Opinions on £1000 Cashback Please

reheat

Richard_Webster wrote: »

The cashback has to be revealed to the buyer's lender so it is just a price reduction. In terms of price negotiations on a £180K property £1K isn't all that significant - a buyer might offer £5K less and the haggle is whether they end up getting £3.5K or £1.5K off.

Depending on who the agent's pet conveyancer is and their ability to slow down/speed up the transaction, you might even be better off offering to reduce the price by £1K if they don't use the agent's convenaycer!

So are you saying the buyer would have no better chance of boosting their deposit by £1000? Or would the lender allow it to be viewed in this light?

charliee_3

i would never get involved with the EA's conveyencer unless you have to.. as a FTB in a straightforward purchase you can shop around and get your conveyencing done for about £350. our vendors used the estate agents conveyencers and they were a NIGHTMARE to deal with, plus they were MUCH more expensive than going direct to a proper solicitor. The only people to benefit from this at the EA's...

if you can afford to lose £1000 off your asking price just be prepared to accept an offer that is £1000 lower than your original acceptance limit...

if you are unconvinced ask who they use, do some research, so if you can find any reviews and try and call them yourself, see if you get through to a real person....

LisaLou1982

overandout wrote: »

My friend will not have any vested interest to the property, the EA does. My friend wouldn't really earn anything from the recommendation, the EA possibly does.

As I said, personally I wouldn't go with a conveyancer that is recommended by the EA. As I wouldn't go with a mortgage advisor recommended with the EA.....

Of course the EA has a vested interest in the property - they will have that interest regardless of whether you buy it and whether or not their recommended conveyancers are used. However, that will not make any difference to you. The EA will earn money from selling the house - does that make you any less likely to buy it? Of course not. They run a business and through that business they earn money, same as everyone else.

Most EA's will either have linked conveyancers who are part of the same company, or linked solicitors who pay them a referral fee locally. Again, why should this make any difference to you? The referral fee isnt paid by you!

Finding a solicitor and buying/selling a house isnt about the cheapest service that you can get. Its about finding someone who you feel will give you the service that you expect. For some, this will be dictated solely by budget - for others it will be by recommendation. I find it hard to believe the amount of people that come on this website and state that they would never use a solicitor that the EA recommends - a strange thought in itself since its the EA's that deal with the solicitors on a daily basis and will be able to tell you ones which they have good/bad experiences with.

I dont understand why you wont use a mortgage advisor recommended by the EA - again, provided that they have a deal which is good for you, what difference does it make? All companies get paid on referrals for one thing or another. Would you refuse to use a builder because a friend recommended a friend of theirs and then got a kick back from it?!

Based on all of the above, i would recommend that you speak to your EA and see what they recommend apart from their in house solicitor. I used to work for Countrywide and whilst we recommended our own conveyancers, I also used to recommend local ones who i knew were good to deal with and that i had no problems with. That said, a cashback deal shouldnt be the make or break decision for you - weigh everything up

Richard_Webster

Quote:
Originally Posted by Richard Webster
The cashback has to be revealed to the buyer's lender so it is just a price reduction. In terms of price negotiations on a £180K property £1K isn't all that significant - a buyer might offer £5K less and the haggle is whether they end up getting £3.5K or £1.5K off.

Depending on who the agent's pet conveyancer is and their ability to slow down/speed up the transaction, you might even be better off offering to reduce the price by £1K if they don't use the agent's convenaycer!
So are you saying the buyer would have no better chance of boosting their deposit by £1000? Or would the lender allow it to be viewed in this light?

Yes, say house was selling for £180K and buyer could afford an 90% mortgage (£162,000) because having allowed for legal costs, SDLT, etc they have £18,000 left. If there is an cashback of £1,000 then the effective price is £179,000 and most lenders will reduce their offer to £161,100 which means buyer has to find £17,900. If they thought they could get a £162K mortgage and only have to find £17K because of the cashback then they would probably be mistaken.

Solicitors effectively have a legal duty to tell the lender about any such allowances/cashbacks.

There may a few lenders who will still agree to this sort of thing, but I would have my doubts, as this kind of allowance is all very reminiscent of artificial inflation of house prices by builders etc and lenders caught colds on that so they are now being very careful.

reheat

LisaLou1982 wrote: »

Of course the EA has a vested interest in the property - they will have that interest regardless of whether you buy it and whether or not their recommended conveyancers are used. However, that will not make any difference to you. The EA will earn money from selling the house - does that make you any less likely to buy it? Of course not. They run a business and through that business they earn money, same as everyone else.

Most EA's will either have linked conveyancers who are part of the same company, or linked solicitors who pay them a referral fee locally. Again, why should this make any difference to you? The referral fee isnt paid by you!

Finding a solicitor and buying/selling a house isnt about the cheapest service that you can get. Its about finding someone who you feel will give you the service that you expect. For some, this will be dictated solely by budget - for others it will be by recommendation. I find it hard to believe the amount of people that come on this website and state that they would never use a solicitor that the EA recommends - a strange thought in itself since its the EA's that deal with the solicitors on a daily basis and will be able to tell you ones which they have good/bad experiences with.

I dont understand why you wont use a mortgage advisor recommended by the EA - again, provided that they have a deal which is good for you, what difference does it make? All companies get paid on referrals for one thing or another. Would you refuse to use a builder because a friend recommended a friend of theirs and then got a kick back from it?!

Based on all of the above, i would recommend that you speak to your EA and see what they recommend apart from their in house solicitor. I used to work for Countrywide and whilst we recommended our own conveyancers, I also used to recommend local ones who i knew were good to deal with and that i had no problems with. That said, a cashback deal shouldnt be the make or break decision for you - weigh everything up

Thanks. I agree.