House Purchase Incentive Towards Fees?

saluk

Hi guys,
Just a quick question 
I am currently in the process (albeit on hold currently because of Covid) of purchasing a property, next stage is contracts to be sent out and im in no chain as the buyers have pulled out of there purchase as are now going to wait to see what happens with the market, but still happy to move out on completion

Due to potential worries about the economy and potential incoming recession and the effect that will have on the property market prices as i feel i am buying at the literal top i have also been debating pulling out as well 

If i asked the seller for a financial incentive to complete the deal would this be legal?

Not to effect the property purchase price or mortgage details or to go towards the deposit, but a financial incentive to put towards the legal fees/stamp duty on completion

Many thanks

davidmcn

It's "legal", but would probably have to be disclosed to your lender (assuming you're buying with a mortgage). So for practical purposes you may be simpler just to ask for a discount on the price.

wazza07

Personally if it was me I’d tell you to jog on! If you’re having worries then pull out and wait. It’s going to take a while to see what impact COVID-19 is going to have on the housing market. 

saluk

Ah ok thanks i thought it might bypass the lender, from what i have looked up today if the seller had agreed a price and then said we would give you cashback, then that would then be deductible off of the homes value for the mortgage, valuation, LTV etc but as the legal fees are a separate entity thought it might not have to be disclosed?

saluk

wazza07 said:

Personally if it was me I’d tell you to jog on! If you’re having worries then pull out and wait. It’s going to take a while to see what impact COVID-19 is going to have on the housing market. 

really? i dont think its being unreasonable, the sellers are getting a great price for the property, probably more than they would get if the deal collapsed and had to sell again in the near future, to put towards there next home, which they likely will get cheaper as well, not to mention loss of legal fees, i like the property as well, thought by doing this it would be easier than renegotiating the asking price and all of the paperwork which is severely delayed currently 

davidmcn

saluk said:

Ah ok thanks i thought it might bypass the lender, from what i have looked up today if the seller had agreed a price and then said we would give you cashback, then that would then be deductible off of the homes value for the mortgage, valuation, LTV etc but as the legal fees are a separate entity thought it might not have to be disclosed?

It's cashback. It's not "separate" as it will be in your contract. Effectively all you're doing is reducing the net amount you're paying. Lenders aren't daft.

saluk

Ok i will have to speak to the solicitors perhaps a price negotiation or pulling out is the way forward