How do you know a newbuild worth your offer price??

decemberchrist

Hi all,

A very depressed FTB here. We found a flat at a perfect location for our commuting and have made the offer that we *can* pay.

However now we found out from a website formed by a bunch of previous purchasers of the flats in the same block. They were arguing that they were mis-sold the flat because of the sales skills etc. We really start to worry if the flat really worth it, as we based our offer purely on the past 6 month's price from nethouseprice.

Now, because we are only borrowing a small amount of LTV, less than 40% of the pirice, I don't know if the lender's valuer will care how much the flat really worth and give a fair valuation on it. Is it necessary to doubt their fairness on it?? Would it make much difference if we hire an independent valuer to value this newbuilt?? (is it true that they only do standard valuation on newbuilt?)

Many thanks for hellllllllllllp...

:mad:

Cannon_Fodder

If in doubt assume newbuild flats are overpriced.

If your offer is significantly under asking price, you may be ok.

If the recent sold prices led you to think the asking price, or close to it, was going to be necessary to secure it, maybe not.

The trouble with prices, even the official sold prices, on newbuilds is that developers offer cash-back and other incentives, so the real value that the developer would have accepted, had it been a straight deal, is less than recorded.

As you cannot tell from nethouseprices what cash-back or other incentives were given to each sale, you need to do some research on the development's previous advertising or apply some guesswork.

Anonymously contact the complainers' website and ask what today's going rate is...?

Maybe research the tactics/issues/actions that the complainers are heading towards - if the block gets a bad name, you might be buying something more likely to devalue.

You can always adjust your offer, up to exchange. Or seek your own valuation, if you feel it is necessary - maybe see what the Lender's valuer says - it might go low and save you the trouble of paying for your own - but with that LTV you are right in that they may not be overly concerned - you'll carry the loss.

getmore4less

Untill there are resales you will never know.

decemberchrist

Thanks CF. Exactly as you said are our concerns, and there will not be a person who can tell me a definite answer for the real value.

After second throught, I decided to negotiate again on the price. Our original offer price is only 2% lower than the asking price, which is not significant at all. And we don't get any deal, no cashback, no incentive. Any idea what kind of margin should I base on to negotiate? Also, I've seen the difference between sales prices of 1-bed and 2-bed in the same building to be around £40k. Is this normal??? 1 bedroom worth £40k??

Cannon_Fodder wrote: »

If in doubt assume newbuild flats are overpriced.

If your offer is significantly under asking price, you may be ok.

If the recent sold prices led you to think the asking price, or close to it, was going to be necessary to secure it, maybe not.

The trouble with prices, even the official sold prices, on newbuilds is that developers offer cash-back and other incentives, so the real value that the developer would have accepted, had it been a straight deal, is less than recorded.

As you cannot tell from nethouseprices what cash-back or other incentives were given to each sale, you need to do some research on the development's previous advertising or apply some guesswork.

Anonymously contact the complainers' website and ask what today's going rate is...?

Maybe research the tactics/issues/actions that the complainers are heading towards - if the block gets a bad name, you might be buying something more likely to devalue.

You can always adjust your offer, up to exchange. Or seek your own valuation, if you feel it is necessary - maybe see what the Lender's valuer says - it might go low and save you the trouble of paying for your own - but with that LTV you are right in that they may not be overly concerned - you'll carry the loss.

Trollfever

If you check out the property auction houses you may well find recent build flats being sold as repos for around half the new price..

thewinkshow

In the current climate my starting bid on almost any property would always be 10-15% under asking price.

As a general rule new builds, especially flats are always over priced, so i would be even more keen to get a discount of some kind, you may find that sometimes when its a new build they say the price is not negotiable, dont listen to this.
offer under and be prepared to walk away, im sure you will be pleasantry surprised when they call you.

Why do you think they offer every incentive under the sun on these new build flats? free carpets, free furnishings, 5% deposit paid, cashback, 70% mortgages
free council tax for a year

simple answer is because they cant sell them

these are just gimmicks to help the builder shift the inflated properties.

you lose money straight away on a new build, hence its not new anymore.

