William H Brown - £1000 Buyer's Incentive conundrum

powerbarge

Hi All,

I'd be very grateful if anyone could share some words of wisdom on this query,

I'm currently offering on a property through William H Brown estate agents, and they are advertising the property with "£1000 buyer's incentive", which of course has the catch of having to use their mortgage adviser and conveyancing services.

I was of course very wary of this as initially I couldn't see how this could be a good deal, I made the assumption that there would be fees, overpricing and other charges that would wipe out the savings. Whilst the charges are over what I would pay if I went out and sorted it myself, the discount seems to still work out with it being cheaper overall.

Just out of curiosity however I had a meeting with them and requested the details, and it doesn't seem as bad as I first feared, at least form the buyer's perspective.

The cash back appears to come off the seller's agreed price, so for example if I offer £100,000 on a property, and the seller accepts, then the seller agrees to take £99,000 and that £1000 saving is effectively the incentive. I can't understand why any seller would agree to this, but from the buyer's perspective it doesn't seem too horrible.

Anyway, down to the numbers, here are my costs with and without the incentive:

Without incentive:
Conveyancing charge = ~£750 based on several quotes, covered most of the charges though
Mortgage arrangement fee = £995
= £1745

With incentive using WHB's services:
Conveyancing charge = £658.80
Bank transfer fee = £35
Mortgage advice fee = £399
Mortgage arrangement fee = £995
"Legal fees payable to your conveyancer for acting on behalf of the lender" = £120
"valuation and administration fee" = £149
= £2356.80
Discount on purchase price = -£1000
= £1356.80

So even with all these extra charges I still seem better off.

The mortgage the adviser was offering was actually the same rate and charges as I had been quoted by the bank, so I don't have any real concern there.

Anyone have any thoughts?

Alias_Omega

Your paying for your own £1000..

Why get a mortgage for £100,000, when you only need one for £99,000.

Your paying the extra £1000.00, as your paying £1000.00 more than you need.

dgtazzman

The mortgage advice fee of £399 seems rather steep. The tied in advisor we're currently going through with Barratt's charges £0 to £99 for their services as long as you use a lender from their usual panel so they get a commission.

The rest of it seems reasonable, certainly in line with what our solicitor quoted us. They weren't the cheapest price wise, but by far not the most expensive and the builders requested we use them in order to get our incentives as they'd dealt with them before on the development we're buying on and found them to be very 'on the ball'.

powerbarge

Alias_Omega wrote: »

Your paying for your own £1000..

Why get a mortgage for £100,000, when you only need one for £99,000.

Your paying the extra £1000.00, as your paying £1000.00 more than you need.

I'm not quite sure I follow? The mortgage would be on £99,000 if I took the incentive. Anyway it wouldn't be because i'm putting down a fairly big deposit,

chanz4

dgtazzman wrote: »

The mortgage advice fee of £399 seems rather steep. The tied in advisor we're currently going through with Barratt's charges £0 to £99 for their services as long as you use a lender from their usual panel so they get a commission.

The rest of it seems reasonable, certainly in line with what our solicitor quoted us. They weren't the cheapest price wise, but by far not the most expensive and the builders requested we use them in order to get our incentives as they'd dealt with them before on the development we're buying on and found them to be very 'on the ball'.

be warned theirs are crap

Jamie85

There is no reason they shouldn't be offering you the same rate as you'd get by going direct to the bank, but you'd be better off seeking the advise of an independent all of market broker for comparison if you haven't done so already; WHB have a limited panel of lenders so will be excluding a number of products which may offer you a better rate.

Personally, I wouldn't touch their incentive offer with a barge pole without written consent that I had qualified for the cashback before paying a penny for any of their services.

https://www.google.co.uk/search?q=william+h+brown+%C2%A31000+incentive+site:forums.moneysavingexpert.com&safe=off

powerbarge

Thanks for the replies everyone. I have read some of the bad press about this offer, but people only tend to post on the internet when there's a problem, so I'm still trying to make my own mind up about it.

Using the phrase "cash back" was a bad move on this post! It isn't a cash back, its basically a £1000 reduction in the price, after your final offer is accepted. I think they've possibly changed the structure of the offer from some of those posts as it looks like it used to be offered as "cash back" rather than just a discount. The mortgage quote I was given was based on a purchase price with my offer with £1000 discount applied. However, this is of course my understanding of it, and I will get more details in writing, and im still waiting to hear back about my offer, although it was looking good, the vendor just had to check with his other half.

I have spoken with an IFA and the rates again were the same as what was offered by WHB.

The problem with this offer that I see is that the seller may just only take offers of £1000 more, under the assumption that (based on how enthusiastic the agent probably was about it) that all the buyers would be taking up this offer. So regardless of what decision I make, I think I will effectively be overpaying by £1000 either way. I guess I could avoid this by making contact with the seller directly and telling him that I definitely wouldnt be using the agent's solicitor etc, and that he wouldn't have to take money off the offer, but i'm not convinced they would accept, as WHB have obviously sold the seller on the perceived benefits that come with using the in-house services, imaginary though they might turn out to be.

bitsandpieces

Can you not just make an offer along the lines of:

'I am offering £99k, on the basis of declining the buyer's incentive'. Seller doesn't have to pay out the £1k (assuming they would otherwise) so should be OK to reduce the price accordingly!

rosyw

I bought from someone who used their conveyancing service, they were truly appalling! :eek: they "lost" documents, claimed they'd not received paperwork from the vendor when he had proof they had as he'd sent everything recorded delivery, etc., etc. We reckoned they added a month onto the buying/selling process. The £1000 you may save really isn't worth it, if I hadn't had my vendor's phone number he'd never have known the situation as he could never get to speak to the right person on the phone, in the end he gave them 24 hours to sort it out or he would be collecting his file and going elsewhere, and he meant it!

powerbarge

bitsandpieces wrote: »

Can you not just make an offer along the lines of:

'I am offering £99k, on the basis of declining the buyer's incentive'. Seller doesn't have to pay out the £1k (assuming they would otherwise) so should be OK to reduce the price accordingly!

I really wish i'd thought of this before making an offer!

Alias_Omega

powerbarge wrote: »

I'm not quite sure I follow? The mortgage would be on £99,000 if I took the incentive. Anyway it wouldn't be because i'm putting down a fairly big deposit,

It reads like..

You give the £100,000 mortgage/agreed price. They give you £1000 back in cash.

However...you could of just got a £99,000 mortgage with a fixed deal for 5 years. Your paying extra interest on the extra £1000, unless you overpay the cashback within the first few months..

But...you wont pay the £1000 off the mortgage through overpayments. It will be swallowed up by a new TV/Sofa etc..

Clearer?