Pitching an offer on new build

Littlebubble

I am interested in putting an offer on a new build (due to be completed in June). The asking price is £275000. I have a home to sell - hopefully I'd get about £120000 for it, so I'll have a large deposit. Ideally I want no more than about £80000 on my mortgage. The company are offering a 'deal' where you pay the last 25% of the home in 10 years time. it sounds like it would work well with my circumstances but still puts the house out of reach _i'm hoping they might consider a further 15% discount on the home but maybe I'm taking the mick - or more probably I'm far too trusting. How close to reality do they price new build's?

I have no idea how or where to pitch any kind of offer and advice would be appreciated.

poppysarah

to be completed.

Don't bother offering.

Littlebubble

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Now I'm really miffed!

sarah_elton

See my old post here:

http://forums.moneysavingexpert.com/showthread.html?t=1219981

The best way to save money on a new build is to find one that's standing empty with a desperate builder waiting to bite your hand off.

Even not completed though, in this climate you shouldn't be paying anywhere near asking price. 15% should certainly be do-able. And worst that happens is they say no so what have you got to lose?

poppysarah

Showing interest in one not built is too keen.
With all the blah of them being desperate to get you signed and tied to buy one without any need for them to build it.

Littlebubble

Hmmm, I hadn't thought about them not needing to finish.

Interesting to read about your friend Sarah. That's a massive way from the asking price and gives me hope!

At the end of the day I'm intending to live in this house for the next 25 years and I like the area where this one is to be built - its the only one I've seen which I like!

Incisor

Littlebubble wrote: »

I am interested in putting an offer on a new build (due to be completed in June). The asking price is £275000. I have a home to sell - hopefully I'd get about £120000 for it, so I'll have a large deposit. Ideally I want no more than about £80000 on my mortgage. The company are offering a 'deal' where you pay the last 25% of the home in 10 years time. it sounds like it would work well with my circumstances but still puts the house out of reach ...

There is a considerable risk with this arrangement, that if property values have not risen in 10 years time, you are obliged to find 25% without having the equity in the property to get a mortgage for that 25%. Also, if you sell, you may not be able to repay the 25%. A lot depends on the exact deal as to what would happen in various scenarios.

But the bottom line is that these deals only come up when property prices are going down. It is because people can't afford to buy 100% of the house, which means that the house is too expensive in relation to what the market will bear in the first place. My advice: decide how much you can offer and offer that for 100% of the house and make it very plain that you would not touch a shared ownership scheme with a bargepole [of course they may try and tell you their scheme is not shared ownership - don't let them deceive you with that].

ad9898_3

Littlebubble, do not under any circumstances offer/exchange on a property that isn't built, in the best scenerio you could lose a hell of a lot of money, the worst case you could go bankrupt.

There are quite a few people who have been on here in the last few months who have done this and it has more often than not led to financial ruin.

Steer well clear.

IT_nerd

Just remember all these deals are there to keep the property prices high. Not to help you.
I would advise against all these "deals".
Just a standard mortgage, how house buying has been for years.

mailmannz

Littlebubble,

If you are going in with a large deposit, then offer them something silly for the property then go see your mortgage broker.

If you can stay away from the 75/25 deal because you are using "real money", then you are the one that can call the shots.

I mean, what percentage of the money from your current home will be left for the deposit? What could you afford without using their 75/25 deal?

Regards

Mailman

northstar23

sarah_elton wrote: »

See my old post here:

http://forums.moneysavingexpert.com/showthread.html?t=1219981

The best way to save money on a new build is to find one that's standing empty with a desperate builder waiting to bite your hand off.

Even not completed though, in this climate you shouldn't be paying anywhere near asking price. 15% should certainly be do-able. And worst that happens is they say no so what have you got to lose?

Yeah great point... we're about to buy a new build flat that is currently empty. One month ago the price was £135k, they've dropped it to £115k and we're planning to offer them £95k as an opening. In the opinion of the agent they are more likely to let it go for about £102k but like Sarah says, what have you got to loose?