When buying a property, it’s important to be aware of some of the gimmicks an eager seller might try to secure a sale.
Gimmicks may be used to entice you into a property transaction, so it’s important to understand how they might work. This is made a little harder by the subtle difference between incentives and gimmicks.
Incentives may be worth pursuing, while gimmicks are more likely to be deceptive. Therefore, beware of sales gimmicks when buying a property.
What are incentives?
Some incentives have real value and may be worth taking up.
An incentive could be a vendor’s offer to pay your legal costs, such as your selling agent’s fees or even your stamp duty.
This effectively increases the amount you can pay for the property, or reduces the amount you need to borrow.
The alternative is simply to negotiate a healthy discount on the actual sale price.
What are gimmicks?
When a seller resorts to gimmicks, it’s because of an eagerness to sell. A gimmick aims to make this particular deal stand out from other properties in the same area.
Gimmicks may be used to sell older properties which have failed to sell on their own merits. In other words, a gimmick is a diversionary ploy to distract you from other issues affecting the property.
If the payment of legal costs is offered to bring an overpriced property back into line with the ruling market rate, for example, you have gained nothing – the offer is simply a gimmick.
Some would argue that the Chancellor’s decision in the recent autumn budget to slash the need for many first-time buyers to pay Stamp Duty will simply have the effect of increasing house prices by at least the same amount. The move was no more than a gimmick to woo voters.
Distinguishing between gimmicks and incentives
It’s important to spot when an incentive (which you want) crosses the line into a gimmick (which you don’t want).
Developers sometimes offer discounts to buyers as a way of releasing capital tied up in the building works. So, it’s worth checking whether you might get a better deal on a similar property nearby.
When differentiating between incentives and gimmicks, asking a few direct questions to the developer or sales agent may help. Asking questions may allow you to distinguish between an incentive and a gimmick, by understanding the sales pitch and letting you know whether you’re better off looking elsewhere.
Your solicitor will need to know all that has been agreed as this will form part of the contract of sale. Need a solicitor? Tell us your requirements and we’ll connect you with a professional.