FTB, making an offer on new build tomorrow - advice needed please!

morg_monster

You said that if you rented a 1bed place you would not have much money left to save. To be honest, you can't have that much available to save at the moment if you have only managed to save £1000 for the deposit.
I think that is the main problem people have, the tiny deposit. I just don't see how it would hurt to wait, can you answer that?

Last year when I had £500 to spend on a laptop, I spent a month researching which one to buy. Now I know that I may be particularly anal ;-), but you say its just been a few weeks since your friend talked to you about this, and you are about to commit to spending £150,000?! This will probably come across as patronising, and if it does I'm sorry, but it sounds like this is just the something you are really liking the sound of and are just really desperate to get it... You know when you were a kid and you just HAD to have the latest toy, you were so excited, but if you managed to wait and think about it, you usuallly went off it onto the new thing. I just think it can only be a good thing to sit on this a while longer.
Im sorry if that seemed patronising, I am.

Incisor

pete96 wrote: »

you obviously cant read properly... i came here looking for advise on my offer. Pipe down, rewind, and speak if you have something constructive to say (beyond some people these days)

And you have had good advice. Don't go there, people are saying - advice coming from true experience, gained at great cost. But it is true your mind is made up - and you are so full of your career and how much you earn and your plans that you will continue to walk into this trap. Actually, I think you will be smug about your situation and how you did well to ignore us fools on MSE for about 3 or 4 years at least before it possibly might penetrate that people were only trying to help.

With £1000 to your name, you are a man of straw in the property game and your place of safety is taking advice, including admonitions such as 'pipe down and rewind', not telling others to do what you plainly won't.

GDB2222

pete96 wrote: »

you obviously cant read properly... i came here looking for advise on my offer. Pipe down, rewind, and speak if you have something constructive to say (beyond some people these days)

I guess you can lay down ground-rules of what you want advice on. That's fair enough, but don't be surprised if people don't listen.

Anyway, in answer to your question, how you deal with the offer clearly depends on how much you want the place. If you're not too fussed whether you get it, then I would be inclined just to leave your offer on the table for a couple of weeks. It's not quite High Noon, where the first one to blink loses. But, I guess you want to be in the position that they've almost signed up enough other people to make it worth their while to complete the development. Then they might remember your offer, and come back to you to try to renegotiate.

If you really must have the place, then you may find yourself paying near list price.

I would absolutely be looking all over the place at the moment. You really want to find several places you can put offers on, so you are not beholden to any one of them.

pete96

I would like to make a point of how appreciative I am of every bit of advice given in this thread. It’s somewhat overwhelming how mere strangers can take so much time to offer valuable advice. I’ve learnt so much on the topic through the help of everyone involved – I feel like I’ve aged 10 years in two days – so I’d like to thank everyone involved! I only discovered this site/forum a few days ago, and it already has my recognition of being the best and most useful site I’ve come across on the net, and I hope it survives for a long time as I fully intend on using it in the future!

I may have come across as a bit ignorant, naive and stubborn to take on board the advise, but I have actually taken on board every post written. In this post I want to try and explain why I have portrayed this attitude, and I hope all involved so far reads it and tries to understand my reasoning.

It seems a lot of the negativity towards me has been my ignorance to negative equity and the consequences it can lead to. Well you will all be glad to know I’ve done further research on it tonight. I’ve fully read the ‘What are your experiences with Negative Equity’ thread in which people have posted their stories. To be fair to you all, I must say I have learnt a little extra and thought a few things threw from it. I’ve learnt that NE is fine so long as you plan on staying put and can afford your mortgage repayments. I’ve also learnt that NE is only a problem when:
You need to remortgage
You are being repossessed
You really need to move (Change of job etc)

As has already been said, and practically drilled into my head, buying now with no deposit is a HUGE risk. I think I’m pretty well up on the risks involved now (thanks to this forum). We are aware that risks are involved (despite the persistent advice contrary to this), but I’d just like to outline a couple of future rescue plans which we can resort to before we ever get to the stage of repossession….

Firstly, the point above regarding needing to move; both my partner and I will have everything that is important in our lives within a 10-15 mile radius living in this location (bar my parents obviously!). So I find it extremely difficult to see any reason to move in the future just for the sake of moving.

If when we remortgage interest rates rocket and payments are out of reach, or if one of us looses our job or gets injured and we loose a source of income, there would be one solution which may avoid repossession. My partner’s parents live in a lovely 4 bed house in a rural village. Her only brother has just gone off to uni. We are both extremely fortunate and very appreciative that, if worst comes to the worst, we would both be welcome to stay with them if our situation got that out of hand, and reside there for as long as necessary. We would be able to keep hold of our house by renting it out to help keep up with payments. This I’m sure is a lot easier said then done, and if it ever came to it I’d of course consult this site and do our upmost to make it work.

