As ubiquitous points out, if you do everything above board and openly, then there really is no issue - unless the lender has an issue with it.
If I buy a house for 300K and the developer gives me a car, I am still only going to be borrowing a % of the 300K from the lender.
If, however, I tell the lender that I am paying 310K and I am not then I am lying to the lender.
The big issue here is that this purchaser can't buy unless they involve a keen vendor in a lying exercise. The vendor is keen - he wants to sell this property but all the signs are screaming that this is going to be a disaster.
As regards other mechanisms...much will depend on the deal struck - but there are such significant stamp duty, gift tax, CGT, implications that the solicitor needs to be very careful as to how it is structured so that if it ever becomes necessary to sue on the deal, that the contract will not be thrown out of court because its fraudulent.
"If thats the way they want to conclude the deal and it costs you nothing and you haven't received any other offers - don't pass up a good opportunity!"
And if they can't complete, and he sues on the Contract, and the Court throws the Contract out...................
mf