Vendor Paying Buyers Solicitor Fee's/Other Incentives

darrenmcneill

Just wondering if anyone can advise?

1/. Are vendors of properties up for sale permitted to pay the buyers solicitors fee's? I understand that using the same solicitor is not permitted, but this would be 2 different firms of solicitors based in 2 different towns.

2/. Are there any incentives that a vendor is allowed to offer a potential buyer? From my research a deposit contribution is not allowed by most lenders on existing properties (although i'm sure there are some that will), but could a vendor pay for:

- The buyers mortgage broker fee?
- White goods upon completion up to a certain amount?
- Home furnishings upon completion up to a certain amount?

I understand that most of the above is perfectly fine when it comes to a new build property, but not as sure when it comes to buying a property off the open market.

Advice appreciated.

sparky130a

darrenmcneill wrote: »

Just wondering if anyone can advise?

1/. Are vendors of properties up for sale permitted to pay the buyers solicitors fee's? I understand that using the same solicitor is not permitted, but this would be 2 different firms of solicitors based in 2 different towns.
I guess so...
2/. Are there any legal incentives that a vendor is allowed to offer a potential buyer? From my research a deposit contribution is not allowed by most lenders on existing properties (although i'm sure there are some that will), but could a vendor pay for:

- The buyers mortgage broker fee? Don't see why not
- White goods upon completion up to a certain amount? See above
- Home furnishings upon completion up to a certain amount? See above

I understand that most of the above is perfectly fine when it comes to a new build property, but not as sure when it comes to buying a property off the open market.

Advice appreciated.

What a strange scenario. You'd have to be a pretty desperate vendor.

Hell, you just as well give them the property!

darrenmcneill

sparky130a wrote: »

What a strange scenario. You'd have to be a pretty desperate vendor.

Hell, you just as well give them the property!

Not sure why this is seen as desperation, nor giving the property away. The above examples come to a small financial amount, but could be the difference in enticing a buyer to property A, rather than property B.

sparky130a

darrenmcneill wrote: »

Not sure why this is seen as desperation, nor giving the property away. The above examples come to a small financial amount, but could be the difference in enticing a buyer to property A, rather than property B.

Ok, but surely it's just easier to reflect that in the asking price ?

darrenmcneill

sparky130a wrote: »

Ok, but surely it's just easier to reflect that in the asking price ?

The difference is the physical cost to purchase the property at that moment in time. Paying for the buyers immediate cash outlay helps them more than reducing the property price, as the saving in their pocket would be a monthly one over the time of their mortgage.

Buying a house is a very expensive process (including deposits etc).

This is why I am curious as to what a vendor can legally offer a seller to aid them in their purchase. If anyone could give definitive answers that would be greatly appreciated.

nimbo

I've seen a house advertiswdthrough right move with 5k back on completion.

Don't know what the ea was didn't really pay that much attention.

The house was a mess and overpriced for the area. It did make me wonder if there would have been roo. For negotiation in the price. I tend to see the listed price as a starting point - and would kind of expect there to be some room for negotiation.

[Deleted User]

Hi,

aye, add £5k to price of house and then offer the money off vouchers.

Suppose it's the thought of getting something for nothing.

darrenmcneill

[Deleted User] wrote:

Hi,

aye, add £5k to price of house and then offer the money off vouchers.

Suppose it's the thought of getting something for nothing.

Its whether this is allowed legally or not. I know the deposit contribution in general is not, but ts whether the solicitor/mortgage broker/white goods are.

sparky130a

darrenmcneill wrote: »

The difference is the physical cost to purchase the property at that moment in time. Paying for the buyers immediate cash outlay helps them more than reducing the property price, as the saving in their pocket would be a monthly one over the time of their mortgage.

Buying a house is a very expensive process (including deposits etc).

This is why I am curious as to what a vendor can legally offer a seller to aid them in their purchase. If anyone could give definitive answers that would be greatly appreciated.

Indeed it is expensive. Even my modest flat cost a lot in fees etc.

Having said that if you're that near the edge purchasing property is probably not a good idea.

The classic, boiler goes. That's £2k for a start.

AFAIA you can legally offer whatever you want. But bear in mind HMRC will take a dim view on anything that tries to manipulate SDLT payable.

It all seems rather convoluted to me.

davidmcn

darrenmcneill wrote: »

Its whether this is allowed legally or not. I know the deposit contribution in general is not, but ts whether the solicitor/mortgage broker/white goods are.

Anything is "legally" allowed, but the buyers need to report incentives to their mortgage lender - who will probably just deduct them from the valuation, meaning the buyer might not have any more cash to play with.

By white goods and furniture, do you mean leaving the existing stuff behind? That's quite normal.

But the rest of it sounds more hassle than it's worth, which is why you don't see many other sellers using this cunning plan.

darrenmcneill

davidmcn wrote: »

Anything is "legally" allowed, but the buyers need to report incentives to their mortgage lender - who will probably just deduct them from the valuation, meaning the buyer might not have any more cash to play with.

By white goods and furniture, do you mean leaving the existing stuff behind? That's quite normal.

But the rest of it sounds more hassle than it's worth, which is why you don't see many other sellers using this cunning plan.

But yet Banks have offered similar products if their mortagage is taken out? (Below was last year, but there are a number of banks who have offered similar):

https://www.theguardian.com/money/2016/jun/25/mortgage-bank-accounts-energy-companies-insurance-incentives