Saturday, July 19, 2008

Developer money games for the desperate or dim

Three Quarters of the Answer

Three-quarters of the answer In their desperation to sell you a home, property developers have come up with a new wheeze: they'll front up 25% of the asking price.

Posted by hardlianotion @ 07:01 PM (884 views)
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8 thoughts on “Developer money games for the desperate or dim

  • Informative enough, but if they are going to wade into giving advice, they should point out that a 25% “buy now pay later” deal is not the same as a “no, why don’t you just give me 25% off” deal.

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  • Just got to point out that less than a couple of years ago, the first time buyer was officially Not Needed Anymore.

    Now, as we knew all along, they are the be-all-and-end-all of the housing market. No FTBs = no housing market.

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  • So which price goes to the land registry?

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  • Funny how they avoid giving a genuine discount. It’s like a Taboo. Petrified in case they ‘talk’ the market down.Yet the first rule in selling is to give a discount to enable a sale. If you don’t, the market will soon find it’s own level. It’s called : Value.
    Just shows how false it really is!

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  • Who are the developers trying to kid? What they are saying is, buy a property at their own grossly inflated value (genuine market value might be less than half theirs!) and they will be so generous as to give you an interest free mortgage on 25% of the cost! They must think buyers were born yesterday! Their deals are an insult to the intelligence.

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  • it_is_going_with_a_bang says:

    You could of course take them up on it and pay them back that 25% for a very long time or alternatively just wait a year and let the prices go down by 25% and then not have to pay back that 25%. Would seem to make a little more sense…..

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  • eyeoftheweasel says:

    The article points out that the lender still might not consider that the property is worth what the developer says it is worth, in which case you should still be able to negotiate the price down. Or are the developers hoping that the banks won’t notice that the buyer is only borrowing 75% of the purchase price, and they effectively have a loan with another lender for the other 25%?

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  • This is nothing but mortgage fraud. The FTB goes to the bank asking for a 75% LTV loan, and gets the rate you would receive with that amount of deposit, but really this is a 100% LTV loan for a property sold at an inflated “price”. It would be nearly impossible for a FTB to get a 100% LTV loan like this in the current environment. The FSA is supposedly cracking down on mortgage fraud, but somehow I imagine they won’t be bothered to prosecute anyone as large as one of the builders behind this scheme.

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