How much to offer on a new build

Balarissa

Hi. We are currently buying new-build off plan and I would say we are aware that it is a higher risk than buying normally from the open market as it were but you need to weigh up what is important to you. Some people will always hate new builds for various reasons and others will always love them!

It's not true that Woolwich and Nationwide are the only lenders for new builds - get yourself an independent broker as others have advised (not new homes mortgage helpline!!)- our mortgage is from Alliance and Leicester who have carried out a pretty good valuation on our new build even though it isn't actually fully built yet! We are on a 20% LTV. They easily agreed with our offer price. (If the developer tells you that you have to go with their broker, get them to clarify this as they are likely telling porkies. Our sales lady said we 'should' go with new homes mortgage helpline because our independant was 'unlikely to keep them in the loop which could mean we lose the house' but when we pushed this she revealed that we could go with whoever we liked, so they make it sound like you must use their broker when this simply isn't true)

Make sure you know what is available in your area and what the prices are based on. For example, we haven't got anything close to 30% off the asking price for our three-bed but their original price when the plans were released for sale were considerably cheaper than we had anticipated, probably to reflect the current housing climate. For example, the same builder has a development 1 mile down the road from our new place, similar town-houses but 4 bed with balconies and sea views which are up for over twice the cost of our asking price. The extra room and balcony doesn't account for that price so I would expect to knock much more off that build than ours. My best advice is contrast with similar properties as much as possible! Another example is another build we considered for a smaller house was priced at 25k more than the one we have gone for, again, I'd expect to be able to knock more off that price.
Also you don't want to look like a time-waster if you go in and offer half of the asking price, they might pin you as a dreamer rather than a serious buyer, I'm sure negotiation will be smoother if you know your market.

You will be getting a better deal for buying off plan. We reserved our property near the end of July and they have added a further 3% to the asking price already.
Make sure when making your offer that you know what you are agreeing to in terms of white goods, garden, fixtures etc. Some places will come without a turfed garden for example, or no flooring at all. You can add this into your haggling but whatever way you chose to go make sure you are aware of it and capable of buggetting for the extras.

swordsman2007

New Homes Mortgage Helpline
Ask for a full confirmation of their fees before even talking to them. That includes everything from finders fees and their valuation costs - you have to use their valuers who are more than you pay directly to the banks.

geoffky

Kyrae wrote: »

We're in the process of buying a new build off plan and have approached a few lenders and none had a problem with it being a new build, though one lender said they don't like new builds if they come with money based incentives as it complicates matters.

We tried negotiating but couldn't get any money off, just some carpets thrown in for free, as they said they come in with low prices to sell off plan then raise the prices later. True to their word, they have since put the prices up. Don't bank on getting any money off, just do your research and check the prices are similar to the prices that houses are currently selling for in the area

this depends if you are good at negotiation or not...anyone offering full price for a new build in this market had better off spending it on a good head doctor... negative equity will be your friend for a while..