I would say stay away from this new FAD of modern city apartment living, when the FAD passed and they are worn in they will be called FLATS again and prices as such.

my advice, if you can afford a house, do it.
if you cant wait until you can

If you must buy a flat get a good price, be prepared to walk away
dont forget the following:

leasehold
high maintenence fees, will rise every year, bad service
have to tolerate many people around you (privacy)
cost per square foot ( your only on one floor, like living in a hotel)
not ideal if you have or want kids
cant really make any renovations apart from a lick of paint, they are all replicas, you cant extention or knock a wall through really, so once the new
shine of the furnishings wear off, how will it look?
no garden, think about summer, sat indoors (or maybe a communal BBQ at best)
no land, garage,only parking for one in most cases
neighbours all around you in every direction

STAY AWAY

Trollfever

only parking for one in most cases

And residents with two cars using the parking spaces allocated to visitors.

SJCJDCLSC

Why are you buying the flat? Do you want an investment primarily or a place to live? What's the probability that you will move soon e.g next 5 years, next 10 years, 15 years etc....

As others say, new builds lose value and are often overpriced, and can be hard to sell on when still relatively new (e.g you sell in 3 years time when brand new plots 2 roads over are still available from the sales office, no one will buy your lived in one over a brand new one unless you really downsell the price), there are other issues e.g will you be living on a building site for a while (loud noises, car covered in dust). Some people say new builds are not 'built' like older properties as well (although I would argue that is debatable).
On the other hand there are many great reasons for buying new, you can chose options - everything new right away with no or little DIY and up-doing costs for some time, 2 year warranty on virtually everything in the house (boiler pops, no worries they will sort it), 10 year structural warranty as well, environmentally they tend to be excellent now with good insulation, they are built (normally) more intelligently working with the space they have......

As to whether this particular one is worth it, I would speak to those disheartened buyers who have gone through it, compare other properties by the same developer (what incentives are they offering elsewhere, what is their sales record like, build quality etc). Visit other sites by the developer, pretend to be interested, talk to their sales people to get more inside info etc. This is exactly what my hubby and I did and it made us feel more comfortable with our new build purchase.

Long story short, if you love the place and are happy in yourself with the price, then haggle all you can, if you want a place to LIVE in for the forseeable future then any purchase will be a risk for selling on later but at least you will buy a place you'll love living in.... if you want a quick sale some time soon then it's probably not the best choice.

Pincher

Developers often offload properties to third parties,
so they can claim no discounts to appease buyers who paid the full price.

The third party has to sell them somehow, so you need to keep your eyes peeled.

decemberchrist

Quick update, I turn around to them asking for a re-negotiation of around 10% off our original offer price. "Ridiculous" is what they responded.

I'll just wait and see, and be ready to walk away.

Can I also ask what kind of charges can they take from us if the sale doesn't proceed? We've paid £1000 reservation fee. According to them, we will be charged the admin cost, seller's legal fee to the extent the legal procedure has gone through and a charge for the 2.5 week reservation period. Is this general practice when buying newbuild?

danielley

My friend bought a new build house last year. She completed about November but secured the house in June (ish)

I can’t remember exactly but she negotiated a deal which was either £30k or £40k off the list price. She said to them that she loved the house, but this was all she could afford (which was true)

She works for a different house builder and she knew that like all house builders, they would be desperate to shift stock, what with the economy etc, and if their margins couldn't handle it, they would say no.

My partner and I have been looking this weekend at houses on the same estate (they are still building as well as still having some empty) We enquired about a particular house, but it turns out that it is already sold, however the sales lady, knowing our budget suggested we consider another one almost £30k more expensive, as she said ' just see what you can get a mortgage for and we can discuss the difference and see if we cant sort something out...' What she doesn't know is that we were already going to ask for discount off the cheaper house

Perhaps last Summer was a slightly better time to be a buyer, as house builders were probably panicking a bit more, but I am sure that if you can hold out, there are deals to be done.

Good luck, I hope you find something that you are happy with.