How much is being a FTB worth?

chrisw79

We've just been to view a house that is on for £280k and want to put an offer in.

The vendors are an old couple who have literally just been to Spain to collect the keys for their new villa which they are retiring to. They are obviously keen to move quickly and the estate agent told us they have had no other interest, apart frm one couple who have a house to sell.

We can move straight away and wonder how much our position as FTBs is worth in terms of %age of asking price. We're tempted to offer £245k - which is 12.5% under the asking price. With the market as it is and their desperation to get away, do you think this offer is reasonable?

We're keen to stay under the £250k mark due to the extra 2% stamp duty we have to pay - is there anyway to offer over £250k but only paying 1% stamp duty?

meanmachine_2

Rather than try to fiddle the system, I too would probably offer £245, then go up to £247.5, and then £250K at a push.

Propertes on sale for £280K are unlikely - in today's climate - to break through the stamp duty threshold anyway.

The advice is always to have at least two properties on your shortlist that you like, so that you're never tempted to get caught up in any bidding race over one house in particular.

Have to say £280K is a huge amount for a FTBer to pay, but if you're earning it then good luck to you!

theGrinch

>>How much is being a FTB worth?

being a FTB is not the key, the key is having the finance and being chain free. generally it depends who the competition is and their position

>>anyway to offer over £250k but only paying 1% stamp duty?

the govt have really cracked down on border line sales.

options include:

i) pay their estate agent fees
ii) pay all legal fees
iii) pay removal costs of vendor
iv) determine fair price for F&F

no harm in offering £245k its cheeky, but surely not an offensive offer. the agent shoudl really have advised the vendor of the stamp duty skew effect.

maybe ask the agent what the minimum the vendor will accept. the estate agent should try to feel out a price where both parties meet.

chrisw79

How much are estate agents fees likely to be (in case we offered to pay them for the vendor?

theGrinch

simple way to find out...ask them? likely to be 1%-2.5% depending on whether sole, joint or mulitple plus VAT.

GDB2222

[QUOTE=theGrinch

>>any way to offer over £250k but only paying 1% stamp duty?

the govt have really cracked down on border line sales.

options include:

i) pay their estate agent fees
ii) pay all legal fees
iii) pay removal costs of vendor
iv) determine fair price for F&F

[/QUOTE]

Surely items i to iii are consideration for the house and thus counted within the purchase price for Stamp Duty purposes???? Stamp Duty rules were revamped with the introduction of SDLT. Tricks which worked under the old rules may not work under the new rules. Be careful!

theGrinch

the buyer should seek professional advice and could ask their solicitor about these suggestions. I know F&F values have been tightened not sure on the others, which seem to me to have come to prominence since F&Fs were tightened

meanmachine_2

Indeed, the vendor will have added these additional costs to the asking price in the first place. Why should the seller have to pay them twice over?

£250K is a perfectly reasonable offer on a property that is on for £280K. Unless the vendor has already dropped the price from £300K, say, then you have a reasonable chance of success.

Could the other posters on here explain how and why the govt has cracked down on these types of stamp threshold sales? Do they investigate them in some way? apols for my ignorance.

theGrinch

whether it be the Inland Revenue or HM Customs they carry out investigations on a range of tax issues (PAYE, VAT, Stamp Duty, Corporation etc). However, they do not have the resources to examine every transaction so they will focus resources on large transactions and on transactions where there is a higher than average chance of tax evasion. this is how their staff get their badges.

one such area are sales at the stamp duty thresholds...£120k, £150k, £250k and £500k and anything close but under £250k will be a prime target.

you were getting house sales at £250k and fixtures and fittings sold for unreasonable amounts. instead of say £2k for F&F it was £10k or £15k and so this loophole was not shut but more closely examined.

look, stamp duty is a stealth tax on something as basic as housing and should be abolished with a corresponding cut in govt spending. stealth taxes make for nothing more than indecisive govt and public waste.

unfortunate as it is, its current law and can not be evaded

chrisw79

Would an offer of £250k + 5k for fixtures and fittings be acceptable? I would this keep me in the 1% bracket?

Also, can you include F&F in a mortgage?

theGrinch

you can get mortgages >100% although, I personally thing they are a dicey thing. you cant include F&F per se.

Plan A
From what you described, I think you should start at £245k and see. The worse they can do is say no. It really comes down to how desperate they are to conclude a deal. Some people will sell for 85% or less of asking just because they are relocating. If they do say no, then raise it to £250k.

Plan B
again if they hold out consider adding a fair and reasonable amount for F&F. £5k is not reasonable if they are just leaving a kettle. but if it includes all flooring, curtains, some white goods, lawn mower, some furniture then yes it could be deemed fair but only if its reasonable.

Plan C
you could consider other things like paying legal costs, removal costs etc after all this is what developers and housebuilders often do. you may need to get advice on whether you can pay estate agent fees. all this could add £7-10k.

then again, they could well accept £245k and its all academic.