent from owner that he/she will pay you back the 10% cos once your loan is done, your bank will disburse the $ to the owner

pls consult your lawyers

I am the owner haha

But as owner, the 10% belongs to me right?

Because logically since the buyer didn't pay the 10%, so when the bank disburse the loan to me, I get to keep the 10% right?

This post has been edited by GTA5: Dec 2 2024, 03:18 PM

is it increase the snp price?
the property kena rgpt tax or not?
if yes..then u need to pay higher tax cos of it

Yes
Yes
I see. Thanks!

Possible. The risk is on the buyer not the seller. The buyer need to make sure he can get the bank valuation at such mark up price, you need the agent & lawyer to cooperate with some panel bank as well.

Reason simple only. The agent want to close the sales. The bank also want to hit their target. The buyer want to own the unit without any upfront payment. You want to sell it without any possible penalty(RGPT must tell lawyer that it must be paid by buyer if any).

You only need such win-win-win-win arrangement. In fact, some of this arrangement is actually initiated by the banker for their troubled client through the agent. I disposed a unit under such arrangement last year, no issue to seller so far. Eventually the pressure will be on the buyer.

In fact, it will be better for seller because under the LDHN record, you are disposing a bigger value asset, you can purchase a bigger value item without triggering LDHN in near future.

nope, lets say you sold the property at 500,000 and the SPA is 600,000, the bank will pay you 90% of 600,000 which is 540,000, the excess you have to give the buyer back 40,000

I see. Thanks for the explanation!

Makes sense

Legally speaking, it is wrong, but many peoples are doing in mark up:

As long:
1) ur house bank value is high enough (eg bank value 700k, you sell 630 which is 90% of the bank value)
2) you as seller own the house more than 5 years (so no rpgt concern)
3) lawyer and agent willing to help in all way, bank provide bank loan to buyer do not detect.
4) Your agent fee also will be based on the lower selling price which is 630k instead of 700k

Buyer need to bear extra legal fee and stamp duty due to spa price is 700k instead of 630k.

This post has been edited by Jingle91: Dec 2 2024, 05:51 PM

No, your proceed is not based on formal SPA, lawyer will help to calculate based on actual agreed selling price which is lower than SPA. All money will go to lawyer first before they release to you.

I see. Thanks!

Ahh okok, noted

Buyer side will be more affected since need to pay more for lawyer fee, stamp duty fee etc..

Seller side maybe the rpgt?

My house also first home and 100% loan approved. No hanky panky. SPA price is the transacted price.

In my case, I nego with the owner to pay just 3% down-payment. This amount was later reimbursed to me by the lawyer when bank made the disbursement.

Seller also pays legal fees, no?

depends on arrangements..but usually buyer bear the cost

Depend you choose to have own lawyer to represent you or not. If seller choose unrepresented and use buyer lawyer to fill CKHT return forms, should be only 2k-2.5k

normally this situation need to sign two letter offer, one is for bank loan, another one (actual one) will be give to owner, seller and lawyer.
lawyer will pandai pandai dont mess up the letter offers

with the two letter offer, its should safe guard both seller and buyer , right ?

That said, seller's (owner) 10% downpayment is based on 700k or 630k?

If the latter, why the trouble and reason worth doing so by the seller?

This post has been edited by jojolicia: Dec 3 2024, 02:09 PM

True, would like to know the answer to this ques

Based on 630k.

When bank value is much higher than transacted price record, and seller only able to meet buyer who want to buy with mark up or seller want to sell it urgently.

Thanks for replying.

Latter.

The art of selling, expert seller sells at the price deemed attractive / hard to be resisted to the buyer, not selling at the price that no one want to buy even if it can get such market valuation. If there is no volume /buyer at such price tag, the effort = no effort / waste of time.

Ok, nice try.
Anyway, as a seller I will always sell bank valuation +10%, or +10% last transacted/ sold price in that locality (psft basis).

I take bank valuation value as 'a good to go' for your 90% loan threshold.

From the buyer side, where is the performance security to the seller in the absence of 10% dp payable.

Para added

This post has been edited by jojolicia: Dec 4 2024, 10:30 AM

Risk to seller is higher RGPT fees.
And if buyer back out u do not get to keep the 10% on top of that u have to fork out money to pay lawyer.

Exactly, nothing on S&P performance security.
Hot air buyers everywhere, ain't got time for this.

True, I also worried about this.

As I understand if halfway the buyer decided to cancel, the 10% downpayment is forfeited.

So there is the risk of buyer ffk halfway without this 10% as collateral.

This post has been edited by GTA5: Dec 4 2024, 12:53 PM