Buying a house below market value (not a family member) Problems and Benefits?

Robzig said:

I was really worried sick but I had a quick call with the vendor earlier. He told me that there's no need to panic at all and that he'll go through all the details when he gets back from his holidays. What a relief. I hardly slept the last couple of nights.

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Mink_uss said:

Hello, we are in the fortunate position of being offered the opportunity to purchase our first home below market rate from a friend of a friend. They just happen to be very considerate people and see it as being way over valued due to the housing crisis! They did have it valued and its being offered to us, off market for about 35-40% below perceived market value. We are not related in anyway.

What problems can this cause? Does it affect stamp duty? Is there any tax implications?

Or also what benefits, other than price can this cause? Does it give you more negotiating power with the banks due to a better loan to value rate,or does that not apply for first time buyers?We would still be getting a 90% mortgage on the agreed price.

Any advise would be welcome,as I'm sure it is a relatively unusual situation and finding info on the net is near on impossible.

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NoRegretsCoyote said:

Not quite.


They are within the OP's social circle and considerate to the point where they will give them a five- to six-figure discount on a house.

I am not sure how Revenue would be supposed to know the difference between a "family friend" and a "friend of a friend" in the circumstances, or how on earth a taxpayer would prove the difference. These definitions are pretty subjective and unfalsifiable. If I worked for Revenue the circumstances of the two transactions would look identical to me.

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