Buying a new build

Emitch21

Hi,
I am looking to purchase a new build home using the builders part exchange scheme. As this is the first time I have dealt with house builder, I am looking or advice on how to
minimise the amount of money I have to pay. Can I askthem to reduce their asking price? Help payy deposit etc.
Many thanks

jonomassey

Hi, We are in the process of purchasing a new build and part exchanging our house. They gave us a really good price for our house and also gave us a 5% deposit, as well as carpets, £500 towards legal fees etc. The new build has since been valued at £13k below their asking price so they have taken the legal fees and carpets from us with no room for discussion. As the house is in a area we really want to move to and has taken the stress out of trying to sell our house after it being on the market for a while we decided to still go ahead with the purchase.

So they are quite flexible as long as they get the full asking price but are willing to pull out of a deal if they don't see them making enough profit from the sale.

Emitch21

So the house you are buying has been valued at 13k
less than he price your paying? Has that affected your mortgage? Are your mortgage provider ok with the fct that the builder are helping you with your deposit? I heard that may be the case with some lenders.

jonomassey

The mortgage lender is the abbey who accept the builders deposit and yes the mortgage offer was reduced to 80% of the new price. We are now paying the new price of £150k not the £163k it was being sold at. So Overall we are saving around £60 a month on the mortgage from the reduced price and mortgage. The developer would normally have to drop the price of its new house for the valuation otherwise we would have walked away. They have now made the house next door to ours the house of the week and reduced it to £150k as well.

Emitch21

Thanks so much for your help. I have spoken to Scottish bs and they said that they lend 90% and don't take into account the builders deposit. Also that it would be 90%of the valuation price. Could you tell me roughly how much the valuation costs where to you? You have been very helpful. Thankyou.

jonomassey

We paid for a valuation for the house we are part exchanging which was £300 and they had it valued by 3 different estate agents plus a homebuyer report on the property. They then came back with a offer for the house and a list of things we needed to do to the house which for ours were roof repairs and blocking up of a opening into next doors property in the attic as it didn't meet health and safety regulations. They also wanted up to date certificates for the gas central heating etc to show that its in good working order.

The only other costs we have had to pay is a reservation fee of £500 and solicitors fees on the house we are selling which were around £300 and then solicitors fees for the new property plus stamp duty etc.

Other costs to consider are for any extras you require from the standard build. We wanted a fitted wardrobe in the master bedroom plus a few electrical changes and you need to pay for these seperate and they can't be added to the mortgage.

Let me know if you need anymore info