New build incentives

alfiemama

Hi everyone, I am a newbie on here but really need some advice.
We have seen a new build house from Barrat that we really want, we had a buyer for our house but unfortuantely they didnt have enough funds, the new build house had to be completed b4 xmas so in order for us to accept a lower price for our house barrat said that they would pay our deposit and stamp duty, we thought great and told everyone to go ahead on this only to be told by our mortgage company that as the incentive is over 5% they wont touch it, also we are tied in with them so cant look elsewhere (it was a portable mortgage) so now we have had to let our buyers go and lose out on our dream home, just seems so unfair and thought I would check in case there is a way around this.
any help and advice appreciated

Doozergirl

Ask them to give you whatever the amount over the 5% is, as a true discount on the price of the property.

It doesn't cost them any more, they aren't really putting money in

alfiemama

Wish I could
But our mortgage says that we need to have 10% down on the house which as we are selling cheaper (we are basically making zilch) the money Barrat are giving us would have to go towards this (they are giving us 14%, think as slow market) apparently mortgatge companies now twitchy about incentives and you have to declare them,

Doozergirl

Can you post the maths for me please?

I mean mortgage amount, sale price, purchase price and incentives? It might be that there is nothing to be done, but let's see if anyone can make it work for you.

Would they take your house in part exchange? Doesn't help your buyers, admittedly!

alfiemama

Hi Doozergirl, thanks for helping us appreciate it

Ok we owe 176 on our house, we have accepted an offer of 177 from buyers as Barrat house is 180,900 but they are giving us 14%, which is 10% our deposit on the house, 1% stamp and 3% as a cashback to us, so that we could accept a lower offer.

Hope this makes sense Im full of a cold at mo so head banging

alfiemama

forgot to say we are only tied in mortgage until March and if we change they will charge us 9k (seems high that)

Doozergirl

Yeah, that's tight. So you should have been coming out of this with a smaller mortgage?

Will Barrat wait until March? I know developers like things completed on time, I guess they want this as a year end? Maybe they could squeeze you in if sales really aren't going that well on the development?

Once you get to March, you should be able to find a mortgage company that will allow you the 5% deposit paid. Then you can try and get the rest from Barratt as a discount perhaps?

alfiemama

Hi Doozergirl

Yeah thats what we thought, just thought Id make sure nothing else could be done really before we let our buyer go, I dont think they would wait until march and also we are selling rediculously cheap because of the deadline and the market, it is a 4 bed detatched valued at 230, how mental are we, but we just want out and cant really afford it at the mo.
thanks anyway for your help I do really appreciate it, lets hope the new house market is as slow as everything else.:rotfl:

lynzpower

The difficulty is here that "they are paying the deposit" ie, you are going in without any deposit. these days, these "incentives" (and i use the term loosley, i really ABHOR these) are literally a paper moon.

I wonder whether they could give you the deposit in cash bewtween exchange & completion, then you "have" the cash deposit.

Now, Im fairly certain they wont, as its not physical cash, its just a reduction off their listed price.

Doozergirl

If I was a buyer and your house was worth that much, I'd wait past March!You should easily be able to find a buyer at £200k even which solves the problem anyway? Surely the Barratt house is smaller unless it's in a different part of the country?

You'd be surprised anyway - most people are accommodating if they understand the reasoning. If the choice is bargain house in March or no house at all, what would you choose?

Otherwise, if it's really worth that much, what's your motivation for moving? Is the sale forced? Why not wait for a regular buyer at a regular price and move when you are out of your tie in? Surely the motivation isn't just a brand new house?

Doozergirl

lynzpower wrote: »

I wonder whether they could give you the deposit in cash bewtween exchange & completion, then you "have" the cash deposit.

Now, Im fairly certain they wont, as its not physical cash, its just a reduction off their listed price.

That wouldn't be the problem in doing it Lynz, giving the money away to get it back from the mortgage company wouldn't be that bad, but at which point exactly do you entrust 10% of the perceived value of your house in cash to a buyer?