Cash Back

Quiggy_2

I am considering offering a "Cash Back" incentive to potential purchasers of my property. My logic is that most buyers are being asked to put down very large deposits before they can obtain a mortgage, thus leaving themselves with little or no savings/working capital after purchase. At least with a cash back promise the purchaser can put down a larger deposit and secure a better mortgage deal.

Has anybody tried this before and if so were you successful

Mini_Bear

Being able to offer a cash back incentive is dependent on the valuation of your property. If the price you agree to sell at is more than the valuation, no amount of cashback will make a difference. If however the valuation is spot on with your agreed sale price then offering a cashback incentive really shouldnt be an issue.
Trapping FTBs who have not saved an adequate deposit is surely how we got into this mess with negative equity and the like.
Im not sure how your solicitor would feel about offering such an incentive. If they are good i imagine they will say - price the property correctly and you will attract a better quality of buyer.
Good luck with what you decide.

Quiggy_2

Thanks Mini Bear.

My idea was based upon a potential buyer being asked to put down 15% deposit. The House is fairly priced at £210.000 (4 bed semi) consequently the buyer would need a £31,500 deposit. If I were to reduce the price to £200,000 the buyer would still need to find £30,000 deposit. As this represents their entire savings, I felt that the cash back incentive would be most welcome

maninthestreet

How much cashback were you considering offering (5%?), and how would the buyer get their hands on this money prior to the exhange or completion?

Quiggy_2

My thinking was £10,000, And the moneys would be tranferred via Solicitor at completion. I have to stress that I have never done this before so there may be issues that I am blissfully unaware of, hence the posting

Kynthia

Someone in my family successfully did this when selling mid last year. It went through the solicitors so that the money was held safe until completion.

It was actually the Estate Agent who suggested it, I can't remember the name for it. They pointed them towards a solicitor who was familiar with the process. So maybe talk to your Estate Agent.

Good luck.

paulsin

Offering a cahback just gives the buyers info that you can afford to reduce the price by £x. If they are in a sound position they will request the house price to be reduced by £x as over the course of the mortgage that will be worth more to them.

Robert_Sterling_3

Builders could build a lot of flats.
Overprice them when offering them for sale.
Sell some of them via a "good" part exchange offer.

The buyer could appear to get a very good price for their own house and no discount on the flat they are buying.

After a number of flats are sold in this and other "creative ways" they have a number of flats sold at the original high asking price. They will appear to have sold at this price on the Land Registry website and on Net House Prices website. When valuing other flats still for sale the valuer will check the prices of similar flats and give a value similar to that at which the other flats have been soil.

I do not know if anyone has ever done this with a large block of flats in **********. I think the idea came to me in a dream.
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I think the OP is being creative.
If it catches on soon all houses will appear to have cost more than they really did cost because the price shown by the Land Registry and Nethouseprices will not be the "true" price that the seller received or the "true" price at which the buyer bought. I will not go so far as to suggest that it is a conspiracy to defraud the lender ... or is it?

I will stick with my idea that it is creative.