Johnny asked 6 years ago
Hi Sir,
I am planning to buy over my parents house. They are selling for a market value. However since buying from parents, they dont demand 10% downpayment to be paid to them as they are selling to the child.Anyway we will be applying for loan 90% and the money will be transferred to parents as part of the process.
Question: Legally is it ok and doable to sign SPA for this without having to pay downpayment as owner(parents) dont require that?
KCLau Staff answered 6 years ago
You can use the same lawyer to do the Sales and Purchase Agreement, and bank loan as well.
I think there is no problem with the 10% deposit. As in normal transaction, the lawyer keeps the down payment from buyer in trust and make sure everything is completed before releasing the fund to the seller.
In your case, you can talk to the lawyer and they will help you with the arrangement, as long as your parents (seller) and you (buyer) agree with it.
Do consider another option of gifting – you could save the stamp duty which is quite a sum too. The lawyer shall give you the advice on the best arrangement that is cost-effective.
You can also talk to a few lawyers to see who can offer you the best arrangement.