Is your house worth 260-310? Would you pay 2% stamp?

martinsurrey

poet123 wrote: »

Rebuild cost is rarely higher than actual value because the land is already owned.

Yeah, that’s the point, it’s only happens in areas (how to put it politely) with significant problems.

poet123

martinsurrey wrote: »

Yeah, that’s the point, it’s only happens in areas (how to put it politely) with significant problems.

Which is why it isn't the case where we have bought;)

He just managed to get a bargain...a couple of the houses in the row/opposite are going for around the purchase price plus the 35k.

silk_2

kmmr wrote: »

In answer to your valuation question.

Yes - the bank values the property excluding stamp duty, and excluding your legal fees, and your moving costs... any cost that is not related the value of the security they are receiving for the mortgage.

From the banks point of view, they are looking at the value of their security. If I, as a bank, had to sell this property - what is it worth?? It is NOT worth £300k, even today, otherwise someone would have paid it. If they had to sell it, in theory they would only get the same as the vendor - ie £291k. (keeping value the same for simplicity)

So, the banks buffer for loss reduces from 10%, to 6% or so.

Sorry - not being argumentative just genuinely still don't understand. Let's just look at a normal situation.

For simplicity, the accurately priced house is worth 300k, and someone (me) will pay the 300k.

I also need to pay stamp, and I will.

By your logic the mortgage won't go through, because they will value the house excluding stamp (this is news to me), which is 291k.

So I would have to offer every single seller an amount that has stamp deducted to even get a mortgage, again by your and martin's logic. I have to offer them less to secure a mortgage by the nature of what you are saying.. which would be fine, except all houses here do sell for close to sell price - so it's all completely contradictory.

Do you see why this is confusing me?

ghosti

so as i read it it is the buyer putting the stamp duty fee onto the mortgage, and once the seller receives the money via the mortgage company at completion, to reimburse the buyer in order to pay the SD fee.

whats to say the seller will actually give you money at completion?

kmmr

I don't really see why it is confusing you to be honest.

All valuations assume you will cover your own fees and costs. As they are variable and mostly personal, they do not form part of the value. Your offer includes an implied assumption that you will pay your own fees.

The money you need upfront is 10% of the purchase price PLUS fees.

martinsurrey

silk wrote: »

Sorry - not being argumentative just genuinely still don't understand. Let's just look at a normal situation.

For simplicity, the accurately priced house is worth 300k, and someone (me) will pay the 300k.

I also need to pay stamp, and I will.

By your logic the mortgage won't go through, because they will value the house excluding stamp (this is news to me), which is 291k.

So I would have to offer every single seller an amount that has stamp deducted to even get a mortgage, again by your and martin's logic. I have to offer them less to secure a mortgage by the nature of what you are saying.. which would be fine, except all houses here do sell for close to sell price - so it's all completely contradictory.

Do you see why this is confusing me?

No no no, the bank look at net selling price... which is the net amount of cash the seller ends up with, if you pay stamp duty, it is the amount you offer for the house.

If they pay the stamp duty its the offer price less the stamp duty they are paying on your behalf.

poet123

silk wrote: »

Sorry - not being argumentative just genuinely still don't understand. Let's just look at a normal situation.

For simplicity, the accurately priced house is worth 300k, and someone (me) will pay the 300k.

I also need to pay stamp, and I will.

By your logic the mortgage won't go through, because they will value the house excluding stamp (this is news to me), which is 291k.

So I would have to offer every single seller an amount that has stamp deducted to even get a mortgage, again by your and martin's logic. I have to offer them less to secure a mortgage by the nature of what you are saying.. which would be fine, except all houses here do sell for close to sell price - so it's all completely contradictory.

Do you see why this is confusing me?

But why if the house was valued at 300k would a seller take 9k less? It is different to an asking price, it is a valuation.

silk_2

martinsurrey wrote: »

you are giving him £300k, but then he needs to pay £9k to the goverment for your stamp duty, leaving him only £291k !!!!!!!

if the house was worth £300k he wouldnt need to offer to pay £9k of your fees.

He doesn't need to, he'd eventually get 300k but might want a quick sale so he might consider it.

This exact house in question is probably worth closer to 320, as that's what the same builds on the street have sold for lately.. but clearly the owner wants rid of it hence it's on for cheaper.

kmmr

silk wrote: »

For simplicity, the accurately priced house is worth 300k, and someone (me) will pay the 300k.

I also need to pay stamp, and I will.

By your logic the mortgage won't go through, because they will value the house excluding stamp (this is news to me), which is 291k.

Let me try another way - the bank will value the house at the amount that a seller can get for it. In this case the seller is getting £291k. He is not getting £300k.

In a normal situation he gets £300k, as you pay the fees. So the bank would value it at £300k.

silk_2

martinsurrey wrote: »

No no no, the bank look at net selling price... which is the net amount of cash the seller ends up with, if you pay stamp duty, it is the amount you offer for the house.

If they pay the stamp duty its the offer price less the stamp duty they are paying on your behalf.

I didn't know they would have that kind of information, I thought they only saw what you need to borrow and what the house is worth.. not what other private deals you and the seller make to close the deal.

In that case you are saying it would be impossible?

A shame, because it would help sellers sell and buyers buy.

kmmr wrote: »

Let me try another way - the bank will value the house at the amount that a seller can get for it. In this case the seller is getting £291k. He is not getting £300k.

In a normal situation he gets £300k, as you pay the fees. So the bank would value it at £300k.

Why would the bank know or care that once he gets his 300k he then pays some of my stamp? Isn't it his money once it's in his bank?

Sorry if I am frustrating you..