"If this is what he thinks, I am sorry but he needs a reality check...the valuation of the property by the lender would reveal any abnormalities or inflated pricing I am sure! "
This comment made me LOL... I had to stop reading the email at this point...
Also the 7k grant can be leveraged.... When applying for finance some banks will let you use this as part of the deposit thus increasing the amount you can borrow... So the difference in prices will likely work out more then 7k...
