Asking vendor to pay stamp duty

sportbeth

Bit of a dilemna, we're off to see a place that we really fancy tomorrow. #

I have it on pretty good authority that the vendor has dropped the price a couple of times so hope he/she is keen to move ASAP.

We currently have no chain behind us and the deposit at the ready and mortgage agreed in principle. But stamp duty will be a whoppin g £8,100,

We're thinking of saying that we'll either offer £10k under the asking price or buy at the full asking price if the vendor pays our stamp duty. Is this a reasonable deal to offer the vendor? Has this been done before?

mr_fishbulb

sportbeth wrote:

We currently have no chain behind us and the deposit at the ready and mortgage agreed in principle. But stamp duty will be a whoppin g £8,100

Jesus! How much is the house?

JennyW_2

But stamp duty will be a whoppin g £8,100

Yikes :eek:

If it were me, I'd be inclined to offer £10K under the asking price to cover this. You must be buying a palace......

distilled

As stamp duty is 3% on properties over £250K, hardly a palace but I agree. Lower your offer and see what the response is.

Good luck

nmiah786

Correct me if I am wrong but the asking price is £270k hence the stamp duty at 3% of £8100!!!

Slider

If my maths is right, your stamp fee suggests an asking price of 270k. IMHO, there is a real problem for sellers caught in the region of 250 - 280k, due to the punitive effect of the 3% stamp.

As always it comes down to what the house is worth to you, but I would think you should be looking at paying no more than 95% of asking, so ideally around 256k. This number makes the stamp payable even more difficult to swallow.

For a compromise, if it really turns out to be the house you want, try to get the vendor to pay 2% stamp (you would have to pay 1% even if you were buying under 250k), and reduce to say 265.

lush_walrus

I think it may be a bit ambitious to ask the vendors to pay the whole stamp duty, but anything is worth a try. Effectively you are asking for them to accept an offer £8000 below whatever your offer will be.

Probably the best would be to negotiate that they pay half of it, thats quite common. Or to see if there is a way to meet a compromise. Try to get some more info out of the EA such as whether the vendors have somewhere to go to and therefore in a rush, etc.

distilled

Well done nmiah someone has helped themself to my calculator!!!

sportbeth

Slider wrote:

If my maths is right, your stamp fee suggests an asking price of 270k. IMHO, there is a real problem for sellers caught in the region of 250 - 280k, due to the punitive effect of the 3% stamp.

As always it comes down to what the house is worth to you, but I would think you should be looking at paying no more than 95% of asking, so ideally around 256k. This number makes the stamp payable even more difficult to swallow.

For a compromise, if it really turns out to be the house you want, try to get the vendor to pay 2% stamp (you would have to pay 1% even if you were buying under 250k), and reduce to say 265.

Yep, that's the asking price (glad to see someone knows their figures, 800,000 - I wish! If I had that kind of cash I'd just blow £750,000 on the pad and worry about the stamp duty later!!!)

That's a good idea asking them to pay 2% on the stamp duty. And the 95% of the asking price idea is interesting. Every estate agent we've spoken to in Kent insists that the housing market is still booming and we have to pay the asking price. So why has this guy had it on for a year and dropped it twice?

We have seen some houses in the area advertised as "stamp duty paid" but none of them seem to be in the area we want. I guess giving the seller the option on either paying towards stamp or dropping the price might seem like a bit of a fairer haggle. All depends on how much equity they've got in the property I guess.

Will come back and update on this though in case it's of any use to anyone else

sportbeth

Oooh forgot! I guess I should clarify this little point too.

We've got a 5% deposit in cash arranged, got the mortgage in principle too, but according to everyone we've spoken to, for a first time buy we can stick the stamp duty on the mortgage but that then means we will be paying a higher percentage than we would on a 95% mortgage.

So ideally we want to avoid the higher percentage. The theory on this is that we would automatically offer £10k lower than the asking price as a starting point for negotiation, but if the vendor would agree to putting it in the contract that we have our stamp duty paid by them then we get the mortgage but still get a good deal on it.

sm9ai

One thing I heard somewhere which has always stuck is...

If you aren't embarressed by the offer price you put in, then you are offering too much.

Use that as a guide and you will a good price. But if they have already reduced the asking price twice then I'm sure they would happily accept less. The agent is just playing around to get a higher fee.