Buyer wants to do something odd with stamp duty

Sooler

needaspirin wrote:

Both you and the buyer win if you sell at £422000 and they pay the tax.

If they pay you £422000 then pay 3% stamp duty of £12660, they pay a total of £434660, saving £340 on your asking price.

Plus as mentioned, selling at £422000 cuts the EA fees.

Probably a weeze suggested by the EA to maximise their fees.

BargainJunky

When the market was slow here (Birmingham) a lot of agents were advertising their properties with stamp duty paid by vendor. I always thought that you needed to have the stamp duty 'in your pocket' as it could not be added onto your mortgage it was one of your costs like solicitors fees, searches etc. May be wrong tho!

I'd ask your solicitor for advice before accepting/declining the offer.

PoorDave

Penny_Farthing wrote:

Not sure. Apparently they were talking about doing 50 grands worth of work to it so I don't think they're short of cash.
Hmm

Maybe this is implying it needs lots of work in the hope you'll accept a lower offer

Penny_Farthing_2

We soon put them right on that one, PoorDave! It does need work but could be made decent with 20 grand not 50 unless they wanted to gold leaf the place!!

Penny_Farthing_2

I am going to tell EA that we want to accept a straight offer and not the stamp duty one as it's doing my head in!!

lilyann1

Yes it seems to me the EA might have suggested that you'll only accept the asking price.This way the EA gets more commission.
Seems very strange to put low offer in then increase it by such vast amount.

santana-mx3

As previously stated, the EA will prefer the higher official sale price because of their fee.

One other thing the buyer might like about the higher official sale price is that it will be registered with the land registry at the higher price. When he comes to re-sell and people try to check how much it sold for last time, they will see a higher value which he might hope will help him get a better resale price.

From the OP's point of view, the straight sale is better.

A house down our road had a sale agreed at £255k with the seller paying the stamp duty. However, in the end they decided on a straight sale at £250k which would have benefitted the seller but not the buyer. I don't know the reason why the deal was changed.

Sumostar

The benefit of getting the seller to pay for the stamp duty is that the buyer can legitemately get a mortgage on the "higher" asking price, but has the money that would have gone in stamp duty to spend on the property instead.

The EA fees might be slightly higher, but that depends on the EA fees srtucture. Some near me charge a fixed % whilst some operate a banding system. If the difference in purchase price does not move you into a new bracket then the fees would be the same.

bylromarha

santana-mx3 wrote:

One other thing the buyer might like about the higher official sale price is that it will be registered with the land registry at the higher price. When he comes to re-sell and people try to check how much it sold for last time, they will see a higher value which he might hope will help him get a better resale price.

I concur!

We've just bought a brand new house with a 5% discount. Land registry shows full price, meaning builder can ask for more on same house style in phase 2 of build.

Penny_Farthing_2

Sumostar wrote:

The benefit of getting the seller to pay for the stamp duty is that the buyer can legitemately get a mortgage on the "higher" asking price, but has the money that would have gone in stamp duty to spend on the property instead.

The EA fees might be slightly higher, but that depends on the EA fees srtucture. Some near me charge a fixed % whilst some operate a banding system. If the difference in purchase price does not move you into a new bracket then the fees would be the same.

I could understand this, Sumostar, if the buyer was having a 90% + mortgage but surely he won't have that percentage mortgage on a house at £435,000 which is steep for Cardiff?

There's something going on that I don't understand. It may not be a bad something but I either need to find out what the something is, or get them to give us a straight offer.