House selling tactics - offering a 5% deposit paid?

daverave7

Hi there,

Myself and my partner are trying to sell our house as we have another house bought off plan and move in next Feb/March. It has been on the market for 3 months with some interest but no offers. It was originally valued between £100 K and £110 K. We decided to price it with the lowest price of £100K, hoping for a quick sale.

Our EA has suggested two tactics to in an attempt to shift the property:-

1) Drop the house price (obviously!)

2) Offer a 5 % deposit paid. I assume this would mean the buyer paying £95 K for a £100 K house, and would benefit them when finding a mortgage... Can anyone clarify that I am interpreting this correctly?!

What do you believe to be the best tactic for a quick sale? I quite like the sound of tactic 2 as we are quite willing to accept 95K, and surely the deposit paid will attract first time buyers - which would be ideal for a quick sale (as no chain). But are there any legal complications to this tactic of 5% deposit paid or anything I am missing out?!

Any advice will be much appreciated! Thanks!

Mrs_Thrify

I think whatever deposit insencive you offer they will still make a lower offer to try there luck :rolleyes:

Good luck with whatever you decide...

silvercar

But are there any legal complications to this tactic of 5% deposit paid or anything I am missing out?!

Your buyers would need to declare the gifted deposit to their mortgage lender and solicitor. Some lenders will be less keen than others to accept it as a true deposit. For a buyer with no deposit and can find a lender who will accept it, it will mean they can get a better choice of mortgage offers which will make your house very attractive.

Bottom line is that you will only get 95k for the house.

Running_Horse

Either a buyer will love the house or won't.

Such incentives would only make me think the seller was desparate.

Debt_Free_Chick

Isn't (2) easier to achieve by simply dropping the price to £95k?

poppy10_2

Debt_Free_Chick wrote: »

Isn't (2) easier to achieve by simply dropping the price to £95k?

No. The buyer may not have saved up anything for a deposit, and 100% mortgages are hard to come by these days, whether it's for £95k or £100k.

By giving the buyers £5000 cash, they can go to the mortgage company and plump down a 5% deposit, which will broaden the number of mortgages available to them.

daverave7

Thanks all!

Option 2 seems to be best for a quick sale with no chain!

SquatNow

If you really want a quick sale then drop the price by 5k a fortnight until someone buys it.

If someone is struggling to find funds and needs you to gift the deposit then there is a high chance of the sale falling through again later, so this is, in fact, counterproductive as it will attract the wrong sort of buyes.

A house, like anything else is only worth what someone is prepared to pay for it. You think it's worth £100k. The free market thinks it's worth less. The free market is always right. You need to lower you price until it meets the markets price.

Remember: Until the buyers cash is in your bank account, your house is worth exactly £0

jonewer

Gifted deposit = DFS sofa sale.

GMAC-UK

Have you had an EPC done - if so what was your rating.

Here's an interesting tactic - most (nearly all) properties are falling in the E - D energy efficiency rating. Yet by some simple and cheap insulation upgrades you can get it up to band C - be the most energy efficient on the block !!! - and advertise as so. - Whats more, depending on where you live - most upgrades are free or you get a grant !

Your fuel bills are reduced, comfort factor is up - IMHO, the value of your property has increased.

Soon, this will play a bigger role in choosing our next home (it is with mine!)

BettiePage

GMAC-UK wrote: »

Have you had an EPC done - if so what was your rating.

Here's an interesting tactic - most (nearly all) properties are falling in the E - D energy efficiency rating. Yet by some simple and cheap insulation upgrades you can get it up to band C - be the most energy efficient on the block !!! - and advertise as so. - Whats more, depending on where you live - most upgrades are free or you get a grant !

Your fuel bills are reduced, comfort factor is up - IMHO, the value of your property has increased.

Soon, this will play a bigger role in choosing our next home (it is with mine!)

It won't with mine.