Would you be offended if someone offered under asking price?

sunshinetours

Most countries have some sort of property transfer tax and many are progressive i.e higher percentages only charged on relevant portions over each threshold.

increasing the lowest rate or reducing lowest threshold will have a short term effect on housing market which is fragile enough as it is

As Conservative heartland is the SE of UK where property is at its most expensive there will be very little appetite for increasing tax that will affect their core voters and first time buyers on these areas

martinsurrey

DRP wrote: »

Unless the revised SDLT threshold/rate gives the govt the same revenue as the existing system, then starving children will have their school milk taken away from them and the unemployed won't be able to afford sky TV.

DRP wrote: »

It would be interesting to calculate what % SDLT would be required to match the current system...

I had to do just that for an exercise for work (and no I don’t work for Gov) and its painful, you need to model the assumptions for house price distribution

I used the land registry sales distributions from their monthly reports.

You also have to assume what relationship you want the new rates to have. I settled on the same bands and the rate between each band increasing by the same amount (so identical steps between 0-125k-250k-500k-1m-2m

The rates that dropped out are

0-125k 0%

125-250k 2.5%

250k-500k 5.0%

500k-1m 7.5%

1m-2m 10%

2m+ 12.5%



So on a £240,000 house you would pay £2,875 (being the 115k above 125k @ 2.5%)

There are plenty of assumptions in there, but it gives a tax neutral solution to the issue.


*****
Edited this post to update my numbers using September 2012 land reg data (the data in the original post was very old and the market has changed since then)

ukcarper

So as I said earlier the simplest solution is to make the increase bigger say 6% instead of 3% this would avoid the big jump at break point without effecting lower band.

Tancred

sunshinetours wrote: »

Most countries have some sort of property transfer tax and many are progressive i.e higher percentages only charged on relevant portions over each threshold.

increasing the lowest rate or reducing lowest threshold will have a short term effect on housing market which is fragile enough as it is

As Conservative heartland is the SE of UK where property is at its most expensive there will be very little appetite for increasing tax that will affect their core voters and first time buyers on these areas

But tax is already high as it is, and it's not about increasing it but modifying its structure, so that instead of the middle income buyers being hit, the pain gets shifted upwards towards the £500k+ bracket. In the south-east £300k only gets you a modest property - very modest in some areas - so the government can't assume that buyers in the price range are wealthy.

mrsbmartin

Well, following on from GreenSaints (ie giving an opinion on the OP's original question), I say this....

Study The Market...work out what the house is worth to you, put in an offer that YOU are comfortable with and negotiate from there if necessay. Decide on your max price before you open negotiations and stick to it.

I don't envy someone trying to buy in the Scottish system - it's too closed off and when you consider how emotionally attached people can become, it seems to inspire 'panic bids' (I'm guessing it is probably quite nice to be a seller in Scotland because of this).

We are first time buyers and have just put in an offer of £70k on a house marketed at £90k. This might sound like a kick in the teeth to the vendors but it is a reasonable offer - Similar houses on the street sell for £85-95k in a basic turnkey state. This house needs cosmetically gutting with a new kitchen and bathroom and a badly designed stud wall removed. The house hasn't been decorated for 40-60 years (sadly a nanna died there) and has been on the market 6 months. Having spoken to the EA the only offers the vendors have had have been from developers c.£50k and all FTB have been scared off by the work. We knew the vendors wanted to achieve £85 but to us the house is worth £75 tops.

The offer has been rejected but we have left it on the table while we look at other properties. Depending on the state of play in a few weeks we will most likely make a best and final offer at £75 and put an expirary date on the offer - if it isn't accepted we will walk away and wish them luck.

So - In my EXTREMELY HUMBLE opinion:
Work out what it's worth to you (basic supply and demand) and stick to your guns on your top price. And there are usually other houses out there so try not to pin all of your hopes on the one house (that's where my flexibility lies!!).

To be honest I don't worry about offending someone - it's a business transaction, not a comment on how pretty their newborn is!

