Advice needed

Dammam

Please bear with me if this is already common knowledge around here - I'm reading all the threads as quickly as I can!

Here's the basic story, without the embellishments. We have seen a house we would like to buy. It is one of three 6 bedroom properties newly built last year and yet to be sold. The price has dropped from an initial £470,000 at completion of build to £450,000 with stamp duty paid. Part exchange will, it says, be considered.

We have a house about 12 miles away valued at roughly £350,000 - 4 bedroom, 6 years old, double garage. We would like to part ex this for the new house.

Estate agents came around today and think the property (ours) is only worth £300,000 max (even though another branch of theirs has a similar house 20 yards away on the market at over £500,000!). She said she'll ask the builder if he might consider it but he is "quite stubborn and in no rush to sell as he doesn't need the money"!

I'm really inexperienced at all this - to me it sounds like she's simply trying to get the best deal for the seller. It's not like the houses are currently an appreciating asset and I can't believe he's happy to leave 3 6 bedroomed properties unsold for over a year!

What are our options? We have £100,000 cash available and had hoped that the part ex would enable us to move pretty quickly. This is the ideal property in the ideal place for us, but we can't afford to go too much higher. I'd sell privately, but that would really slow things down in the current climate. I honestly thought they'd bite our hands off at £100k cash plus a new, 4 bedroomed property in the Wye Valley. Is it a bit of an estate agents game?

Thanks for looking in.

poppysarah

If the builder doesn't need the money but you want to move, then sell yours and rent until the builder is ready to sell at the right price. You might find yours hard to sell though.

hethmar

Just wait a while and see what the offer comes back at. The builder will need the money, dont doubt that and he will want you moving in so that its an incentive to others to buy his houses. Of course the agent is acting in his favour - after all, she will be getting commission on those three houses and nothing on yours

Sit back and wait and then decide your next move.

GDB2222

470k to 450k is not much of a drop. There is talk of 40% reductions on new-builds.

Davesnave

There is no 'might' about it; you will find your house hard to sell at the moment. Even if you find a keen buyer, there is going to be a chain, which can break at any point, but particularly at the bottom. You may also be gazundered. I've been SSTC three times this year - not the Wye valley, but somewhere equally desirable.

On the other hand, there no small builders who can afford to have 3 large houses kicking about for a year or so. The longer they stay like that, the less chance of anyone wanting one, as hethmar says. A 40% reduction on a rural area small estate is unlikely, but 4% or so from last years price & stamp duty is taking the mick.

Prices aren't going to start rising anytime soon and no one is rushing to buy these houses. As you will have lots of other options, I'd play hardball.

Dammam

Thanks all.

Poppysarah - I don't think renting is an option, as it'll just eat away at our deposit plus finding a big enough house in the area to rent would be difficult. This place is ideal for schools etc so causes less disruption to the kids.

Hethmar - yes, that's my take on things, it's nice to see that someone else is of the same opinion.

GDB2222 - I agree that the drop is incredibly small on a place that has been empty for a year. Whilst I wouldn't expect 40%, I think 7 - 10% wouldn't be unreasonable.

Davesnave - I know selling would be difficult, which is why I'm in a bit of a quandry. That's why the part-ex would have been so good. I thought it would be good for the builder too, as it would surely be easier to sell two 6 bedroomed houses together (and next to one that's already occupied) plus one 4 bedroom house in a different area than three 6 bedroom houses together that just aren't selling.
On the options front though, I don't really have that many if any. The house is ideal but I guess the trick is not to let them know that - once they smell desperation they'll screw every last penny out of me, right?

Hopefully, they'll come back to us today and we'll find out if there's some room for negotiation. I'll keep you all posted. Thanks again for the advice.

GDB2222

Dammam wrote: »

GDB2222 - I agree that the drop is incredibly small on a place that has been empty for a year. Whilst I wouldn't expect 40%, I think 7 - 10% wouldn't be unreasonable.

The AVERAGE reduction from asking price across all properties at the moment is just over 10%. A new build that's been empty for a year ought to have a much bigger drop. If you can't get that, then hold off buying. After all, there are 3 of them there.

The developer is trying to have it both ways - knock you back on your sale plus get you to pay top dollar for the new build.

In your position, I would sell my place privately first, then look around to see what I can buy.