Beresford Adams - Vendors may pay 5% desposit for 1st time buyers

jamtart6

My friend at Beresford Adams (friend is a loose term, though I feel I know him well as he rings me at least twice a week, a VERY tenacious estate agents beware they just love to ring you!) rang me today (as per) and said all the Beresford Adams are trying to get vendors to pay a 5% of what their house is worth IF a FTB buys their house e.g.:

House is £150'000
You put your deposit in eg. 10%... £15'000 (OR NOT IF YOU DON'T HAVE ONE)
Vendor (person selling the house - a new term I learnt today!!ha!) pays 5% e.g. £7500 for you.

You either keep the money for renovation OR put it down as your deposit. It is to help FTB's who have less than 10% deposits to get mortgages, and to help 'vendors' sell their houses.

Whats the catch? Well yes there always is one, you have to have your mortgage with Beresford Adams (Countrywide I believe) BUT if they are offering the best rates (although they arent whole of the market I dont think) then its quite a good deal. DO CHECK IN CASE IT IS NOT THE BEST DEAL!! They do ask for your bank details too which annoyed me a lot, but if it helps someone buy a house then I'm glad I posted the info

PS - no way affiliated with Beresford Adams, unless you count all the phone calls Ive been getting!

m00m00

I've seen quite a few estate agents doing this now

jamtart6

oh right great stuff thanks moomoo

m00m00

hmmm, here's an example

http://www.rightmove.co.uk/viewdetails-17217412.rsp?pa_n=1&tr_t=buy


they are countrywide too linked, so I wonder if they have the same mortgage requirement terms.

jamtart6

aha maybe?

i have seen quite a few round by us that say "vendor will pay the stamp duty" seems like selling a house may become a costly business!

peb

Only problem is; most lenders won't accept it. They will only accept a Vendor deposit in respect of a new build or p/ex incentive and I have found recently that even then I have had Lenders (Co-op for example) refuse to accept to it.

jamtart6

why is that?

jimc_2

This is at least the third thread I have seen discussing these 'Vendor-donated deposits'. What is the legality of these? At the very least the Recipient will be liable to income tax on the 'gift' surely. And that will be at the Buyers highest tax rate. That must dilute the deal a lot, even for a lower-rate taxpayer.

Another thread muses that this really is of most benefit to the agents since it is dependant on 'no haggling' on the declared sale price. They then achieve full selling price and therefore top commission.

The fact that some of the deposit money did not come from the buyers savings must also mislead the mortgage lender about the buyers financial viability as well (although some mortgage lenders appear to be complicit with this.) Apparently the scheme is being pushed to buyers who have NO deposits to get away from the 'shortage of 100% mortgages' problem.

It really feels awfully like a scam but I can't put my finger on it.

Perhaps it is a case of "If it seems to be too good to be true ........"

jamtart6

i did do a search but didn't know that this is what it was called sorry

i think the estate agent win-win whatever! i did think when he called me "why dont they just drop the house by £5k!" ..but obviously they would lose out then!

jimc_2

Sudden thought - did the Beresford Adams Agent introduce himself:

"Hello, I am Prince Mugu of Nigeria. I have recently come across a store room filled with $24 million in $100 bills belonging to my deceased uncle but cannot spend them here or transport them out of the country myself. I am looking for an honest, god-fearing European associate ..............."?

In that case it's most definitely genuine and you should immediately give them your bank account details and send the necessary 10% of the sale price to his account to facilitate the transportation of the money to England. I know this because I am already dealing with him and eagerly awaiting my 10% share of the money.

jamtart6

No..but they aren't far off being that 'eager' !