Good luck to the OP!!

moneyistooshorttomention

mrsbmartin wrote: »

Having spoken to the EA the only offers the vendors have had have been from developers c.£50k and all FTB have been scared off by the work. We knew the vendors wanted to achieve £85 but to us the house is worth £75 tops.

By now I'm getting convinced there must be a How to Be a Bad Estate Agent School - and this looks like another candidate for it. Fancy an estate agent letting on to a would-be buyer that there has been such a low alternative offer for a house as that:eek:

I would only expect mine to say about other offers around my asking price - as in "Money has the house on at x and has already had two offers in the near vicinity of this" otherwise it would be that Order of the Boot again for them.

I fully expect that BTL'ers will come looking at my property, as well as home-owners, and have already gathered that investors make a habit of offering a good bit less than a house is worth.

Thanks for the warning then. I shall make a point of telling my estate agent - just in case - that they are not to mention whatever-stupid-figure-offer any of the investors offer to any of the other viewers.

thequant

moneyistooshorttomention wrote: »

By now I'm getting convinced there must be a How to Be a Bad Estate Agent School - and this looks like another candidate for it. Fancy an estate agent letting on to a would-be buyer that there has been such a low alternative offer for a house as that:eek:

I would only expect mine to say about other offers around my asking price - as in "Money has the house on at x and has already had two offers in the near vicinity of this" otherwise it would be that Order of the Boot again for them.

I fully expect that BTL'ers will come looking at my property, as well as home-owners, and have already gathered that investors make a habit of offering a good bit less than a house is worth.

Thanks for the warning then. I shall make a point of telling my estate agent - just in case - that they are not to mention whatever-stupid-figure-offer any of the investors offer to any of the other viewers.

A property I enquired about, the EA said, "It's been on for 7 months and there has been absolutely no interest at all"

lessonlearned

Poor old EA's - damned if they do and damned if they don't.:rotfl:

If they are honest and tell the truth about lack of interest in a property they are slated for giving away too much information.

If they lie or "embroider" a little and suggest that there is more interest than there really is they are called lying, cheating, sleazebags.

If they maintain a diplomatic silence they are criticised for saying nothing and not being helpful.

If they sell a house within a matter of days they are ripping you off because "it's money for old rope, any idiot can sell a house".

If they take a year to sell a filthy, overpriced hovel they are useless.

Need I go on :rotfl::rotfl:

Come on people, cut your EA's a bit of slack.

You can't have it all ways.

EA's are just a go-between, always piggy in the middle.

You know the old saying - "Don't shoot the messenger". :rotfl:

Just edited to add.

By the way, just as a matter of interest, I had an interesting call yesterday from the EA who sold my house.

They've offered me a job. I said I would think it over.

As you know I'm retired now, obviously they think I still have what it takes.
Very flattering. Obviously talent will out.....

Tancred

Interestingly, I've just found a house similar to mine, in a similar area, that sold in November for £271k, which proves that not all houses in that price range sell only for £250k: http://www.mouseprice.com/property-information/ref-19352307?newsletter=LRResults

I live in hope.

myhouse_2

ukcarper wrote: »

The OP is in scotland and the system is different normally offers over so it's unlikely they will accept a offer of 10% less.

Just to clarify for people not familiar with the system in Scotland, offers over was a common sales tactic - often the price was set quite low to entice buyers and get a bidding war going. This worked well in the boom and did indeed as another poster mentioned, cause people to panic and throw stupid offers in. There are still vendors using this tactic, but they are few and far between now. Fixed price is the order of the day. Typically even if a house comes on at offers over, it will soon change to fixed price, often at a lower figure. There are few buyers out there so trying to start a bidding war is not a good strategy anymore - people are typically grateful just to get an offer.
I bought my house recently in Edinburgh for 20% below original asking price and 10% below the offers over price. It had been on the market a while with no interest and certainly the original price was nonsense.
The OP put in a first offer of 3% below asking - in most cases, this is way too high to start bidding. Your typically seller will perhaps reject it to see if you offer more, but will likely come back begging soon after that.