Incentives - your opinion please

Ercesuzan

Thinking of offering an incentive for a quick sale, maybe 10% cashback after completion.
Need some opinions please and maybe some other options.

thanks

Sue

wymondham

what price is your place on for?

SouthCoast

Why not offer a 10% reduction for exchange and completion within 28 days?

Ercesuzan

It's on for £245,000.

Richard_Webster

Why not just reduce your price as it comes to the same thing?

Fiddling around with incentives can slow things down because, if the mortgage lender has not been told about the incentive, there will be a delay while they are told and buyer's solicitor seeks their agreement to proceed.

pinkshoes

Offer a 10% paid deposit rather than cash back at the end, as most people are struggling to put down big enough deposits due to the credit crunch, which is now required by mortgage lenders.

Ercesuzan

Offer a 10% paid deposit rather than cash back at the end

I don't have the spare cash to do this before the house is sold, so wonder how this could work?

Ercesuzan

Thanks Richards, that's the sort of advice I was hoping for. Good to have this from someone with experience.

Guy_Montag

Ercesuzan wrote: »

Offer a 10% paid deposit rather than cash back at the end

I don't have the spare cash to do this before the house is sold, so wonder how this could work?

Just knock 10% off the price

Richard_Webster

To clarify further - some people think that by "paying" the 10% deposit this will help a buyer get a 90% mortgage on the property when they really need 100%.

OP would not actually have to find any money to do this - it would simply be knocked off the amount paid by the buyer - but it is a potential fraud on the buyer's mortgage lender and in the present market I can see lenders being more vigilant about this sort of thing than they have been - hence the need to disclose it fully to the lender.

It may have been the case in the past that there would be a few more potential buyers out there who had no savings and needed this kind of incentive but for various reasons wouldn't qualify for a 100% mortgage on the reduced price. I suspect that because lenders are at last being more sensible about lending, this will be less likely now.

AndrewSmith

pinkshoes wrote: »

Offer a 10% paid deposit rather than cash back at the end, as most people are struggling to put down big enough deposits due to the credit crunch, which is now required by mortgage lenders.

Would not work. Mortgage lenders are not daft, they realise that 'vendor deposit' really means price reduction.

The Buyer would still need to put in the minimum level of deposit required by the lender from their own resources so they do not benefit. All this would show the lender is that the property is over priced by 10% and would be likely to value it accordingly.

Simply reduce the asking price. It does both you and the buyer the most favours.

Lower estate agents selling fee for you, lower stanp duty costs for the buyer. Win Win situation and you get your property sold quickly without the delay of 'sales gimmicks'.