New houses

charlie24_2

Can i ask, as a FTB with a healthy deposit. What is an acceptable undercut on the price of a new home, valued at say £140,000.

Im so new to this, and have no idea what my starting offer should be.

Thanks

SavingSteve

"Valued at say £140,000" - who has done this valuation?

betheebee

Savingsteve, I expect the estate agents valued the house when they put it on the market.
Charlie, our friend who is an estate agent has told us that a customer's property he is selling for £145k would proberbly consider £125k. I suppose it all depends on how desperate they are to move.
You could start the offer at £120k and go up. HTH.

Credit_Check_Services

If the agent says it is valued at 140K then when the mortgage valuer checks it will almost certainly be less. You could do some checks to see what similar properties are selling for on Rightmove.co.uk (typically I would take 5-10% off any asking price to get closer to actual valuation), your could also check houseprices.co.uk .... you may find sold prices of other properties in the same postcode, you may even find the price next door has just sold for ... gives you some good info to negotiate with.

princeofpounds

Asking price is nothing more than a guide to the vendor's expectations. Thinking about it in terms of % relative to asking price is wrong, because the asking price can be anything - good bad or indifferent. Asking prices at the moment are often particularly inflated precisely to get you to anchor your expectations to that number and therefore get ripped off.

It's a hugely complex question and has no real answer except what you are willing to pay for it. But you would do better to seek absolute indications of house prices rather than relative to asking.

For instance, look at the land registry sales details for the last few years. If the average house price in the index is now similar to what it was in 2004 then look to what similar houses were selling for in 2004. If you think that house prices are going to trough lower than right now (which they most certainly will) then you want to discount that even further.

You could also look at the very latest transactions, but as there is a lag of a few months for the data and prices are falling at 1-2% per month then it's unlikely to be useful just now.

If data is a bit tight you can take what you can find, estimate rental yields that might be appropriate and what the property might rent for. From that you could get a ballpark capital value for the house.

All this is a bit crude but frankly estate agents and surveyors don't do anything that much more complicated.

charlie24_2

sorry i probably didnt make sense.

It is a brand new home on a housing development currently up for £140,000.
What would you say is a reasonable offer i should make with me being a FTB and having around £20k deposit?

Thanks

SavingSteve

princeofpounds wrote: »

Asking price is nothing more than a guide to the vendor's expectations. Thinking about it in terms of % relative to asking price is wrong, because the asking price can be anything - good bad or indifferent. Asking prices at the moment are often particularly inflated precisely to get you to anchor your expectations to that number and therefore get ripped off.

It's a hugely complex question and has no real answer except what you are willing to pay for it. But you would do better to seek absolute indications of house prices rather than relative to asking.

For instance, look at the land registry sales details for the last few years. If the average house price in the index is now similar to what it was in 2004 then look to what similar houses were selling for in 2004. If you think that house prices are going to trough lower than right now (which they most certainly will) then you want to discount that even further.

You could also look at the very latest transactions, but as there is a lag of a few months for the data and prices are falling at 1-2% per month then it's unlikely to be useful just now.

If data is a bit tight you can take what you can find, estimate rental yields that might be appropriate and what the property might rent for. From that you could get a ballpark capital value for the house.

All this is a bit crude but frankly estate agents and surveyors don't do anything that much more complicated.

Hi Charlie, Prince of pounds post above is precisely what I was trying to say, but was too lazy to type!

charlie24 wrote: »

sorry i probably didnt make sense.

It is a brand new home on a housing development currently up for £140,000.
What would you say is a reasonable offer i should make with me being a FTB and having around £20k deposit?

Thanks

You really need to step back.

1) IGNORE the EA/Seller/Builder's valuation. The £140k is fictituous, pay no attention to it.

2) Look on Rightmove and see what a similar existing build is selling for. Look on nethouseprices and see what similar size existing builds have SOLD for.

3) Based on 2 above you can get a feel for what the asking price for that size of property should be (IGNORE the fact that it is new build, this adds £0 value).

4) From the figure you get to in No.3 (note this figure will likely be a LOT less than £140k) take off 10-15% as your starting point for negotiations.

Ed_Zep

charlie24 wrote: »

Can i ask, as a FTB with a healthy deposit. What is an acceptable undercut on the price of a new home, valued at say £140,000.

Im so new to this, and have no idea what my starting offer should be.

Thanks

That deposit will be a lot healthier if you wait a bit longer to buy. The crash has only just started and could go on a while yet.

http://uk.news.yahoo.com/21/20090317/tuk-house-price-fall-rate-accelerates-6323e80.html

Just my opinion, though.

Idiophreak

charlie24 wrote: »

sorry i probably didnt make sense.

It is a brand new home on a housing development currently up for £140,000.
What would you say is a reasonable offer i should make with me being a FTB and having around £20k deposit?

Thanks

I'm looking at new builds myself at the mo - general experience is that for an FTB with deposit, they'll knock 10% off list price without blinking an eye and I don't think 15% would be an issue - so I'd be looking around 120, 125max.

paulsin

Start at 25% off. If they need to sell they will. If you were putting the offer in 18 months ago then I would've said start at 120k. Most builders are in great need for cash. Buying a new build for anything more than 90% price is stupid in this market.

They always over state their prices byt 8.5-10%, so use 125 as a starting list price, not initial offer. Whats the worst they could do?

Idiophreak

Also, it's not clear from your posts what the status of the property is - if it's still being built, you may struggle to haggle too hard - if it's sat there empty for 6 months or a year, they're gonna be getting desperate to get the thing sold and get the sales office shut down...