When I heard about the term straw, I was flummoxed. I thought it was something related to interior designing. Later my lawyer explained what is a straw buyer in real estate. I will share with you the meaning of straw buyers in real estate.
Get home loans at the lowest interest rate and avoid hefty paperwork at NoBroker!Define straw buyer:
A straw buyer is someone who purchases a property on behalf of another person. When the real buyer cannot complete the transaction for some reason the person who purchases the property on behalf of the real owner is known as the straw buyer. Using a straw purchaser to buy a property is considered illegal if the transaction involves fraud or purchasing goods for an individual who is prohibited from making the purchase.
A straw buyer is used not only to purchase houses but also automobiles.
How does straw buyer work?I will share with you an example where you will need the straw buyer to help you out. Suppose, you have poor credit history and you cannot avail a home loan. In this condition, the straw buyer will make the transaction on your behalf so that you can buy the house. As a buyer, you need to enter into an agreement with the straw buyer and promise to pay the amount required to buy the house. You may also need to compensate the straw buyer for using his/her credit.
Generally, banks dislike the use of straw buyers to purchase a property as the arrangement increases the risk of default on the home loan. The real buyer can be legally responsible for using a straw buyer if any risks occur.
I hope you know the meaning of straw buyer now.
Read more:
What is novation in
real estate?
What is appurtenance in
real estate?
What is underwriting
real estate?
Your Feedback Matters! How was this Answer?
Shifting, House?
✔
Lowest Price Quote✔
Safe Relocation✔
Professional Labour✔
Timely Pickup & Delivery
Intercity Shifting-Upto 25% Off
Check Prices
Intracity Shifting-Upto 25% Off
Check Prices
City Tempo-Upto 50% Off
Book Now
What is a straw buyer in real estate?
Anamika
271 Views
1
3 Year
2022-07-19T10:21:51+00:00 2022-07-20T11:04:23+00:00Comment
Share