Now this next escape route may rile a few individuals, but I will say it would only ever be a last resort. If for what ever reason we got into SERIOUS negative equity, some people have thrown about figure likes -$40K for example, and bankruptcy is imminent and our lives are over in terms of living a decent life, one thing could relieve such pressure…. We could emigrate to the USA easily enough and leave it all behind us.

But with these rescue plans aside, I hear some of you saying already ‘JUST WAIT 1 OR 2 YEARS AND REDUCE ALL THAT RISK!!!’ Well yes we could wait and reduce that risk, but how long should one wait, and how ‘risk free’ should one wait before committing to buy? From what I’ve learnt the last few days, the guy with the wise head on his shoulder will be waiting until the housing market settles, reaches it’s trough or even wait until we see a slight uptrend. Well correct me if I’m wrong, but I could be 30 years old before that time, judging by most predictions. So if I only buy when I’m thirty, surely I will be overjoyed that I waited all that time knowing that there will be little/no risk in buying a house…. Or will I?? Well what I will say is, if I did do that and got to 30 before buying, if I knew that I actually could have brought a property now and actually survived the credit crunch…. I would be KICKING MYSELF!!! Knowing that I had just wasted 8 years of my life renting when actually I could have spent 8 years of my life investing in property… that thought is almost, no I’d go as far to say IS, as scary as the thought of buying a house now, in my opinion of course.

Well that’s pretty much all I have to say on the matter, it still may all be idiotic and sound like a joke to some. It would be interesting to have some feedback and opinions on it, I’m sure to learn even more and get proven wrong again! LOL

Thanks again for all the sound advice! Oh and… sorry for the essay!

Gangstabird

Pete, you say that your job is secure. Errrm architects are in great demand during times of building new buildings. The way things are going, there may not be much building going on.

I would be beside myself if you were my son and be begging you to reconsider and rent for a while. Please listen to the people on here.

pete96

surely if everyone listened to this advise and EVERYONE stopped buying the prices WILL crash!? Is this what we want? Do we not instead want to be increasing consumer confidence, encouraging buying in order to stablise the market? If this isn't true then i must not have listened in my building ecconomics lectures.

RE my job, im not saying MY job is 100% secure. However, i do feel confident that my company will survive this credit crunch - it is nearly 90 years young as a firm so has seen its fair share of ressessions. I may well get made redundant, but i dont see it as the end of the world... there are other jobs, in architecture or otherwise

BettiePage

pete96 wrote: »

Now this next escape route may rile a few individuals, but I will say it would only ever be a last resort. If for what ever reason we got into SERIOUS negative equity, some people have thrown about figure likes -$40K for example, and bankruptcy is imminent and our lives are over in terms of living a decent life, one thing could relieve such pressure…. We could emigrate to the USA easily enough and leave it all behind us.

They can pursue you to other countries now you know. You can't just walk away from it anymore without going bankrupt.

pete96

BettiePage wrote: »

They can pursue you to other countries now you know. You can't just walk away from it anymore without going bankrupt.

lol thats what they tell you, it prevents all those in debt from doing it! either that or if they can they dont bother. i know of two people who have successfully done it with tens of £1000s of debt.

Anyway, as i said, very last resort!!

ginvzt

Have you thought of the case when in 5 years time you can't remortgage due to negative equity, your partner becomes pregnant (maybe even twins) and can't work for some time, so you only have one salary to rely on. Also, it is a 2 bed house, so if you have children, you may feel cramped and want to move, but you can't due to negative equity!!!!

You can't just hand in the keys to the bank and leave - any shortfall in the sale price and the mortgage you will have to cover. And I find it appalling that you are even considering to run off to another country. I actually have a very low opinion of people like that. It is no resort at all!!!!!! Take responsibility for your own actions.

penguine

pete96 wrote: »

surely if everyone listened to this advise and EVERYONE stopped buying the prices WILL crash!? Is this what we want? Do we not instead want to be increasing consumer confidence, encouraging buying in order to stablise the market? If this isn't true then i must not have listened in my building ecconomics lectures.

It's not your responsibility to single-handedly attempt to prop up the economy.

Personally I think 90-100% mortgages and schemes like the one you've applied for which enable FTBs to purchase a home with little or no deposit should be abolished. It's immoral for builders and mortgage providers to tempt people with so few financial resources into a falling market and the fact that people are still falling for these offers shows how many have been brainwashed into believing that buying a home before they're 30 is the best move they'll ever make. You say your rent is currently very low, yet you've only managed to save £1000. You haven't demonstrated that you can manage the expenses that come along with owning a home or that you understand the value of money. If you'd saved hard to come up with a 15-20% deposit over the course of several years you wouldn't be throwing it away so lightly.

Hazel Blears would love you.

www.moneyweek.com/personal-finance/dont-listen-to-hazel-blears-dont-buy-a-house-13546.aspx