new build advice needed!

daisy9974

Long post, but thought it'd be better to get all the facts down!
Last week we put down £1000 reservation fee on a new build, we'd got 5k off list price, stamp duty. £500 legal fees, and carpet. We are purchasing through a 75/25 shared equity scheme with the home builder and because of this are tied to using there financial advisor and solicitors.

Now the solicitors quote has come through at £1212, not including stamp duty cost breakdown
solicitor fee - £395
vat - 59.25
mortgage fee - 115
local search fee - 138
official search - 6
bankruptcy search - 4
telegraphic transfer fee - 51.75
stamp duty land tax admin fee - 115
house builders documentation fee - 115
solicitors postage, photocopying and fax fees - 63.25
This seems a lot what does everyone think?

Secondly the only deal that the financial advisor can get us on the mortgage ties us in for three years, which we don't want as my husband inherited a property and if this sells we want to use some of the capitol to pay off a chunk of the mortgage.

As we've already paid a reservation fee is it too late to go back to them and renegotiate the price? Any advice would be appreciated!!

SavingSteve

You can renegotiate. Depends what the builder wants to do, if they are nice they will let you keep the 1k deposit whilst renegotiating.

Worst case scenario you lose the 1k, but then you are more than likely to recoup this on the discount.

IMO, without knowing the price, I'd say 5k off + stamp duty paid is not enough of a discount, you could've got way more off than that.

zone

How much was the list price? As the poster above said i think you could get at least £10k off depending on circumstances. Would you be prepared to lose your deposit and start again?

daisy9974

list price was 190

terrierlady

what about the cml form, the valuer will ask for this when he goes to the development and each b/soc has its own rules on incentives so whilst the developer might give an increased incentives will they allow it

Richard_Webster

It is professional misconduct for a solicitor to be party to a deal which restricts a client's choice of solicitor - so I would ask the builder why you have to use their solicitor. Ring up the solicitor and ask if you have to use them - they will wriggle then....

Also look at all these add ons:

£395 + £115 for mortgage - £510 is not too bad.

But then you get TT fee of £51.75 - (£45 + VAT) come on!!!
SDLT admin fee - £115!!!! (£100 + VAT)
Postages etc £63.25 (£55 + VAT)
So the real fees are £395 + £115 + £100 + £55 = £665 and an over the top TT fee.

The documentation fee is something the builder charges so you can't get round that one and that isn't to do with the buyer's solicitor.

Remember that you will have to pay back the 25% at some point and the proeprty will need to have gone up in value and your earnings so you can afford the further loan to pay off the 25%. If it goes down in valu eou wil haev a negative equity situation because you will owe your mortgage lender more than75% of the then value which will mean that you wouldn't be bale to borrow to pay off the 25% and if you trie dto sell there wouldn't be enough money to pay off both the mortgage and the 25% "loan" from the builder.

unite79

Richard, just read your post - This is common for New Build to insist on Solicitors - I know this has been challenged by Mortgage Brokers, and in most case lost - Surprised the Law society have not got involved.

Went with a mate to look at a Redrow house, he was told he HAD to use Solicitor and Broker -

daisy9974

Thanks Richard,
there was 130,000 equity in the property my husband inherited, know that has come down, but there should hopefully be enough to pay off the 25% and a chunk of the mortgage, we also have 20k to put in ourselves at this point, i'm going to get onto the builder and solicitor this afternoon when my two tiny terrors are in bed and I have some peace! also solicitor sent a power of attorney form so partners can sign documents on our behalf, is this normal practice? Thanks!

Richard_Webster

Not normal for partners of firm to sign on your behalf unless you are going to be out of the country.

In practice in the market at the moment I would.say to the builder that if they take that attitude about having to use a particualr solicitor/broker, you will buy from another builder....

elspeth240

Is the house actually built yet? If not, what happens when the value comes down so you can no longer get the mortgage for it and have to pull out? The builders will then pursue you for the remarketing costs plus interest which will be thousands.

Premier_2

daisy9974 wrote: »

...Now the solicitors quote has come through at £1212, not including stamp duty cost breakdown
solicitor fee - £395
vat - 59.25
mortgage fee - 115
local search fee - 138
official search - 6
bankruptcy search - 4
telegraphic transfer fee - 51.75
stamp duty land tax admin fee - 115
house builders documentation fee - 115
solicitors postage, photocopying and fax fees - 63.25
This seems a lot what does everyone think?...

I might be wrong, but this seems to only total £1062.25