New builds and 5% deposit paid

Gazzadfc

Looking at a new build with one of these offers where they pay all legal fees and 5% deposit paid, however as a sort of 1st time buyer I also have a further 25% deposit to put down.

Would it be best to either negotiate the asking price using my deposit or just add this to the one they are offering ie their 5% + my 25% (30% total)

Thanks for any advice.

bylromarha

Personally, I would probably tell them what price you are willing to pay for the house without the special offers.

Effectively the house is already 5% cheaper than the asking price, then they throw more freebies your way, so in real terms, the price of the house is lower anyway. Before you make a low offer to the builder, do some research to see how much the legal would cost and how much that freebie is worth in real terms...eg are the builders only paying for the legal time, or are they paying for the cost of the searches too?

You're the sort of buyer the builders want as you can move quick and get money in their bank faster than a 2nd timer. You're in a strong position as you have a substantial deposit and a FTB- use it to your advantage and bargain hard. The least they can do is say no to your offers.

All the best

nmiah786

Apart from the 25% you have to put down, have you budgeted for other cost such as stamp duty, furniture and moving cost or as that inclusive in the 25% you have.

I would keep some money aside and put as much deposit as I can so that the repayments are lower.

Example 1

£200k asking price, developer pays 5% = £10k, you put down 20% = £40k hence 75% mortgage required is £200k - £10k - £40k = £150k.

Example 2

However if developer reduces the price by 5%, purchase price = £190k, your 20% deposit = £38k, 80% Mortgage required = £190k- £38k = 152k.

Example 3

If you pay your initial £40k down and developer reduces price by 5%, purchase price = £190k - 40k = £150k mortgage (78.9% mortgage)

I would prefer example 1 as it gives me a better loan to value for mortgage purposes hence better rate maybe!!! Okay I will pay a little extra in stamp duty (£100 extra). Also when I come to selleing and all those people checking on th net will find that I paid £200k and not £190k :rotfl:

What I would really want to do would be to reduce the asking price by £40k and then get a mortgage on a £160k purchase price with the developer paying 5% but that not possible without it being qualified as fraud :eek:

This is my view and I'm sure someone more qualified might have a different view.

distilled

Deal, deal, deal. You're my dream purchaser!