Real estate giveaways

i love the "1-in-10 chance to win a mercedes".

if i keep the receipt can i return the house?

why not just drop the price? maybe its just me, but when i am making the biggest purchase of my life i dont want gimmicks. that just makes me think that, if they need these ******** gimmicks to sell the place, it probably isnt worth buying.

drop the price. face it, you developers are going to have to sell it at a loss if you want that financing off your books. knock down the price by 20% and they will be gone in no time.
 
not yet. the gimmicks are ways for them to make it seem cheap without actually giving up real cash. but if they want to move the properties the main thing is to just drop the price. i suspect there is a lot of collusion going on in new developments, though. if one developer started undercutting the rest it would be mayhem...
 
urchin said:
not yet. the gimmicks are ways for them to make it seem cheap without actually giving up real cash. but if they want to move the properties the main thing is to just drop the price. i suspect there is a lot of collusion going on in new developments, though. if one developer started undercutting the rest it would be mayhem...
Click to expand...

I see that australand are offering to put 25k into your mortgage account. Why they would do this, rather than just reduce the purchase price, I do not know.
 
Ethann said:
I see that australand are offering to put 25k into your mortgage account. Why they would do this, rather than just reduce the purchase price, I do not know.
Click to expand...

Friends I have spoken to would rather have the $ given back to them instead of reducing the price (on houses, cars, Tv's - anything) - seems they look at this as 'free' money because without this 'promotion' they would have spent that money anyway.

I purchased a camera a couple of months ago & it had a $200 cashback offer on it - there was no way the saleman would reduce the price by another $200as it was by redemption from Nikon only - no other way to get the refund. I wonder if people will have to apply for the $25k or if it will be automatically refunded?

Guess it is a bit like FHOG increase - people dont say 'oh good now we dont have to borrow as much' - they look at it & say 'oh good now we can borrow more'??

Cheers
Stella
 
I think often giveaways/cash back/any other gimmick out there is just a ploy to reduce negotiations on the price. i.e.

For example:
"Well, we're already giving you $25,000 cashback, and you're trying to talk the price down?"

Simple marketing ploy...
 
Stella said:
I purchased a camera a couple of months ago & it had a $200 cashback offer on it - there was no way the saleman would reduce the price by another $200as it was by redemption from Nikon only - no other way to get the refund. I wonder if people will have to apply for the $25k or if it will be automatically refunded?
Click to expand...

My understanding is that part of the reasons for cashbacks is that many people don't actually apply for the cashback. Recently a friend of mine bought a printer. I asked him how much he paid for it. his reply was along the lines of "$XXX but with a $200 cashback. Damn I forget to send the cashback in and it expired at the end of last month".

HandyAndy888 said:
I think often giveaways/cash back/any other gimmick out there is just a ploy to reduce negotiations on the price. i.e.

For example:
"Well, we're already giving you $25,000 cashback, and you're trying to talk the price down?"

Simple marketing ploy...
Click to expand...

Good point.
 
I reckon it's so they can get more finance (valuation being on sale price).

It's like the old scam, 'lets say I sold it to you for $100k more then give you $100k cash on settlement'.
 
Stella said:
Friends I have spoken to would rather have the $ given back to them instead of reducing the price (on houses, cars, Tv's - anything) - seems they look at this as 'free' money because without this 'promotion' they would have spent that money anyway.

I purchased a camera a couple of months ago & it had a $200 cashback offer on it - there was no way the saleman would reduce the price by another $200as it was by redemption from Nikon only - no other way to get the refund. I wonder if people will have to apply for the $25k or if it will be automatically refunded?

Guess it is a bit like FHOG increase - people dont say 'oh good now we dont have to borrow as much' - they look at it & say 'oh good now we can borrow more'??

Cheers
Stella
Click to expand...

This makes total sense to me. Borrow as much as you can and then park spare cash in an offset. It's not just the ignorant that would use this strategy. I consider myself very financially aware, and it sounds like a good way to expand your options.
 
I think lenders would take a dim view of this and value accordingly. So if your place cost $200K and you got a $25K cashback, I think you'd end up with a value of $175K......they may only lend on $175K, knowing that you have the $25K to pay them at settlement.........maybe
 
offering a car in the mix - just doesn't make sense.

won;t a smart valuer just equate that house value - car value = bank value...?
 
Blue Card! said:
offering a car in the mix - just doesn't make sense.

won;t a smart valuer just equate that house value - car value = bank value...?
Click to expand...

When a valuer looks through a house and then checks comparable sales, do you think they even know that there's a car in the deal? How would it even be on their radar? And more importantly, why should it be on their radar? They need to look at the house and say house is worth $x.
 
You may get away with the car, but if the cash is mentioned anywhere near the contracts then I think the situation outlined by Blue Cardi and myself still stands
 
The valuer will certainly take into account any "cash back" offer or gimmicks such as a chance of winning a car if it's written into the contract.

Where a purchaser may benifit is where their lender doesn't need to conduct a valuation (they will do one if they knew about such an offer). It would allow then to borrow more and put the "cash back" into their off-set account. Having said this you would be paying SD on the higher amount and have a higher monthly commitment which may hinder some potential buyers.
The car offer (raffle) is buy far a worse proposition (unless you win it ;)) as your sure to lose equity pretty smartly.


Regards
Steve
 
There's a developer that posts on here a bit (Mark C?) who was giving away a Toyota Prius with blocks in his "green" development

From what I understand it went well for him. I would imagine people would think hey I get a $40k car (or whatver they cost) for free with this block and no doubt Mark got a decent fleet discount off retail too

Seems like win win to me
 
super_sam said:
There's a developer that posts on here a bit (Mark C?) who was giving away a Toyota Prius with blocks in his "green" development

From what I understand it went well for him. I would imagine people would think hey I get a $40k car (or whatver they cost) for free with this block and no doubt Mark got a decent fleet discount off retail too

Seems like win win to me
Click to expand...

I have been wondering how Mark C got on with this development as there hadnt been any update that l was aware of on this site.
Hope he did do well with it and the cars.
cheers yadreamin
 
I've seen quite a few developers also advertise that they will guarantee rent for between 12-24 months. Usually around 7%-8% yield. This is different to leasebacks for display homes which usually run for 6-12 months I assume.

Not sure if these are still around now that rates have started dropping rapidly. I'm quite sure a lot of these would have been cashflow positive by now. However, the estates that were offering these were usually what I consider to be undesirable.
 
How would a cashback deal effect CGT?

I would presume the ATO would take a very dim view of the following.

Buy property valued at $300k for $400k
Get $100K cash back.
In a few years sell for $400K zero capital gains.
 
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