Buying a newbuild

bigfreddiel

nearlynew wrote: »

Ignoring the fact that prices are falling....


The "contracts" that you "exchange" contain the terms of the sale.

You and the seller can put whatever terms you like in there.

Well I just sold my house so if I waited till next year and soldI would get less as well -as it is I can get bit of interest on the cash till completion, when ever that is.

Maybe I should have a clause in the contract so the price of the house is based on the house price index difference between the date I exhange and complete.

cheers

fj

Ian_W

bigfreddiel wrote: »

Maybe I should have a clause in the contract so the price of the house is based on the house price index difference between the date I exhange and complete.

I'd be very interested (and a little more than a tad surprised) if your builder will agree to this.
Obviously if he won't you can walk away but equally the builder can keep marketing it until he finds someone willing to pay the asking price, or reduce it once it's built if prices have dropped.

Kyrae

I'd be very surprised if your builder agreed to that clause too. The reason people are saying it's risky is because the value of your house might drop by the time you complete next march, and you might find yourself paying more than the house is worth. This is a huge problem for anyone getting a mortgage as they may suddenly find their mortgage offer is dropped and they're legally bound to buy a house they can no longer afford. As you're a cash buyer, you're not going to have this problem, so it's a lot less risky. It'd be no different than you buying the house and moving in now and the house value dropping by march. Who knows what house prices are going to do anyway. So I wouldn't worry too much, as long as you're happy with the price at the moment that's what matters

It is possible to get clauses written into the contract with the builders, we bought off plan and got a clause added to say that if our mortgage offer fell through and we could not get another that we could afford, then we could drop out without penalty and our 10% deposit would be returned. I doubt the builders would agree to your suggestion but no harm in trying, or you might be able to get a clause in perhaps saying that if the house isn't completed by the end of March 2011 then you can walk away with your deposit.

Good luck!

missile

I have bought two new builds. The deal depends on the developer. In my case I paid a deposit, 3% which I negotiated to 1 1/2% and secured the price @ £X and balance on completion.

Developer is unlikely to agree to a clause on completion date, but no harm in asking I guess.

bigjl

I would, with hindsight, buy a house in need of a bit of modernisation, with a preference of space at the side to extend as needed, I would get it for as little as possible, taking advantage of the current house price situation, and above all, if I was a cash buyer I would come in low and hard, as you are most buyers holy grail, chain free and ready to rock, you can pull out at any time before completion, though I don't know what sort of penalty clause ther might be, but when I sold a flat about 8 years ago the first buyer pulled out 1 day before completion and I got nothing back, just a bill from the solicitor of around £800.

Don't forget property auctions, you are a cash buyer, take full advantage of your very strong position, don't fall for the incentives, you are paying for them, and don't fall into the shiny house syndrome, especially when you realise how fragile some of these new builds can be, I would rather have old fashioned bricks and mortar, rather than stud walls and a timber frame under the outer skin of bricks.