Reducing to Stamp Duty threshold

MiM

Just switched estate agent and like previous they're saying price of 132k - which is less than we thought we'd get - is too close yo the SD threshold and that buyers will expect it for 125k.

He says options are reduce to 129.5k and expect 125k or reduce to 125k no offers - he believes that will get house sold in a few weeks.

Previous advice was to always ask more than your lowest acceptable price as every buyer will want to feel they've got a deal.

Any thoughts on what we should do? We're hoping we'll make up our losses on next house, as market here in the North East seems very stagnant.

MiM

Sorry to do this but...bump!

Lokolo

My only thought is that if people are looking and can only afford up to £125k because of SD, they may have their alerts and such set to "View properties max of £125k", of which yours would be missed if it were higher.

But this could only be a minority of house hunters.

InMyDreams

MiM wrote: »

Previous advice was to always ask more than your lowest acceptable price as every buyer will want to feel they've got a deal.

I wonder whether this doesn't quite hold around the stamp duty thresholds though, because everyone knows it's hard to realize a price just over a threshold.

If you think your house is *really* worth over £132K, based on local, recent sold prices of similar properties, then if you price it at £125K, it will be so much better than the properties with *ambitious* £125K price tags (that might only achieve £115K or less) that potential buyers will still feel that they have a bargain (because they will understand why it is priced as such) and will be snapping your hand off at £125K.

I would only do this if you are actually happy to just accept £125K though, because once you've reduced the price you can't really put it back up if you change your mind.

MiM

At the moment I'm thinking to put it at £127,500, then we have some wriggle room but still have the leeway to reduce to the bottom line in a few weeks. Thanks for the help, much appreciated.

dominoman

Put it at 125k and you'll get more interest from people that search with a 125k limit. Don't worry about offers being below. Just state you won't drop a penny after the offer comes in. People often make an offer and then get emotionally attached so will be happy to up it of they need to to get the house.

lessonlearned

£7K difference is a sizeable hit.

Have you considered offering £1K legal incentives.

MiM

I had looked at previous threads here that seemed to suggest such incentives were a red herring or in the case of assistance with deposit, illegal. But if there's a way that could make sense, please advise. Thanks.

Gordon_Hose

We recently sold our 2 bed, 4 year old, flat that we bought for £127k in 2009. The EA claimed it was worth between £130-135k but it was unlikely to fetch that due to the Stamp Duty threshold. In the end we put it on for £125k no offers and got exactly that.

puregeordie

Why worry about stamp duty? if its worth £127 or £130 and somebodyy really wants it they will pay it.

Its only £1300 out of £130000. Also some mortgage companies will pay this for you for first timers.

The stamp duty threshold in my opinion is only really apparent when your buying a much more expensive house and then you take a big hit.

I appreciate that for example first timersneed every penny when buying a house but if its a house they really want then just over a grand isn't a big dealas they should also have this covered anyways when looking for a house around this range.

Put it up for whatever you want and if its just over the threshold then its a good bargaining tool for other things as well, eg lease/furnishings etc..

lessonlearned

MiM wrote: »

I had looked at previous threads here that seemed to suggest such incentives were a red herring or in the case of assistance with deposit, illegal. But if there's a way that could make sense, please advise. Thanks.

It's perfectly legal.

Most developers offer some form of incentive, have done for yonks. Lenders accept and understand this.

I've seen the £1K legal incentive scheme used a lot lately in the resale market in our area.

I have friends marketing a property at £285K, they are offering a deal with stamp duty.

Discuss this with your EA.