New build negotiation tips please?

covmike · 27 June 2012 at 12:51PM

Hi all, I have used these forums many times in the past for information and have found them invaluable, but have never had the need to post myself.

My girlfriend and I are looking at buying a new build property using the FirstBuy scheme.

I am seeking advice on how to get the best deal both in sale price and added extras. The property has been for sale for some time now so I believe that the developer is struggling to sell which is on my side.

We are first time buyers so no chain or sale of property to worry about and think that we are ideally suited for the developer.

The advertised price is £179,950 and I wondered what an acceptable offer price people think is? How much do you think the developer should sell for? It is a 3 bed semi in Coventry.

Any other tips or advice is going to be very much appreciated.

Thanks everyone and keep up the good work.

Mike

LauraWxx · 27 June 2012 at 4:26PM

have you asked the developer if they will negotiate?

I am in the process of buying through first buy and my developer told me they were unable to negotiate on price, however they would throw in carpets and lino's.

However this was the last apartment left and they did have someone else coming in to ask about it whilst i was there - so they were perhaps able to hold out.

Anyway ..... the line i was fed was because the interest free loan is provided half by the developer and half by the government they are not able to move on price at all.

good luck...hope you manage to get some movement!!!

covmike · 28 June 2012 at 1:40PM

Ye I think that line is a common one with developers but the reality is it is an equity loan that is secured with a charge order on the proeprty, in addition to this after 5 years they also charge interest on the loan. So in reality I don't think it actually "costs" them anything. It just means that they have a slightly lower cash flow at point of sale. It actually probably earns them more money than if they sold the property at advertised price without FirstBuy in the long run.

The property has been for sale for quite a while and I think they may be struggling to shift the last few properties so I think I am in a fairly strong position. I will update on here when/if I get anywhere with it. Just wanted to hear what and how others had managed with developers.

covmike · 4 July 2012 at 11:23AM

I thought I would update now I am a little further forward.

The developer would not budge at all on price despite several attempts. They said that it was policy that they do not negotiate on price where FirstBuy is involved.

I have to say I am surprised but can accept that.

I am now going to try to negotiate that they pay stamp duty instead and perhaps some extras if possible.

I will let you know how I get on.

Fingers crossed

LauraWxx · 4 July 2012 at 12:34PM

good luck!!

out of interest...and by all means dont say if you dont want to...but which devloper is it?

Mine is with persimmon who although i have read loads of horror stories have been really good up to now!!!

good luck.....really hope you manage to get something sorted!!!

covmike · 4 July 2012 at 12:37PM

It is with Bloor.

LauraWxx · 4 July 2012 at 12:52PM

hope they manage to throw something in.

I got a voucher for 1000 off persimmon finishing touches range...this was just done by registering my details online (this wasnt advertised btw)...might be worth registering on development website and it might get you some sort of incentive?!

covmike · 4 July 2012 at 1:03PM

hmm interesting, I will have to have a look to see if they offer anything similar. I think I am already registered on their website though I will double check. Thanks for that.

LauraWxx · 4 July 2012 at 1:06PM

no prob!
for me it meant getting integrated fridge freezer and washer dryer for only about a £200 input from me!

covmike · 4 July 2012 at 1:09PM

I've just checked and no I wasn't registered.

Have just registered now but I am not sure there are any offers associated with registering as of yet.

You have to be in it to win it though so thank you for that.

dbk85 · 4 July 2012 at 1:18PM

What percentage first buy are you doing? I'm thinking of buying a property at 114,995, and they are offering new buy, the builder will pay 5% deposit. I asked developer how much discount can they do on either a new buy or standard sale. I'm not sure how true it is but they said are very limited what they can offer with newbuy as the banks have a lot of say what they can offer with it, it may be the same with first buy scheme. In my case they will only pay 5% deposit on new buy scheme, but on standard sale they will pay 5% deposit, £5,000 discount on plot price, carpets throughout, ceramic tiles to wet rooms, turf to rear garden, fridge/freezer and washer and a £695 allowance (not sure how this works though)

It might be worth to see if there is a better negotiation on a standard sale, as the property I'm interested in has gone from 114,995, 5,000 discount, and 5% deposit paid to £104,495 which is approx 10% effective discount.

I am trying for more with integrated fridge/freezer and washer and hopefully legal fees as well.

New build negotiation tips please?

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