Buyers getting around the 100% problem with vendors cashbacks

Conrad

Another change to throw into the pot.

Just wanted to report I'm getting frequent cases now where vendors notionally give the buyer a cashback, although no money changes hands. Some lenders such as Halifax are quite happy as long as the LTV based on the open manrket value does not exceed 90%.

Hitherto, the two parties had to be blood relatives, but this stipulation has been removed.

This effectively means FTBs are once again buying without physical deposits.

I think this is another example of the issue I have with classical economics, which, is merely a patchwork of things past. It simply fails on many counts to spot the all important new trends.

ad9898_3

Conrad wrote: »

This effectively means FTBs are once again buying without physical deposits.

And they think this is a good thing ??, I bet it's the same people that buy £10 shop vouchers on ebay for £11, truely shocking the lack of intelligence that is around in the current situation.

The bull trap has definitely reared it's head in the media, I just can't understand people wanting to buy in this economic climate, and thats to say nothing of the vertical cliff that prices are falling off since Oct 2007.

Conrad

ad9898 wrote: »

I just can't understand people wanting to buy in this economic climate, and thats to say nothing of the vertical cliff that prices are falling off since Oct 2007.

I think it's down to this parallel (too many l's for thickie like me) Universe thang, where a great many people simply drift through life without the financial focus others have. I would say most people I see have not a clue what the credit crunch is, and no interest in the big picture.

On one level I'm inclined to think them morons for having so little interest in the world around them, on the other perhaps they are the contented ones, not riven with jealousy, unconcerned about economic armageddons - as long as they have thier footie, thier mates and a nice pad, hey ho.

Psychologists amongst you may be interested in research that demonstrated a clear link between pessimism and fear of loss of money tickets (status tokens).

Could it be, the more venomous HPCers are overly concerned with percieved comparative status? ("How can all these thick, OK reading spend thrifts have a better house (status token) than me, an intelligent cautious responsible individual" - and deep down "are these thick alpha males more robust compared to me because they have a willingness to accept greater risk - am I weak??:eek: ")

silvercar

Conrad wrote: »

Another change to throw into the pot.

Just wanted to report I'm getting frequent cases now where vendors notionally give the buyer a cashback, although no money changes hands. Some lenders such as Halifax are quite happy as long as the LTV based on the open manrket value does not exceed 90%.

Hitherto, the two parties had to be blood relatives, but this stipulation has been removed.

This effectively means FTBs are once again buying without physical deposits.

I think this is another example of the issue I have with classical economics, which, is merely a patchwork of things past. It simply fails on many counts to spot the all important new trends.

Surely the valuation needs to come in at inflated price?

bubblesmoney

silvercar wrote: »

Surely the valuation needs to come in at inflated price?

surely that wouldnt be a problem for the 'committed' buyer and seller as they would find 'ways' to get such a valuation from a RICS surveyor. wasnt it the same RICS surveyors who gave inflated valuations for the new builds up until recently.
when i was looking to buy houses where i used to live earlier, the was a new develoment where even if i didnt want it they were trying to con me into a shared ownership scheme for an inflated price of nearly 200k for a 3b semidet. just a hundred metres away was a nearly new detached 3b house for a lot lesser. anyway looked around and got a 4b detached for 135k and am now wondering if even that was too much. anyway whats done is done, will face the music when its time to sell for me, until then will concentrate on clearing the mortgage ASAP. just a few hundred metres from my house is a new build still (trying to) selling semidetach 3b houses for atleast 50k more (after discount supposedly) than my 4b detached house when i last went there

piggeh

Conrad wrote: »

Could it be, the more venomous HPCers are overly concerned with percieved comparative status? ("How can all these thick, OK reading spend thrifts have a better house (status token) than me, an intelligent cautious responsible individual" - and deep down "are these thick alpha males more robust compared to me because they have a willingness to accept greater risk - am I weak??:eek: ")

I have thought that in the past (about whether I am too worried about taking on additinoal risk such as a mortgage and maybe need to 'be a man' about it). But then on the other hand, I think there's also a lot of thick people overstretching themselves financially.

So I guess it's 6 of one and half a dozen of the other.

I do wonder though if consumer behaviour within the UK will really change. It wasn't the UK's credit bubble that burst, it was US sub prime. I know that directly affected our banks because of their purchasing of sub prime debt, but for the consumer many did not meet that criticality point that consumers in the US reached. For many they may well still be carrying on the same consumer behaviour as before and maybe it's the same in housing (ie people still seeking out ways to buy without a deposit). I doubt the majority of people in this country will be majorly affected by the 'credit crunch' and wont learn anything from it.

Darth_Marty

Conrad wrote: »

I think it's down to this parallel (too many l's for thickie like me) Universe thang, where a great many people simply drift through life without the financial focus others have. I would say most people I see have not a clue what the credit crunch is, and no interest in the big picture.

On one level I'm inclined to think them morons for having so little interest in the world around them, on the other perhaps they are the contented ones, not riven with jealousy, unconcerned about economic armageddons - as long as they have thier footie, thier mates and a nice pad, hey ho.

Psychologists amongst you may be interested in research that demonstrated a clear link between pessimism and fear of loss of money tickets (status tokens).

Could it be, the more venomous HPCers are overly concerned with percieved comparative status? ("How can all these thick, OK reading spend thrifts have a better house (status token) than me, an intelligent cautious responsible individual" - and deep down "are these thick alpha males more robust compared to me because they have a willingness to accept greater risk - am I weak??:eek: ")

I like it..............

Thrugelmir

Conrad wrote: »

Another change to throw into the pot.

Just wanted to report I'm getting frequent cases now where vendors notionally give the buyer a cashback, although no money changes hands. Some lenders such as Halifax are quite happy as long as the LTV based on the open manrket value does not exceed 90%.

Hitherto, the two parties had to be blood relatives, but this stipulation has been removed.

This effectively means FTBs are once again buying without physical deposits.

I think this is another example of the issue I have with classical economics, which, is merely a patchwork of things past. It simply fails on many counts to spot the all important new trends.

So how are buyers managing to exchange contracts without finding a say 10% deposit?

dopester

Darth_Marty wrote: »

I like it..............

Yes. The lard-heads will keep buying property at current levels and save the economy and make themselves rich, in a full-on bear market, a once in a 100 year crisis ect.

Their bravery will make it all better. :rolleyes:

chambta

RBS group aren't touching gifted equity with a barge-pole unless it's a family connection and the valuer backs it up.

PasturesNew

Years ago, to get a mortgage you had to save your pennies towards your deposit. You then made an appointment with the local bank/BS manager (where that account was usually) and took your book in. You were interviewed and he'd decide if you got a mortgage.

He'd open your little savings pass book and look how much deposit you had in there .... and then he'd keep your book.