5% gifted deposit.. what does that mean?

fimonkey

Hi All,

There is a 2 bed flat for sale with two local estate agents for 'offers over £140K'. One of the ea's is also offering 'up to 5% gifted deposit'.

Does this 'gift' come from the vendor? If so why aren't both ea's offering it?

It looks like a private sale, (as in its not a developer or new build - ot looks lived in).

If it is coming from the Vendor, how does it work? If a buyer is interested but already has a deposit, can they then presume that the real asking price of the flat is actually £133K (i.e 955 of £140K)? If that is the case is it worth going in with a lesser offer than 133K?

Your advice and thoughts much appreciated,

Thanks

seabright

They'll probably offer it as an "allowance", so you'll pay the full price and you'll apply for a mortgage based on the full price but the seller will deduct the 5% from the amount payable - we call it an allowance.

However, lawyers now have report to the lender where there is an "incentive" and this sounds like it would qualify. They'd probably re-assess what they consider to be the sale price and the amount they'd lend you acordingly.

Another point to consider is this - if someone selles a property at an undervalue and then goes bankrupt, the trustee in bankrupcy can claim the property back from the new owner (potentially you) because the bankrupt person has tried to rid themself of assets in such a way as to not repay their creditors what they are due.

As to why both EA's aren't offering it? Dunno, sorry!

Richard_Webster

However, lawyers now have report to the lender where there is an "incentive" and this sounds like it would qualify. They'd probably re-assess what they consider to be the sale price and the amount they'd lend you acordingly.

Agreed, so if the lender will reassess its LTV ratio then you might as well pay the reduced price without these silly "gifted deposits" and save £70 SDLT as well in the process.

fimonkey

Thanks guys,

That just sounds too complicated! As a maybe FTB (only just testing the water by checking rightmove at the moment n not sure if will commit to buying) a property at £133 is within my affordability but the £140 is not. So they are effectively excluding ppl like me from affording at their property?? (not getting into offer prices etc, its been on property bee a LONG time and they haven't ever dropped their price)

How very very odd

seabright

fimonkey wrote: »

How very very odd

Yep, that pretty much sums it up. People are weird.

bap98189

fimonkey wrote: »

a property at £133 is within my affordability but the £140 is not.

Crikey if houses are available for £133 I'll take a dozen. :rotfl::rotfl::rotfl::rotfl::rotfl: