whats seen as a reasonable offer for a new house

emma7warriors

I have found a new development in Billinge, Lancashire. The asking price for a 3 bed semi is £149995. The builders aren't building unless they get a deposit down on a plot and are currently offering only 5% deposit with carpets or a helping hand scheme of 85% pay up front and the other 15% within 10 years. They talk as if they are giving you something for free but they still get the asking price which i feel is to high in the current climate! What would be a reasonable offer I am a frist time buyer with a 10% deposit so in a pretty good position.
Thanks

Sonofa

You'll need webbed feet, it always rains up on t'ill.

Be warey of new builds and buying off plan. You say you have 10% deposit. They want 5% up front. Before they build the house. Say it takes 12 months to complete the build, how much will the house's value have dropped (assuming the current price is even realistic)? And then will you be able to get a mortgage for the amount the builder is asking and you signed up to if the lender values at substantially lower?

emma7warriors

They only want £500 up front and the assurance you can secure a mortgage which i have. They have stated they are only building to demand and i can afford to wait for it to be built as i can continue to save. Just wondering what to offer!

thebaldwindowfitter

try with 10k below

NoDebtForMe_2

Hi
Are there any houses already lived in on the same development/street? If so, Check out the nethouseprices.com to see how much they sold for for the same house type. Then you can see if it has dropped at all in the last 6 months to reflect the current climate. Then base your offer on that. I started at £170,000 for a £220,000 house which had already sold last Aug for £289,000. I got it for £190,000.
You will no doubt get various people telling you not to buy off plan saying it wont be built but I have just bought off plan and was told a completion date of July/Aug but they have brought it forward and are now completing in May. I am sure I am not unique and special.
Sarahx

hethmar

Dont forget once you exchange contracts you are tied in, whatever happens. You should get an independent solicitor and make sure you have a deadline written into the contract for completion of the house.

NoDebtForMe_2

hethmar wrote: »

Dont forget once you exchange contracts you are tied in, whatever happens. You should get an independent solicitor and make sure you have a deadline written into the contract for completion of the house.

National builders use standard contracts (one size fits all) and wont put a date into it other than to say within 18 months or so. You can get the solicitor to adjust it through negotiation. Mine got them down to 12 months but only because I used their recommended solicitors (shock horror!) and she had previously negotiated this with them as she had a rapport already.

emma7warriors

i have already checked the details for sold houses but none have sold since the credit crunch think one sold for £127995 on 24/11/08, the only one they have sold of this type is to one of their builders who gets company discount

Robert_Sterling_3

Sonofa wrote: »

Be warey of new builds and buying off plan. You say you have 10% deposit. They want 5% up front. Before they build the house. Say it takes 12 months to complete the build, how much will the house's value have dropped (assuming the current price is even realistic)? And then will you be able to get a mortgage for the amount the builder is asking and you signed up to if the lender values at substantially lower?

Wise words here from Sonofa. I entirely agree.

omelette451

emma7warriors wrote: »

i have already checked the details for sold houses but none have sold since the credit crunch think one sold for £127995 on 24/11/08, the only one they have sold of this type is to one of their builders who gets company discount

They still won't have built it for no profit though, so there's no reason why you can't use this as evidence and ask for the same price to apply, or at the very least not much over it.

I admit I don't know much about buying houses but I'd be very wary of paying for something that they currently have no intention of finishing. How secure is the company? If it's a big name I could probably accept it, assuming someone I trusted agreed the contract was fair, but if it's someone I'd never heard of I'd probably shy away.

skyjumper

emma7warriors,

I dont know ur personal circumstances, but please consider my suggestions

PLEASE PLEASE PLEASE - DON'T commit urself to a new build which is not even built. I know the feeling of £500 securing the deal. but just think about the next 2-3 years, when you will see the builder slowly trying to build ur house. I'm not joking. this has happened to me. and I changed 3 mortgages (long story), even before getting the actual mortgage after 2 years of first commiting with £500.

If u still think u should go ahead, make an amendment in the contract they make u sign -saying that if they dont hand over the keys -for u to move in by a certain date, u can pull off completely and they will return the deposit along with the other expenses u would have incurred by then, including the valuation fees and mortgage arrangement fees- if they r happy doing this- which I don't see happening- all the best - make an offer 25% less than the current asking price and walk away. they will call u.

forget about the new bulit -which is not even built- they r making u commit to something u will 100% regret after a while- i'm saying this from my own experience and would like to save someone who i know is going in the direction I have already travelled - it's bitter experince all the way

sorry for being negative, but take my word.