First time buyer... can I haggle on the price of a new home??

talksr

Hello,
I am a first time buyer who has been saving and saving to move out of my parents home. I finished uni last summer and during and since then have been saving as much as I can. I have about 20k and have done lots of mortgage quotations for a 180k home close to where I live.
It is a brand new home in a new development.

My only worry is being a fresh graduate, I don't know how long this job will last for, and I want to get the house for the cheapest I can so I know I can keep up the mortgage payments.
I get almost 28k per year, but work is flexible so I am not always working.

Are you able to haggle with the price of a new build or is there not much flexibility?
I have drafted an email to send to them saying, your home has been on the site for sale @ 185k for 4 weeks with no buyers, I am looking to paya little less, would you be interested?

Also my other worry is living with parents, I just pay my mum some money each week, but have no idea about how much the council tax would be or other local rates. I am sorted for power bills and heating etc.

Any help would be really great.

Thanks:T

talksr

This was the sort of letter I was planning on sending....

Good evening, I have been very interested in xyz property you have available in the new development in xyz.

I am a first time buyer looking for a small home for the right price.

I have driven down to the property a couple of times and had a look around outside, I really like it and think it is perfect for my needs.
The asking price is a little too high for me at present, and I was wondering what the flexibility for lowering it was as it appears to have been for sale for at least 4 weeks with no takers.

I have my mortgage calculations done for me by a friend, my biggest problem is my London based commute swallows a very large amount of my salary so I would be looking to obtain this house for the best viable price I can.
As you can appreciate, I have picked the cheapest house going on your plot at the moment as money really is an influencing factor.

I look forward to your reply.

G_M

Yes you can haggle but far better to do it a) face to face with a negotiator/sales person and b) from a position of strength ie with a mortgage agreed in principal (to show them) and evidence of equity. they will then take you more seriously as a potential buyer.

An email will not be taken seriously.

talksr

G_M wrote: »

Yes you can haggle but far better to do it a) face to face with a negotiator/sales person and b) from a position of strength ie with a mortgage agreed in principal (to show them) and evidence of equity. they will then take you more seriously as a potential buyer.

An email will not be taken seriously.

Ah thanks, thats really helpful. I think I will go down that route. Like you say, it shows I am serious about it.
Do you think I should get a mortgage agreed for a lower sum? So maybe £170?
The problem is I have no conception of what sort of money we could knock off? Its not like a car where it is a few hundred, so I have no idea. Could be talking 5 grand, 10? 20?!

COLA_2

I've always been advised to go in ten per cent under asking - it worked for me - but it really depends on the property and what it is worth/ Looking on sites like Zoopla or mouseprice will tell you how much other places in the area have sold for to give you a better idea.

Milliewilly

talksr wrote: »

This was the sort of letter I was planning on sending....

View it first!!

I think your letter is very polite but it shows that you are very keen and you need to be nonchalant! After all you are in the next best position to a cash buyer.

If you get a reply at all it will be to meet with their negotiator. So - arm yourself with comparables and look at other properties around the same price.

If the house is complete i.e kitchen fitted etc then they will want to shift it asap so don't be sucked in by them and negotiate hard. I would start at £150K - you can always go up. Your mortgage valuation surveyor will have the final say anyway.

talksr

Milliewilly wrote: »

View it first!!

I think your letter is very polite but it shows that you are very keen and you need to be nonchalant! After all you are in the next best position to a cash buyer.

If you get a reply at all it will be to meet with their negotiator. So - arm yourself with comparables and look at other properties around the same price.

If the house is complete i.e kitchen fitted etc then they will want to shift it asap so don't be sucked in by them and negotiate hard. I would start at £150K - you can always go up. Your mortgage valuation surveyor will have the final say anyway.

Thanks, some really useful advice from both yourself and COLA.
What you suggest is a very good idea. I am very good at bargaining hard, but have just never done it with property, so it is a new area for me. But posts like this are a great help.

Thanks again for your help.

Emmzi

before you do - 28k salary, up to £160k mortgage = 5.7 times salary.

Proceed with extreme caution! Is it worth cooling your heels for another year until you have a) more deposit and b) a pay rise? I'd be very concerned about your amount borrowed.

Blacksheep1979

as above - are you sure you can get (and service) a mortgage of this size?

JQ.

If you're not embarrased by your offer then it's to high. Developers are under extreme pressure from their banks at present and are very open to offers. I agree with Milliewilly, don't be going above £150k on your first offer, you can always increase the offer if it's refused.

Running_Horse

talksr wrote: »

Hello,
I am a first time buyer

You are not a FTB until you have a firm mortgage offer in place, You are a chancer or a dreamer at the moment, especially with such a high multiplier. With irregular work, how many banks and building societies are going to offer you that much? And without the discount you are hoping for, the valuer is likely to tell you the house is not worth it any way. Even if you sort out the details in advance, I suspect the experienced negotiators at the house builders will eat you for breakfast. Step one: Get that mortgage offer in place.